Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

New Mexican Law Could Boost U.S. Used-Car Market

August 24, 2005

The Mexican government on Monday cleared the way for importation of older used American and Canadian vehicles. The move could open up a vast new market for U.S. auto merchants looking to sell older vehicles, the Los Angeles Times reports.The U.S. used-car market is glutted with second-hand cars and trucks, as values have slid in recent years because of new-car incentives. Mexico's decision could bring many new buyers across the border for some previously unwanted inventory, and raise used-car prices. Mexican buyers pay retail on used trucks and sell them in Mexico for double, said Louie Quezada, a Southern California dealer in the article. Mexico had severely restricted the importation of used vehicles. But the new order now allows large-scale importing of some cars and trucks from the United States and Canada that are 10 to 15 years old, the Times article said. It also reduces taxes on some new Mexican-made vehicles to make them more affordable, and it allows drivers of vehicles smuggled illegally into the country to register them by paying taxes equivalent to 15 percent of the car's value.Industry experts estimate that 2 million to 3 million smuggled vehicles are currently driven in Mexico and lack proper tags, registration and emissions checks. Opening the Mexico market will benefit merchants and consumers there and in the United States, said Timothy Van Dam, general manager of California Auto Dealers Exchange in Anaheim, the largest dealer auction on the West Coast. A nation of Mexican buyers, he said, would give new life to the used-car market by buying so-called junk cars that would Van Dam would have to pay to have hauled away. Car dealer Quezada, who has sold used cars in Los Angeles and Orange counties for 35 years, said older pickup trucks are so hot among his Spanish-speaking customers that "they're hard to find around here."
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