1998 vehicles valuable again
Mexican citizens no longer allowed to import cars more or less than 10 years old
June 3, 2008 - 3:23PM
Ryan Holeywell
The Monitor
McALLEN - The value of wine might appreciate with age, but the same isn't usually true for cars.

Thanks to the Mexican government, though, 1998 model-year cars have suddenly increased in value due to new rules forbidding the import of cars from any other model year.

But those same rules allowing the import of only 10-year-old used cars have caused drastic changes in the economics of the South Texas auto trade, hurting the pocketbooks of some local business owners.

Earlier this year, Mexico declared that only cars from 1998 - no older, no newer - could be imported to the country.

The move was a result of pressure from Mexico's new-car dealers, who say sales of used cars from the United States cut into their own sales, The Associated Press reported recently. Also of concern is the environmental impact older, more polluting jalopies have on the Mexico's air quality.

With only one month's advance notice of the change, the move initially caught some auto dealers here off guard.

But now, the law has made the value of old vehicles suddenly appreciate. Case in point: the 1998 Ford Explorer.

Zeke Martinez, president of the McAllen Auto Auction, said before this year, the SUV would have sold for $2,800. Since the change, he estimates its value has increased by as much as 25 percent.

Although 1998 cars have appreciated, the value of other model-year cars has declined, as they can no longer be imported to Mexico.

Elena Garcia, who runs Walester Auto Sales in Hidalgo with husband Armando, said her business used to focus on export sales but was hurt by the change. Suddenly, the Garcias' pre-1998 cars became essentially worthless.

Garcia recalled shoppers from Mexico looking at 1996 and 1997 model-year cars earlier this year before suddenly saying, "Oh, we cannot buy that car."

And because large retailers here get into bidding wars over 1998 cars at local auto auctions, her business can't afford to acquire them.

Now the Garcias are purchasing 1999 vehicles, which have not yet seen the same bump as the 1998s, in anticipation of the date later this year when they will become the only vehicles that can be imported to Mexico.

Martinez said he used to sell primarily to dealers who intended to bring cars back to Mexico. Since the change, his business has declined about 30 percent, and he has had to refocus his efforts on the domestic market.

He also complained of the high taxes - as much as 50 percent of the cost of a 1998 vehicle - for importing cars into Mexico. He said that has caused a slowdown in business as well.

Miriam Medel, a spokeswoman for the Mexican Consulate in McAllen, said owners of 1998 cars with U.S. plates would need to first go through the process of nationalizing their cars in Mexico before selling them there. That can be done through the country's customs and taxing office, the Secretaria de Hacienda

Consumers fortunate enough to own 1998 vehicles will still benefit from the new importation rules if they sell domestically, Martinez said.

"They'll get more for a '98 (now) than they'd be getting a while back," he said.





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