There’s more than one advantage to buying a boat in Mexico from avoiding U.S. sales tax to getting a boat that is cruiser equipped. In a conversation with Don Brame and Denny Grover at San Carlos Yacht Sales in San Carlos, Mexico, in the Sea of Cortez, the two yacht brokers explain the ins and outs of buying a boat in Mexico, in particular the Sea of Cortez. (Since this conversation, Denny has retired and has been spotted working on his trimaran in San Carlos.)
DK: Tell me about buying a boat in Mexico.
Don: We represent the owner of the boat here, but we do all the paperwork in the United States, so it’s really being sold in the United States, but since the first time the boat is used is out of the country, it qualifies for no sales tax.
Denny: It’s considered an offshore purchase but it’s not considered a purchase in Mexico, so [they wouldn’t pay sales tax] unless they brought the boat back to the state of origin before the time period….there are time periods—in California it’s 90 days now or 180 days if it’s just stored.
DK: What are the reasons a person would want to buy a boat here vs. buying a boat in the United States?
Don: You don’t have to go down the outside. [Don means sailing down the west coast from Canada or the United States to get to the Sea of Cortez.] You’re already in the best cruising grounds.
Denny: Boats are generally cruiser equipped. They avoid sales tax. They’re already in some of the finest cruising grounds in the world. Repairs and maintenance, particularly labor type, are cheaper, plus they get to deal with us.
DK: What about the price of boats? How do they compare with the States?
Don: We use the United States as a price comparison to sell the boat, so it’s just about the same.
DK: Do you think a lot of people come down here thinking they’re going to get a really good deal and they’re surprised that it’s not cheaper?
Denny: You’re looking…like in California it’s, what is it, it’s 12% that you’re going to pay in sales tax on the purchase of the boat, so it’s 12% cheaper right there. A boat in Mission Bay probably isn’t going to be as well equipped as a boat that’s down here. You’re getting a cruising boat—an equipped boat vs. a non-equipped boat. Plus you’re avoiding the…
Don: …the outside of the Baja. A lot of people just get paranoid with that, first time sailors.
DK: If somebody bought a boat here that needed to be fixed up, is there any disadvantage if they needed equipment?
Denny: Yes and no. You have to import materials. [You can] bring in replacement parts for a boat, but you also have to take out what you’re putting in to be duty exempt. If you want to repower the boat, the old engine has to leave the country and the new engine comes in. You have to document that. They question some things. You have receipts. Pay your duty.
Don: The convenience for parts is limited.
Denny: We’re getting better. There are some things that are better here than in the States. Labor is definitely cheaper and some of it is quite good. The bottom paints here are better. By better, I’ll say they’re more effective. To do a bottom job here, they’re not tenting the boat.
Don: We don’t have to collect all the water, any of the dust and all the other stuff. In California now it’s all got to be collected and processed.
DK: How often do you have someone sail down from the U.S. and they decide they hate cruising and want to sell their boat?
Don: Too often.
Denny: It generally is not I hate cruising. There’s a change in situation, like an illness, one member gets sick.
Don: Parents get sick, kid problems, finance problems. Someone nicknamed the dry storage…
Denny: …the field of broken dreams. There’re a lot of times that the reality of cruising runs in real hard with the fantasy of cruising.
Don: It’s not that easy out there. Even though we’ve got water makers, gps’s now and stuff, you’ve still got rolly anchorages. You’ve still got night watches.
Denny: It’s like when the Baja [Baja Ha-Ha] comes down, they say that there isn’t a mechanic or boat worker that’s available in La Paz for at least a month because every morning there’s somebody wanting someone to change the oil in their engine, because they’ve never done that. There are a lot of people that are just unprepared for the things that they have to do and God forbid if their head plugs up.
DK: For a buyer to get to San Carlos the airfare is very expensive. What are there other options?
Don: You can drive down. It’s a nice easy drive, nothing to it.
Denny: You can fly into Tucson or Phoenix and take Tufesa. [Tufesa is a clean, comfortable Mexican bus line.]
DK: If somebody flies into Tucson and they want to drive down, can they rent a car in the United States that will allow them drive across the border.
Denny: Yes, and they can plan on getting tattooed on the insurance. The car companies that write insurance for the cars coming to Mexico is about three times as expensive as the insurance should be.
DK: What about the safety issue? A lot of people are afraid to come to Mexico because of the violence they hear about in the news with the drug cartels.
Denny: I ran a reservation service for the town 20-some years ago. Everybody then was scared to come to Mexico because of the language, the police, the judicial system. People are still scared to come to Mexico because of the language, the police, and the drug violence and the judicial system. It’s pretty much the same. The only thing is that the drug violence is so sensationalized because the drug people want it sensationalized because then it has a shock value to their opponents.
A friend from Jaurez told me, he said, “Your chances of being involved in it are slim to none. If you’re not involved in the drug trade, don’t use drugs, don’t go to places where they’re selling and distributing drugs, then your chances of being involved are very slim.” It’s not as dangerous down here as people think. I’m more comfortable here than in most U.S. cities after dark.”
San Carlos Yachts is part of a larger corporation called Mazmarine. They have four offices: Puerto Vallarta, La Paz, Mazatlan and San Carlos.
San Carlos Yacht Sales
San Carlos, Sonora, Mexico
Toll free: 1-8558-GOSAIL
Tel: 011 52 (622) 226-0037