panama usa europe real estate

My new (used) 1999 Mitsubishi Montero!

Buying a Used Car in Panama: My Story

The Backstory

I came to Panama in August of 2011.  The bus system here is fantastic and affordable, and rarely did I have issues getting where I needed to go in a reasonable amount of time. Traveling by bus is so easy, even my cousins (without a lick of Spanish) were able to travel the Pacific Coast and even go up into the mountains.  The hit on the wallet is negligible as well:  $2.50 buys passage from Coronado to Panama City – a deal I take quite often. For an entire year, I managed to get around with no car.

As my second year in Panama rolled around and as my responsibilities with Inside Panama grew with the company, I realized that the bus system would not be able to handle the all-day traveling I needed to do.  As our photographer, I spend much of my day traveling into different real estate developments along the coast, and getting into and out of those by bus is time-consuming and often frustrating.  So, I spread out my feelers and started looking for a car.

The Search

From what I could tell, there were three places I was going to find a used car: online, at used car dealerships, and by word of mouth.

First, I spent several weeks prowling the internet, getting a feel for the prices and keeping an eye out for deals.  Sites like Craigslist, Encuentra24, and PlayaCommunity are all great places to find classifieds, and I must have looked through hundreds of ads.

Working with a small budget, I was surprised to see how expensive used cars in Panama can be.  The car I ended up purchasing, for example, had a Kelly’s Blue Book value of $3,300 but in Panama runs at least $6,000.  Nicer cars like the Honda CR-V will rarely be found below $12,000.  While I blanched at these prices at first – sticker shock is always rough – I came back with a renewed determination to find a car at MY price. MY price, just to be clear, was likely much lower than YOUR price.

The second place I went to was the used car dealerships.  Robert and Steve here on the Pacific coast run a used car dealership called Gold Coast Rentals, and they were a fantastic source of information.  Their clientele, though, was more those buying new condos and homes rather than those working as photographers in a third world country.

Through a Facebook group for expats here in Panama I was put in touch with several people who would travel with me to dealerships in the city, translating and bringing in mechanics to check the cars.  I was close to making a weekend trip to Panama City with one of these people when a deal appeared just down the road.  The third method of searching, word of mouth, brought me there.

One of the best times to secure a deal is before someone leaves the country for good.  Like with mini fridges in college towns at the beginning of summer, prices on everything from furniture to cars drop well below market value when someone is trying to make a bit of money before they leave.  Several friends all called or e-mailed me on the same day, letting me know that such a couple was planning on leaving any day, and wanted to unload their car to make some cash before they left.  I quickly met with them, and we negotiated the price until I had it within my budget.  After talking to the mechanic who had worked on the car often, after having it checked out, and after taking it for a test drive myself with a car-knowledgeable friend, I was satisfied that everything was in order.

While nothing is ever sure in Panama, buying a car FSBO (for sale by owner) is the least certain method of them all.  You can brings in mechanics and test drive the car, but even above the due diligence, what you need in FSBO transactions is trust.  I had great character referrals for the sellers, and they were helpful and communicative with any questions that I had.  If you ever feel that something is off, it’s best to just walk away.  Fortunately, the deal that fell into my lap also seemed to be a solid one.

The Transaction

After we agreed on the terms, I had to wire them the money.  They used a small, Canadian bank, and I had to send the money from Bank of America.  Warning: make SURE that you have every single piece of account information possible for such transactions.  If even one part is wrong and the money comes back, you still lose quite a bit through the currency conversions and transaction fees.  I learned this the hard way.  Still, three days later I had paid in full for my new car.

The next step was to register the car in my name.  Getting through the bureaucracy in Panama is more than a hassle, and if your Spanish is not up to snuff I highly recommend paying someone to do everything for you.  I used Tyrone, whose information and prices I have listed at the end of the article, and couldn’t be happier with the service he provided.  I provided him with the transfer of ownership papers, the title, a revisado (inspection papers), and copies of the seller’s passport and mine.  He took them all into the city, went through the notary process, and came back with a new title in my name!

Finally, I needed to insure my car.  Unless the seller adds you to their insurance, you are required by law to purchase new insurance upon title transfer.  The Panama government mandates that every car owner purchase insurance to cover physical damage caused by running into a person on the street.  Any insurance you buy after that is up to you.

My car is over ten years old, and thus expensive to insure in certain areas.  But for just over $300 for the year I was able to attain the government-mandated insurance and more-than-ample coverage for medical and legal fees, theft, fire and falling objects.  I was also guaranteed roadside towing and gas supply, to a certain extent, for the year.

I worked through Julio of J2L Associates, and again was very happy with the service his company provided.  Julio has an office in Panama City, but every Thursday he sees clients in a room at the back of our office in Coronado.

So there I was, a proud new owner of an insured car that ran like a dream.

The Repair

No matter how much diligence you do, sometimes things just stop working.  That’s what happened a few weeks after I bought the car: 0 to 60 in 6 seconds turned into 0 to 60 in six weeks.  I was crawling along the highways, and needed to find a mechanic pronto.

Several people referred me to Julio, a mechanic just outside of Coronado with good equipment and a solid reputation.  I typed out and translated a list of my issues, and then checked the Spanish again to make sure that I was as clear as possible in describing my problems.  I left the car with Julio and his assistant Carlos, and they told me they would call at the end of the day to let me know what the issues were.  I said thanks, and took a taxi to the office.

Cue five o’clock, and still no word from the mechanics.  I found their number, and called to see what was going on.  He told me he had no minutes on his phone, so couldn’t call.  I was frustrated, but said fine and went to see in person what the issues were.  He walked me through several parts that I needed to repair

panama usa europe real estate

Len Melso (left) and his team at PanamAuto, in between Coronado and Gorgona

car needed, I realized that none of the fixes had anything to do with my engine – the main reason I took the car in the first place.  When I brought that up, he tacked a new set of spark plugs onto the list.

What I did not expect was this: in Panama, you are often expected to go get all of the parts yourself, or pay someone a significant amount of money to do it for you.  So, I had to travel an hour from Coronado with a list of parts in Spanish, in hopes that I could stumble my way into finding the pieces.  I actually managed to get six of the eight items on the list, and it ran me around $50 for everything.

I brought the parts to the mechanic, and he changed out everything.  It took all day, and cost me $100 for the service – I thought it was an especially steep price considering how much of the work I did for him.  He told me that the car should work, so I drove it away.

It really, really didn’t work.

Things were worse than ever, and now my car was spewing blue smoke when I stopped.  The engine felt like it was shaking, and I did not feel comfortable taking the car more than a block or two.  So I brought it back to Julio.

Who then told me he would have to do an “overhaul,” where he would take the engine apart and find the issue.  He told me this would take two weeks, and cost me near $600.  I thanked him and left to find another mechanic.  And, again, I got lucky:  Len Melso had just brought his company PanamAuto into a location just outside of Coronado.

Len and his son Justin are both from the United States and are fairly priced, very efficient mechanics.  I dragged my car to their new location, and their team happily took it off my hands.  At the end of the day they called and told me the news: the Panamanian mechanics had instructed me to buy the wrong spark plugs, and they had installed them improperly.  What’s more, they had re-secured my engine with the wrong sized bolts, leading to the shake.  As a result, what had been a patchable problem turned into a large broken piece that needed replacement.

Len sent helpers all over the interior of the country, trying to find me the piece from a third party (and thus more affordable) manufacturer.  Unfortunately he could not find it, so had to buy directly from the car’s manufacturer in Panama City the next day.  After the third day, he called and told me my car was working fine and was ready for pickup.  I was nervous as to how much he would charge me.  Remember, the Panamanian mechanics had charged me $100 just to change the spark plugs, and Len had bought and changed the plugs again, diagnosed my problem, spent two days finding a part, and ended up having to buy the most expensive version of that part.  So it was with a sinking feeling that I walked into the shop after work that day, to find my bill totaled:

$200.00 for the part

$167.00 for everything else.

That’s just over $350 for a good amount of work.  My car ran like a dream, and I thanked Len profusely.  These guys are the real deal, and they will not rip you off.

The Lessons

Since then I have taken my car all over Panama.  Last week I drove through the Azuero Peninsula, checking out the developing beach area for the company.  Currently I am sitting at our office in Boquete after driving up a few days ago.  The car has been fantastic the entire time.  You’ll be able to read about both trips in the coming weeks.

After the whole experience, I have taken away a few lessons and insights.  Some of these are obvious, but I think they’re worth stating anyways:

–       The bus system is fantastic, and many of you won’t need a car here.

–       Taxis are also very affordable (rarely more than $4 in Panama City)

–       Expect to pay more for used cars in Panama.

–       Be as diligent as possible in checking the car before you purchase.

–       Something will go wrong.

–       Something else will go wrong.

–       Len Melso is awesome.  Call him: 6045-3543

My story of buying a used car is not a unique one here in Panama, but I hope that by reading through my experience you can have a better grasp of how things work down here.  I am always available if you have any questions or comments, so please e-mail me at oliver@ipreinfo.com.

Tyrone Cyrille

Panama Concierge

507-6733-5091

507-6066-4043

tyrone2godio@hotmail.com

Airport Transfers $90 Coronado area to airport.  $110 Playa Blanca area
License Plates  $60
Transfer of Ownership $80
Written Translations $8 x page
In person translations $25 x hr
Day trips to Panama City $90
Drivers License $75 x person

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