Can I Take My Financed Car to Puerto Rico?

Summary of Key Points:

1. Check with Your Lender - Verify if transporting your financed car is allowed under the terms of your loan agreement.

2. Understand Customs and Excise Taxes - Ensure you comply with U.S. Customs and pay the necessary excise tax in Puerto Rico.

3. Prepare for the Shipping Process - Know what transportation methods are available and the documentation required.

4. Review Insurance Coverage - Confirm that your current insurance policy covers Puerto Rico or acquire additional coverage.

5. Register Your Vehicle Locally - After arrival, meet Puerto Rico’s vehicle registration and inspection requirements.

Introduction: Check with Your Lender: Is It Permissible to Ship Your Financed Car?

Before making any transportation plans, the first thing you need to do is contact your lender. When you finance a car, you technically do not own it outright until the loan is paid off, and many lenders have specific stipulations regarding the movement of financed vehicles, especially to areas outside the continental U.S. 

Although Puerto Rico is a U.S. territory, some lenders may view the relocation of a car there similarly to moving it internationally.

Customs and Import Duties: Navigating the Legalities

Even though Puerto Rico is a U.S. territory, there are still regulatory procedures in place for vehicles arriving on the island, particularly regarding excise taxes and inspections.

U.S. Customs Clearance

Cars being transported to Puerto Rico must clear U.S. Customs. The process is generally smoother than international shipping, but it's essential to have all required documentation in place. Ensure the following documents are ready:

• Vehicle Title or Registration: If your vehicle is financed, a copy of the registration or title will be needed. If the lender holds the title, coordinate with them to secure the proper paperwork.

• Bill of Lading: This is a shipping document provided by the freight company, detailing the terms of the transport.

• Identification: A valid driver's license or passport is necessary to verify the car’s owner or borrower.

Puerto Rico’s Excise Tax

Puerto Rico imposes an excise tax on all vehicles imported to the island. This tax can be a significant expense, often ranging from 3% to 6% of the vehicle’s value, depending on the car's age, make, model, and other factors. Here's how to prepare:

• Calculate Your Excise Tax: Use Puerto Rico’s online tax calculators, available on the Puerto Rico Department of Treasury’s website, to estimate the excise tax. This will give you an idea of the additional costs involved in bringing your car to the island.

• Pay the Tax Upon Arrival: Once your vehicle arrives in Puerto Rico, you must pay the excise tax before it can be released from customs. This is typically done at the port or online.

Shipping Your Vehicle: How to Get Your Car to Puerto Rico Safely

Transporting a vehicle to Puerto Rico involves shipping it over water, typically via ocean freight. Depending on your vehicle’s condition and your budget, you can choose between two main methods.

Roll-on/Roll-off (RoRo) Shipping

• What It Is: In this method, cars are driven onto a specialized ship and securely parked on deck or in cargo holds. Once the ship reaches Puerto Rico, the cars are driven off.

• Advantages: RoRo shipping is often more affordable than container shipping because it doesn’t require individual containers for each vehicle.

• Limitations: Your car will be exposed to the elements during transport, and personal belongings inside the car are typically not allowed.

Container Shipping

• What It Is: Your vehicle is placed inside a container, which is then loaded onto a cargo ship. This method is often preferred for high-value cars or vehicles containing personal belongings.

• Advantages: Container shipping offers greater protection from the elements and potential damage. It also provides the option to ship personal items alongside your vehicle.

• Limitations: This method is generally more expensive than RoRo shipping due to the cost of containers.

Required Documents for Shipping

• Proof of Ownership: If your car is financed, the lender must provide proof of ownership or consent.

• Vehicle Insurance: Ensure your vehicle insurance policy is valid for Puerto Rico. Some shipping companies may also require proof of marine insurance.

Insurance Coverage: Make Sure You’re Covered

Insurance is a crucial consideration when transporting your car to Puerto Rico. While Puerto Rico is a U.S. territory, not all insurance companies automatically extend coverage to vehicles shipped there.

Review Your Current Auto Insurance

• Check for Coverage Gaps: Speak to your insurance agent to determine whether your policy covers the vehicle while it is being shipped and after it arrives in Puerto Rico. Some policies might require an addendum to provide coverage in territories outside the continental U.S.

• Comprehensive and Collision Insurance: These may be required during shipping to cover potential damage to the vehicle while in transit.

Purchasing Local Insurance

Puerto Rico has its own vehicle insurance regulations. If your current policy does not cover Puerto Rico, or if it only provides limited coverage, you will need to purchase a local auto insurance policy. Local insurance is required to register and drive your car on the island.

Registering Your Car in Puerto Rico: Compliance After Arrival

Once your car arrives in Puerto Rico, it must be registered locally before it can be legally driven on the roads. Puerto Rico’s registration process involves several steps to ensure that your vehicle meets safety and emissions standards.

Steps to Register Your Vehicle

• Vehicle Inspection: Puerto Rico requires all imported vehicles to undergo an inspection. The inspection ensures the vehicle meets the island's safety and emissions standards.

• Documentation: You will need the following documents for registration:

• Proof of excise tax payment

• Bill of lading from the shipping company

• Your vehicle's title or registration

• Proof of insurance (from either your U.S. insurer or a local provider)

• Registration Timeline: You typically have 30 days after your vehicle’s arrival to complete the registration process. Delaying this could result in fines or additional fees.

Local License Plates

Once registered, your vehicle will be issued Puerto Rican license plates. This is mandatory even if your car is still under a financing agreement with a mainland lender.

Conclusion: Can You Bring Your Financed Car to Puerto Rico?

The short answer is yes, you can bring your financed car to Puerto Rico. However, the process involves coordination with your lender, dealing with customs and excise taxes, ensuring proper insurance, and registering the vehicle locally. Each of these steps must be followed closely to ensure that you comply with both U.S. and Puerto Rican regulations.

If you're ready to ship your car to Puerto Rico, reach out to AmeriFreight for a reliable, stress-free shipping experience. Whether you're shipping a financed car or any other vehicle, get an instant quote today through AmeriFreight’s car shipping calculator here and enjoy peace of mind knowing your car will be handled by the best in the business.

FAQs

1. Can I ship personal items inside my financed car when transporting it to Puerto Rico?

• Most shipping companies, especially those offering roll-on/roll-off services, do not allow personal items to be placed inside the car during transport. Container shipping may allow it, but check with your shipping company for their specific policies.

2. Will my auto loan terms change if I ship my car to Puerto Rico?

• Generally, your loan terms will remain the same, but your lender must be informed and give consent. Failing to do so could result in violations of your loan agreement.

3. How long does it take to ship a car to Puerto Rico?

• The time frame varies depending on the shipping method. On average, it can take 1-3 weeks from the U.S. mainland to Puerto Rico.

4. Can I drive my car in Puerto Rico with my state-issued registration and plates?

• No. Once your vehicle arrives in Puerto Rico, you are required to register it locally and obtain Puerto Rican license plates. You’ll need to complete this process within 30 days of arrival.