YOU ASKED, WE ANSWERED: Can I buy a vehicle in Nicaragua if I am not a resident?

The law in Nicaragua says you can’t register a vehicle if you’re not a resident. But guess what? You can in fact own a vehicle in Nicaragua if you don’t have residency. Confused yet?

When buying a used vehicle in Nicaragua a lawyer will draw up a sales document called a “carta de venta” or “escritura“. This is a legal document that transfers ownership of the vehicle from the seller to the buyer. It does not matter if either party is a Nicaraguan citizen, resident or foreigner. This same document is also used for property and home sales in Nicaragua.

What if I want to buy a new vehicle in Nicaragua?

Brand new vehicles can only be registered to a Nicaraguan national or resident. If you are neither – and want to buy a new vehicle – you will need a friend or lawyer that has residency to “buy” the vehicle for you. Afterwards you can have a lawyer prepare an escritura in your name.

I did this when I bought a brand new motorcycle. The lawyer “bought” the motorcycle for me. And then I kept it registered in his name until I received residency.

This registration process often takes more than a day and has to be done at the police station in the capital of each department. So you can expect to pay accordingly for this service.

What are the possible risks of owning a vehicle in Nicaragua that is registered in someone else’s name?

Nicaraguan law states that all vehicles must be registered in the new owner’s name within 60 days of it being sold.

If you are driving a vehicle in the name of the previous owner — with their insurance — it looks like you are driving a friend’s vehicle.

If you get a friend or lawyer to register the vehicle in their name — and have them get insurance in their name — it also looks like you are driving a friend’s vehicle.

But if you are driving a vehicle that is still registered in the previous owner’s name — with insurance in your name — a police officer could ascertain that you have recently purchased this vehicle.

The law states that a vehicle can be impounded until it is registered to the actual owner. But in practice I can’t imagine what one would have to do to anger a police officer enough for them to actually go to the trouble of impounding the vehicle.

Going Legit: Buying & Registering a Vehicle as a Non-Resident

If you don’t have residency and you want to register a vehicle in your name you can go to the trouble and expense of opening a Nicaraguan corporation. Once formed that corporation can buy a vehicle and you can drive it. There are definitely people that have gone this route. It is the most legitimate way to go, but costly.

To set up a corporation you can expect to spend well over $1000 USD. You also have to pay a certified Nicaraguan accountant to file your taxes monthly and maintain this corporation. So plan to set aside another $500 USD per year to stay current.

Legit or on the Fringe: Which way should you go?

Normally we would not be so cavalier in breaking the law. Especially in a country we are guests in. Truth be known it is common for Nicaraguans to also drive on the fringe.

When a vehicle is sold in Nicaragua there is a 1% registration tax that is supposed to be paid. Often times – since each new owner wanted to avoid paying taxes – an escritura will show multiple owners with the vehicle still registered to the first owner.

Where are the best places to look for used vehicles in Nicaragua?

Encuentra24 is a great place to search for a used vehicle. Facebook Marketplace is another place to look for vehicles close to you.

If you don’t speak Spanish … and don’t know vehicles … or aren’t a great negotiator … you may want to use a car finding service. We have two we can recommend.

Walter Christiam of Expat Car Solutions lives in the capital city of Managua. It is here where you can find the highest concentration of used vehicles in the country. Richard Morales of Gaby’s Transport is also a trustworthy local who can help you find a vehicle. He is based in San Juan del Sur.

Both Richard and Walter speak English and Spanish. They also know the car market and can negotiate lower prices than most foreigners would hope to.

What about insurance?

With an escritura the buyer owns the vehicle, but it is still registered and insured in the previous owner’s name. At this point the buyer can drive the vehicle using the existing insurance; which is on the vehicle not the driver. Some people choose to buy insurance in their own name instead. As a side note if you want to renew insurance in someone else’s name just say, “No change.” , when you are at the insurance broker’s office.

Basic mandatory vehicle insurance costs $55 USD per year. While motorcycle insurance costs $35 USD per year. Full coverage insurance is only available for vehicles less than 10 years old.

Bottom Line

The initial expense of buying a reliable vehicle can be quite significant. If you want something fairly new your bank account is going to take a hit. On the other hand if you prefer to save some cash by buying an older cheaper vehicle you’ll have the inconvenience and expense of regular trips to the mechanic.

The good news is used vehicles hold their value here. We bought our 2006 Toyota Landcruiser Prado 4×4 in 2017. At that time it had 160 000 km on it. Sale price was $12 500 USD.

If you’re comfortable on two-wheels a motorcycle is a great happy medium.

With some form of personal transportation you can be more flexible with where you choose to live. Grocery shopping and running errands will also be easier. And best of all you’ll be able to explore the country – both near and far – more leisurely.

There are many pros and cons to vehicle ownership in Nicaragua. For us the pros out weighed the cons and we ended up buying a vehicle 2 months after we arrived in country. We drove that vehicle for nearly 6 years before we sold it.

The entire time we owned the vehicle it was in the original owner’s name with the insurance in our name. We had an at fault accident and our insurance company paid the claim to both vehicles that were damaged.

In the end deciding if and how to buy a vehicle in Nicaragua comes down to your comfort level. Literally thousands of expats — who are not residents — have bought vehicles here. There are likely some negative stories out there; but they are the exception.