How to Get a Vehicle in Panama

Introduction

There's a comprehensive article to help you through the process of how you buy or rent a vehicle in Panama.

Do you need a vehicle?

If you live in the central area, and your job is not far away from your home, a private vehicle is not essential, Uber and the metro could be enough. Most of the expats living in Panama do not have a car, by the way, many Panamanians own a car. Driving in Panama can be not fun, you can often get stuck in traffic for a long time. Owning a car in Panama is generally not expensive.

Buy a car in Panama

Budget

Regardless if you are paying cash or thinking about financing, it is important to determine how much you can afford before you find the right car. Think of other costs like insurance, and registration fees.

Research

Research the type of car you want based on your budget. Websites like Encuentra24 and MercadoLibre are popular platforms in Panama for browsing both new and used vehicles.

Dealership or private sale?

Look for reputable dealerships in Panama City with a history of good customer service and transparent dealings could be the safest option to buy a car, as well as, a private deal could let you find cheap deals. Ask friends, family, or colleagues for recommendations, and maybe some of them are selling their cars.

Here is a list of the biggest dealerships in the city:

Inspect the Vehicle and make a Test Drive

When buying a second hand-car, always investigate it. You should think about hiring a reliable mechanic who would do a pre-purchase inspection to reveal any possible problems. It costs about $150, but it can raise the chances that future mechanical problems will be avoided. Test drive the car to evaluate its performance, comfort, and handling. Listen to uncommon sounds or vibrations and check all features and functions.

Negotiate the price

Do not hesitate to offer a counterproposal. Haggling is a standard practice in Panama, so you must be willing to haggle with the vendor to get the most favorable price. Normally the price is a few percent higher, so you can easily take it down. Study the market price of the car prior to trading to have an idea of its cost.

Paperwork and Documentation

Once you've agreed on a price, and closed the initial deal, ensure that all the necessary documentation is in order. This includes the sales contract, title transfer, any warranty documents, etc, in particular:

The Car’s Maintenance Records
Vehicle History: Review its history of accidents, maintenance and any other relevant problems. You can obtain this information through the transit history issued by the Autoridad de Tránsito y Transporte Terrestre (ATTT) de Panamá.
Warranty: In Panama by law, used cars must have a warranty of six months or 15,000 kilometers in accordance with the provisions of Article 3 of Law 14 of February 20, 2018.
“Paz y salvo” of the car: issued by the ATT.
Proof of insurance
Vehicle registration certificate from the previous owner
Technical inspection certificate from the ATT
Verify that the vehicle identification number (VIN) matches the one on the registration documents
Transfer Ownership, detailed in the next chapter.

Transfer Ownership

Prior to the payment, ensure that you carry out the transfer registration of the vehicle in your name at the ATT (Autoridad de Transporte y Transito). With the documents listed in the previous chapter, you have to follow the next step to make the transfer registration (“trapaso”):

Go to the City Hall (Municipio) to transfer for sale registration (traspaso por venta)
ATT (Autoridad de Transporte y Tránsito): Upon the fully signed trapaso, you and the seller have to go to the ATT to have the Registry of the motor vehicle in your name.

The City Hall and the ATT of Panama city are located in the same building, Municipio di Panama, Ave. Justo Arosemena y Cuba y entre calles 35 y, C. 36 Este, Panamá

The official website is https://mupa.gob.pa/

After the registration, you will receive the registration certificate, and the typical duration for this process is approximately two days. You should pay the dealer after that.

Insurance

In Panama, third-party liability insurance is mandatory, so be sure to arrange coverage before hitting the road. Ask the previous owner if the car still has a period of paid insurance, so you can wait to make a new insurance contract or a renewal.

Here is a list of the most common Insurance companies:

Mapfre
Isefuros
Segurossura
LaRegionaldeSeguros
Assa
Scotiabank
Eprezto: A website to compare car insurance in Panama

Car tax - Impuesto de circulación (Placa)

The car tax is based on the type of vehicle: motorcycle, private car, trailer, or truck, depending on the number of passengers and the gross weight of the vehicle. It is settled annually and must be paid to the city Hall (Municipio de Panamá). Some local banks through Internet banking offer the service of paying the tax directly from the web.

Rent a car in Panama

Driving License

As a foreigner, you can legally drive in Panama using your own license for the first 90 days you are in the country. After the 90 days make sure to convert your foreign Driving Licenses to comply with local laws and drive legally while in the country. To convert your own country license please read this guide, while if you are looking to get a new Panamanian driving license please consult here in this article.

Understand the Traffic Laws

Before renting a car, be familiar with the basic Panama’s traffic laws. Speed limits are generally 60-80 km/h in cities and 100 km/h on highways. Seat belts are mandatory for all passengers. Avoid using your mobile phone while driving, as it is prohibited.

Type of vehicle

If you are willing to move around the country it is advisable to rent a 4-wheel drive car, while if you would like to move downtown a regular car can be suitable.

Rental Requirements

Every driver should have a valid driver’s license.
Valid credit card (usually Visa, MasterCard) in the name of the main driver.
The minimum age is 23 years. Usually, extra charges apply for people under 30 years old.
Security Deposit is mandatory and will be charged on your credit card.
Valid passport.
Mandatory liability insurance, issued by rental companies at extra cost.
Driving Restrictions: Driving is allowed only in Panama.

Cost

The cost will depend on the period of the year and obviously the type of car. Typically you pay from $15 to $40 per day for a city car while around $60 per day for 4x4 SUV. Panama car rental companies will require you to pay a deposit on your credit card of around $500 or $1000 to rent a car.

Don't be excited by online quotes!! Please note that the only mandatory insurance in Panama for renting is the liability insurance. The online quotes often do not include this mandatory insurance, so the effective cost can be higher. At the same time, some rental companies will also try to sell you extra insurance plans at the check-in.
Inspect the Vehicle before leaving the rental company to not incur extra costs for previous damage. Check the car's functionality, including lights, air conditioning, and brakes.

Where to Rent a Car in Panama

In Panama, you can find some of the most popular car rental companies such as:

Many of these rental companies have an office at Tocumen International Airport or in the downtown area. You can also use websites for price comparison to choose the right company and car like Expedia.

Motorbike

To ride a motorbike in Panama City, riders typically need a valid motorcycle license from their home country. The type B license for “Motocicleta” is required.

Motorbikes in Panama City are not very common, but they have gained popularity in recent years, especially for delivery services. Riding a motorbike in Panama City can be dangerous if you are not experienced, and the hot climate can make it uncomfortable.

Exploring Beyond Panama City

A motorbike allows you to easily escape the city and explore surrounding areas. The Panama Canal, with its impressive locks and surrounding trails, is within easy reach. For a day trip, consider the beautiful beaches along the Pacific Coast or the mountainous regions near El Valle de Anton, offering cooler climates and stunning landscapes.

Renting Motorbikes

There are a few companies that specialize in motorbike and scooter rentals in the city. They offer daily, weekly, or even monthly rental options. Prices can range from a few dollars per day, depending on the type of motorbike and rental duration. Some well-known rental agencies might allow online reservations, which can be convenient for planning your trip:

You can also find on-site rental options:

Moto Alquiler Panamá - Vía Porras, Panamá, Provincia de Panamá
Rental Motors - C. 62 A Este 3163, Panamá, Provincia de Panamá

Biking in Panama City

While few people use bikes for commuting in Panama City, many use them for leisure and exercise. Panama City offers a variety of biking paths that cater to both casual cyclists and avid bikers seeking adventure.

Best Bike Routes in Panama City

Amador Causeway: This dedicated bike road takes you from the city to the islands, offering stunning views of the Panama City skyline and the Pacific Ocean.
Cinta Costera: This coastal beltway is divided into three main sections, running from the upscale neighborhood of Paitilla to the historic Casco Viejo and the El Chorrillo neighborhood.
Camino de Cruces National Park: This park offers challenging trails through historical and natural landscapes.
Ancon Hill: This popular climb offers a paved road to the top with a moderate incline, providing a rewarding view of the city.

Sources & Footnotes

[1] Kraemer & Kraemer - Corporate Taxes in Panama: Vehicle Circulation Tax
[2] Expat Focus - Guide to Buying or Importing a Car in Panama
[3] Living in Panama - Buying a Used Car in Panama
[4] Chris Toone's Blog - Renting a Car in Panama
[5] Panama Equity - Renting a Car in Panama: An Expat's Guide
[6] Vista Cañas - The Complete Guide to Renting a Car in Panama
[7] Travel Rebels - Tips for Car Rental in Panama
[8] Go Panama Bike Tours - Discover Panama by Bike
[9] World Biking - Country Information: Biking in Panama
[10] Komoot - Road Cycling Routes in Panama