Sunday, November 18, 2018

The Money Curse

You know, it didn't seem like we spent a lot of money in Argentina, but apparently I was the only thing keeping their economy going. In the picture, the blue arrow points to my departure date. Since leaving the exchange rate has gone from ~20 pesos to the US dollar, to at-time-of-writing 39, largely due to devaluation of their currency (rather than the dollar increasing in value). In retrospect, we did inject a lot of money into the local economy in the form of empanada and medialuna purchases...

This is actually just part of a long chain of me getting "screwed over" when it comes to money in this job. (I use "screwed over" loosely, because realistically I am paid exceedingly well.) When I went to India, the hardship differential pay decreased from 20% to 15% about 3 months before I arrived. It increased back to 20% the week I left. No worries, I was arriving in Buenos Aires with a hefty 42% Cost of Living Adjustment (COLA)... which dropped to 30% the week I arrived. Prices went up steadily for 2 years, with a incomparably small change in exchange rate... just waiting for me to leave, and now BOOM! All my old coworkers are living the exchange high-life. 

Comically, when I started writing this Post, I was going to include coming to Iceland... where (despite being one of the most expensive places in the world) the COLA is a ridiculously low (35% when I arrived, just barely more than Argentina!) Since we arrived, it's actually decreased three times and is now down to 20%... however, that's because (finally) the exchange rate is helping us out! When I bid on Iceland, the exchange rate was 108 ISK per 1 USD. When we arrived it was down to 103. However, in the last month the krona has tanked, leaving us with a current 124 ISK per 1 USD. That's an effective 20% increase in our spending power since arriving, hard to argue with that! Maybe the curse is broken! 

Sunday, November 11, 2018

Buying Cars for Iceland; Lessons Learned

Iceland is full of ridiculous cars like this.
When we joined the foreign service and were assigned to India, we knew we couldn't bring our cars (since India drives on the left). The Department will store one car, if it's not allowed in the country you're assigned, but it seemed silly to us to store a car for who-knows-how-long, so we just sold both of our cars. In India, we bought a 'temporary' car, which we sold when we left. In Buenos Aires we didn't need a car, in fact many of those who had cars rarely used them. Which leads us to...

Reykjavik is definitely a 'car city.' The public transit exists, but is fairly expensive ($4/trip) and not horribly frequent. Cars are expensive (high import taxes and sales taxes) in Iceland, and the Department will ship one car for free, so we planned to purchase a car on home leave. The former CLO in Reykjavik also suggested we buy our second car in the States and ship it personally. He estimated $3000 for shipping. We took his advice, however here is a list of the mistakes we made.

1) Title delay: We purchased our cars from Hertz. This isn't a mistake in itself, we've purchased from them before and they sell good cars. HOWEVER, Hertz takes several weeks to provide you with the title. Which delayed the pick up and then drop off of the vehicles.

2) Sales tax: The folks at Hertz are not very knowledgeable about car sales (at least at the location we purchased from). When you purchase a car to ship out of the state, you are not required to pay State sales tax and you are not required to register the vehicle. However, despite us telling them we were buying the cars to immediately ship overseas, the Hertz folks were unaware of this and we ended up paying for Registration and sales tax. ~$3500 wasted total.

3) Shipping costs: The CLO (unofficially) suggested that it would cost around $3000 to ship a vehicle to Iceland. After we purchased the car, we got quotes... for $6000 and $5300. We went with the latter, but including the port fees in Reykjavik, ended up paying just over $6000.

4) Tax free Iceland: Unfortunately, nowhere in the Post information does it mention that we have tax-exemption on large purchases in Iceland. After arriving, we learned that we could have purchased a new car tax free upon arrival.

The delay on the title wasn't the end of the world, since we were able to rent/borrow a car from motor pool until our car arrived. The other three were 'just money,' but in the end... we personally shipped a 2 year old Toyota Yaris... all told to buy and ship it, we ended up (over) paying about $16,000. Had we known then what we know now... we could have arrived at Post and purchased a similar new car for $14 or $15,000. Bummer.