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.

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