Tuesday 28 September 2021

Marchamo, Cash or Zero Interest Financing, What Is The Best?

Paying the bills


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Paying the bills


For some the 2019 Marchamo is a small amount, less than ¢100,000 colones, whiel for others it top ¢500,000, ¢1,000,000 or a lot more. Yes, the amount is relative, yet the decision to finance or use cash can be the same.

The Marchamo is due by every December 31 for vehicles to circulate in the coming year

Every year, by not later than December 31, the owners of vehicles in Costa Rica need to pay the Marchamo – the annual circulation permit for the coming year.

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Failure to do so, owners are exposed to a ¢52,000 colones fine and/or seizure of the license plate and/or the vehicle itself, which then incurs even larger sums to recover it from the clutches of the Cosevi, the national roads safety council – through the work of the Polica de Transito (Traffic Police).

What makes the amount of the Marchamo expensive, ‘a millionaire sum’ for some, is the property tax on vehicles which represents 70% of the total cost. The tax is based on a percentage of the ‘fiscal value’ determined by the Ministerio de Hacienda (Ministry of Finance), that takes in the model, make and year of the vehicle and depreciation.

What is better, financed or cash?

For many, it has to do how well they hand money and if they have the cash on hand, it may the best to pay it in cash, this because they don’t have to worry about this anymore, not until next November.

On the other hand, there is the option to pay with “zero interest rate”. For those who can handle money well, the option can serve to not run out of caah for the year-end and the outlays in January to get the children back to school.

A third option is to finance it (with interest charges) by way of an affiliatation with a solidarity association (union), with interest rates below market. This option allows one to invest the cash at rates higher than the interest paid.

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For those who don’t have the money, financing by means of a personal loan, is the only option. Interest rates and terms on the loan are based on personal financial history. The monthly payment has to take into account the personal or family budget.

What is the answer?

Cash. If you have the money and used to paying it in this way, it is the best; You can forget about the Marchamo until next year.

Zero Interest. Imaging yourself facing a ¢1 million plus Marchamo. If you are in this position it means you have a luxury vehicle and with that a above average monthly income. If that is the case and you can manage your money well, this may be your better option.

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Financing. Of course, you don’t have the money, financing (with interest) is your only option. Not paying the Marchamo on time, waiting for things to improve financially, waiting on a big lump sum coming in, will add interest and late charges by the Cosevi which can and most likely will be much, much higher than the financing cost offered by the banks and financial institution. And if and when you get that money coming in, just pay off your debt.

What’s included the overall cost the Marchamo?

To know the amount you have to pay for the 2019 Marchamo, you can consult:

  • Free by calling 800-MARCHAMO (800-6272-4266)
  • Online at www.ins-cr.com
  • Text message (from a Costa Rica phone) to 1467 with the word marchamo, followed by the plate number

example using the text message option



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Paying the bills
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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