Red-Tape Roadblock

— Though new-car prices are lower in Mexico, there are some disincentives for Americans looking in that direction. Finance rates at Mexican dealerships start in the high teens. And a car purchased in Mexico isn't necessarily identical to the same make and model sold at a San Diego dealership. "Sometimes," Romano says, "the safety features and the emissions levels are not up to United States standards. And [according to the new regulations] the car has to meet federal and state standards of the country it will be used in."

Though there will be no importation fee, a Mexican buying in San Diego will not be exempt from paying new-car taxes in Mexico once he imports the car. He will pay a 15 percent tax on the sales price, plus another 5 percent for buying a new car. Similarly, a San Diegan who buys in Tijuana will have to pay the same federal, state, and local taxes he'd pay at a San Diego dealership when he returns. "There are a lot of regulations that we are still trying to find out," Carrillo says, "but one thing I know is there was supposed to be a module set up on the border to inspect all the new units that are going to be crossing the border."

Though nobody knows how, if at all, the new regulations will change the new car markets north or south of the border, there is some anxiety among Mexican dealers. "The whole brand-new car industry here," Romano says, "we actually are predicting that sales will be a little bit down for the first quarter of the year because a lot of people are speculating with this. They think it might be a little easier [to buy across the border]. They think they are going to save some money on it. But the bottom line is, it won't be easier, and they won't really save any money."

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