Can I Drive a Financed Vehicle Into Mexico?

Before you go, learn what is required to drive a financed vehicle into Mexico.

Traveling to Mexico by car is a wonderful adventure, one millions of U.S. and Canadian citizens explore each year. However, as fun as this journey will be there is some work to prepare, like getting a Temporary Vehicle Importation Permit or applying for your Forma Migratoria Multiple.

While some required forms and steps are obvious, one is frequently overlooked. If your vehicle is financed, there are extra steps you must consider before you can legally and safely drive across the border. Here’s a detailed guide to help you prepare for your journey.

What does your finance agreement say?

Before you pack your bags and set your GPS for Mexico, it’s crucial to check whether your vehicle’s finance or lease agreement permits international travel. Because your lender holds a financial interest in the vehicle, they have a legal right to restrict its use outside the country. As a result, most leased or financed vehicles are subject to an agreement that includes terms and conditions regarding where you can, and maybe can’t, take the vehicle.

You’ll Need a Letter of Permission

To legally drive a leased or financed vehicle in Mexico, you’ll be required to obtain a letter of permission from your lessor or lender. A letter of permission will be your proof that the lessor or lender allows you to take your vehicle into Mexico. Before you can secure a letter of permission, the lessor or lender will typically require that you first secure adequate Mexican insurance. Your insurance will need to demonstrate that it’s compliant and covers its use in Mexico.

Is a letter of permission required in the “Hassle Free Zone”?

Mexico’s Hassle Free Zone, also known as the Free Zone, makes it easier for tourists to drive their vehicles near the border without the usual red tape. This zone includes:

All of Baja California Norte and Baja California Sur.
The western half of the state of Sonora.
A 20-mile strip along the U.S. border.

While you don’t need a temporary vehicle importation permit within this zone, you still must obtain a permission letter from your lender. The Free Zone only simplifies customs requirements, not the terms and conditions of your vehicle’s finance agreement.

What if I don’t get a Permission Letter

It might seem tempting to bypass getting a permission letter, especially if you’re only driving within the Hassle-Free Zone. However, failing to secure this document can breach your vehicle’s lease or finance agreement and lead to significant legal and financial problems if you’re stopped by authorities or involved in an accident.

Step-by-Step: Obtaining Your Letter of Permission

Getting a letter of permission from your lender is not difficult. Here’s how you can smoothly secure a letter of permission:

Check Your Loan Agreement: Review your vehicle’s financing contract to understand the specific insurance requirements and permissions needed for international travel.
Purchase Appropriate Insurance: Buy a Mexico tourist auto insurance, motorcycle, or RV policy that meets or exceeds the requirements stipulated by your lender. MexicoCovered.com offers this form of insurance. You can start a quote online to get proof.
Provide Proof to Your Lender: Once you have your insurance, send the policy declaration page to your lender. This page should list them as the lienholder. Typically, you can fax this document along with a simple request for a permission letter.
Follow-up: If you’re pressed for time, provide a fax number or a physical address where the lender can send the permission letter quickly. It’s advisable to begin this process well in advance of your trip to avoid any last-minute issues.

FAQs: Driving Financed Vehicles in Mexico

Q: Can I just email my insurance documents to my lender?
A: Most lenders prefer fax or mail for these documents because they consider these methods more secure than email.

Q: How long does it take to get the permission letter?
A: The timeframe can vary, but it’s best to request the letter at least a few weeks before your trip. This allows your lender adequate time to process your request.

Q: What if I switch my insurance provider while in Mexico?
A: You should notify your lender of any changes in your insurance coverage, especially if it affects compliance with your loan agreement.

The bottom line

Taking your financed vehicle to Mexico doesn’t have to be a hassle. With proper preparation and understanding of your obligations under your loan agreement, you can enjoy your Mexican road trip without any legal worries.

If you still have questions about insuring financed vehicles in Mexico or need further assistance, the experts at MexicoCovered.com are here to help. Contact us today at (877) 222-3253 for personalized assistance and to get started with your insurance needs.