#245 – Johnny Mueller on Living in Latin America, Roatan, and Car Buying Tips

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now as I wonder My thoughts ever straight Hi everybody I'm Johnny Mueller and you're listening to the expat files Living in Latin America the show that tells you what it's really like to live work play and or retire in Latin America I tell it just like it is so let's get started Now as you might imagine every time I do a show I seem to get a slew of emails Afterwards about 90% of them asking me to go into a bit more detail on the subject I spoke about in the previous show and I also get a few emails from people who have been down here to Latin America and who've

[00:46] experienced the same thing I just spoke about Only more so and then they proceed to tell me their own stories which are sometimes better than mine But never better than expat Eddie's stories go figure In fact people who've been down here before like to tell me their own hair-raising stories Mostly having to do with their encounters with crazy drivers bad traffic getting pulled over by the cops the horrible condition of buses and cars and well the horrible roads in general and Speaking of terrible drivers. I gotta tell you I was in Roatan the other day and after just witnessing a small public bus Take a curve too fast and go right off a cliff into a gully I asked my own taxi driver who didn't seem to be bothered much by the accident at all He just kept on going then I asked him an important question that led to another my question was how easy or hard?

[01:39] Is it to get a driver's license in Honduras? And you have to wonder since Hondurans just might be the worst drivers in the Western world and since Roatan is such a small place It's only got maybe 30,000 people I asked him if the drivers on the island had to get their licenses on the mainland And he said no you can go right down to the municipality driver station and get a license for about 30 bucks And I asked him what it involved and he said well you bring your ID down with you You take an eye test right next door which costs another five bucks Then you fill out some forms and they take your picture and in an hour or so you have your license Then I asked him the real important questions Are there any road tests or written tests before you get your license, and he said what for of course not? But he did say that if you go to the mainland to la seva

[02:27] Which is the closest city if you take the boat over which takes about an hour He said there and on the rest of the mainland. He's heard that people have to take a written test whoo Now doesn't that go a long way to explain why Honduras has some of the worst drivers in the history of the universe and why? Every car other than a brand new car driven right out of the showroom Has dozens of dings bangs and scratches in it Then I asked him a very important question pertaining to us gringos and expats and wannabes I asked him how a gringo or an expat can get a license Then he said the same thing applies you just go down to the driver station fill out some forms get your picture taken and pay The money and there you go then I said well you know in Costa Rica and Panama and Guatemala and a lot of other Latin

[03:13] American countries in order for us foreigners to get a driver's license We have to have at least a temporary Residency card and we bring that down and fill out to paperwork pay our money then we get it and he said no There's none of that stuff here. He just go down and get one. You don't have to be a resident You just have to be 18 have 30 bucks and take that stupid vision test And I later confirmed that that was completely true by talking to a lawyer however He did tell me that you're never gonna be able to go down and do it yourself Especially if you do it on the mainland unless you have pretty good Spanish because they don't speak English And of course the forms are all in Spanish, too And the lawyer did tell me that if you put down a hotel as an address Well, even if you're 18 and have the 30 bucks your license application might get rejected

[04:00] Because as the lawyer said as much as the Honduran officials would love to take your 30 bucks They're not all that interested in giving out driver's licenses to people who just come down for a couple of days They'd like to see that you're a stable long-term kind of tourist resident or investor So again, if you're gonna get any official paperwork done You have to get a lawyer and have them help you along with it Not only because everything's in Spanish, but because you could run into Unexpected roadblocks anywhere along the way and speaking of Roatan, you know I picked it as one of my 17 spots my 17 favorite Latin hidden Paradises in a report that I wrote a few years ago So it's been a few years since I've been back and it's changed quite a bit not for the better either Unfortunately, it's not quite undiscovered anymore

[04:47] And the main thing I see is that there are more gringos and it's much more expensive So does that mean I'm gonna take it off my favorite pick list? Well, not exactly because although it's much more expensive than it was a few years back It's still much cheaper than those tropical beach destinations that gringos and first world cruise ships love to hit It's still very safe and very beautiful and the people are extra friendly and it's not really overrun by first world tourists yet Which means it's still very laid-back But from what I saw on my recent trip I'm no longer really big on it being a great cheap expat place to retire anymore So basically it's all about the high cost of living on any tropical island really For example, if you want to buy a big old coconut from a vendor off the street

[05:33] Then of course, he'll take his machete and slice the top off it stick a straw in it Now you've got the freshest coconut water available sure you can get coconut water in the States But you're never gonna get it that fresh. Well on Roatan They'll charge you between three and four bucks a coconut and of course that includes the show You know the machete action and guys pay attention here Women can wield those machetes just as precisely as any man Maybe even more so which gives a new sense of urgency to the phrase if you don't behave yourself mister I'll cut it off Anyway, I was talking about the cost of living in the price of coconuts on Roatan Which like I said are about three or four bucks each However, if you take that little boat right back across the la seba, which is the little town

[06:20] Closest by on the mainland and that same coconut from a street vendor in la seba will cost you 50 cents and what does that mean you're looking at about a five to eight hundred percent markup just because it's on an island and you've got a Certain steady flow of gringo and European tourists coming in and again It's not the high-end ugly American tourists that you're used to seeing in places like Costa Rica Panama or Cancun and thankfully You don't see many whiny tourist kids at all And if they did come they'd surely wind their asses off because there's no McDonald's Kentucky fried Wendy's or any first-world fast food at all It's almost all adults mostly older savvy eco tourists and 20 ish and 30 ish divers and that's because this is the second best diving spot in the world

[07:07] In fact all around the island is a living coral reef that you can walk right out to and get this the very first day I walked out to about waist high and nearly stepped on an octopus and a couple of manta rays that were halfway hidden in The sand and no they weren't those giant manta rays that killed that crazy Australian crocodile hunter dude on nachio These guys were maybe only two foot wide but enough to panic you a bit knowing they've got a stinger in their tail Now the reef that Roa tans on that stretches up northward to Belize on up through the waters of the Yucatan Is second only to the Great Barrier Reef in Australia So Roa tan is basically a diver's heaven which means there's a great effort and a great push to protect the reef over there However, the locals don't give a damn and throw their plastic and garbage everywhere, but that's the Latin American mentality

[07:58] It's only the tourists and the foreign hotel operators that really care though in the little town of about 5,000 called Cox and Hole where many of the locals live the sewage from their homes and businesses runs directly into the ocean Naturally and thankfully it's on the other side of the island from where all the great beaches are and I can tell you it's Mission impossible to try to get the locals to change their ways They just won't and that's why like I said, you don't want to live work or play near any town or village That's on a main waterway like that In fact in all the tourists and diving areas you see nice first world garbage bins where you can separate your cans and bottles and Glass and plastic just like up in the first world and then you drive four or five blocks down that same road And you see a big old giant pile of disgusting garbage where the locals just dump their crap

[08:45] I mean, there's nothing more ironic when a first-world person drives by and sees that and the locals just don't get it The only way they're gonna separate their garbage much less put it in a designated spot Instead of dumped illegally on the side of the road is if they can make some actual money off separating the stuff Otherwise just like in the rest of Latin America the great out of doors is their personal toilet Okay, but back to the cost of living now on the island of Roatan Honduras You can buy a nice medium-sized watermelon for about four bucks Which is still a bit cheaper than in the states where I think they're about five bucks there But you see if you cross right over to the mainland you can get that same watermelon for about a buck So there's a 300% markup on the island

[09:32] But you see it's not all bad if you look at it the right way It could be a golden opportunity for an expat who wants to come in and make some money with his own business all you have to do is rent or buy a few acres of land on the interior of the island and Grow yourself some avocados or some melons or some coconuts or whatever I mean anything grows here and it's got three or four growing seasons Anyway, nature will do most of your work for you And when you get a crop you can sell it and make a ton of money And of course, you'll be renting or buying a piece of land on the side of the island that doesn't have the nice beaches So it should be dirt cheap and believe me There's a hell of a lot of unused land on that island that looks like it's just sitting there wasting away You probably can get it for a song Who cares if you don't have a nice white sand beachfront view in a year or so after some of your crops start coming in

[10:22] You'll be able to afford one and even if you don't have a green thumb or know the first thing about Gardening farming or growing things like me just get the land and hire one of the locals I mean you could easily find a great gardener for 200 to 250 bucks a month who could set the whole thing up for you And get it rolling. So anyway, there's an idea for you if you like island living Oh, and by the way I have to report that there is a real estate bubble on the island of Roatan and on the mainland of Honduras and Practically everywhere else in Latin America now, but I went into enough detail on that stuff in previous shows So, you know what I'm talking about and with any luck us expats and gringos will be around to pick up the pieces for about 20 to 25 cents on the dollar when it blows So I'll keep it posted when I see more signs that it's imploding and you can be sure I'll let you in on that

[11:12] Oh and just one more thing about Roatan when I was last there about four or five years ago There was a cruise ship port on one side of the island and the carnival and Royal Caribbean cruise ships would come in twice A week back then that meant two cruise ships a week But in being in Roatan just recently I noticed that on Tuesdays Wednesday and Thursdays There were all kinds of people wandering around generally old gray-haired retired couples with little cruise ship badges with ID numbers on them and Little vans motoring around that had cruise ship logos some with little signs on the front windshield saying Passengers must be back at the dock by six So anyway I soon realized that Tuesdays Wednesdays and Thursdays are cruise ship days and three cruise ships a day come through which is nine a week now

[11:58] Not two like in the good old days and since Roatan is now on the cruise ship itinerary Carnival and a couple other cruise lines have actually built their own many island playground and one-stop tourist shop called Mahogany Bay Right along the boardwalk where the cruise ships dock Kind of a mini Disneyland designed to keep the cruise passengers and their dough within about a thousand feet of where they step off The boat, you know give them a ton of diversions and things to buy so they don't actually grab a cab or a mini bus or walk off on their own to explore the rest of the island and Spend their tourist dollars on beer daiquiris and souvenirs over there And by the way, Roatan is about 30 miles long and about three to five miles wide So anyway that plastic little tourist town called Mahogany Bay

[12:46] traps about 90% of the people who leave the cruise ship and they never get any farther than that and that's just fine with the cruise ship lines Because they're the ones who set up the concessions So they get the dough in the end as you probably figured by now It's those cruise ships and all those passengers Just embarking three days a week from three gigantic ships that are jacking up the prices on that little island But it's still a nice destination Especially for divers and there's a lot of opportunity if you know where to look for it But anyway, I was talking about drivers licenses and bad roads and bad Latin American drivers Which brings me to this little email I got from Robert He says Johnny it occurs to me that the poor quality of roads in Latin America Might actually be a good thing from the point of view of many expats since it discourages gringos

[13:36] I mean if there were high quality roads going everywhere then before long there'd be hordes of gringos driving into the area Cheers Robert. Well, thanks Robert for that now I have to admit that 95% or more of first worlders coming down to Latin America Whether from the US, Canada, Australia or Europe, they almost never come down and rent a car It's generally first world people down here doing business who rent cars And then there's those groups who come down on charters and such who end up in pre-arranged tour buses for their length of stay Now on the tourist trail in Panama Costa Rica and such it's quite different There a lot of cars and small four-wheel drive vehicles are rented like Suzuki sidekicks and small four-by-fours like Toyota revs

[14:22] But when you're off the tourist trail rental cars are not big business at all Why because most people who come down here have a fear of driving where they don't know the language and therefore don't know how To read a map or read the signs and then there's that fear of dealing with the cops if they get stopped So I don't think the average tourist gringo or otherwise even thinks about the fact that the roads suck in the first place How does a green gringo down here know that there are potholes bigger than a Volkswagen and that road hazards are almost never marked? Which is why when you do rent a car down here Most companies will just offer you third-party insurance meaning that if you crash into somebody the insurance will pay for the other party involved But if the car you rented is damaged in any way when you return it they'll charge the repairs to your credit card

[15:11] So if you think when you buy that extra insurance coverage that it operates like full coverage You better ask and read the fine print because in many cases you will not be able to get that kind of coverage And that's why right before you drive that car away The rental company rep takes an extremely detailed inventory of that car and catalogs every ding mark and scratch Before you even drive it out of there and most will take photos, too So here's my suggestion take your own detailed photos of the car yourself with the rep present So that you've got a point of reference to that way if you get in an argument when you return the car You'll have a leg to stand on and make sure you take up some good close-up shots of the front and rear bumper because that's where the dispute will usually come if your car has six little bumper scratches

[16:00] When you drive it out when you get back, they might claim seven or eight So take a minute or two and shoot some photos yourself Bottom line in response to robert's email the giant potholes and the bad roads in general are the least of your problems as a driver Your biggest worry should always be the other guy Since the vast majority of cars down here are not in good mechanical shape So don't drive at night and do keep your distance and remember drivers. Just do not obey the rules of the road They just don't and since less than five percent of drivers took driver's head Basically latin drivers make the rules up as they go along and the cops don't really know the letter of the law themselves And when they do they rarely enforce it unless there's something in for them like a little bribe

[16:47] Now here's another true story. I have related to driving in latin america and actually I advise you to drive down here I'm not against it at all as long as you follow those guidelines i've pointed out a number of times Now if you remember a few shows ago I mentioned that a lot of people send me emails Asking if i'll meet them when they come down and help them with something or another For example find a house or get a building contractor or an architect help them find a lawyer or show them some farmland Or recommend an immersion course for them or help them find a good cheap safe apartment to rent or help them find a decent car While they're down here And I also mentioned on a previous show that you can go ahead and send me an email with your proposal and what you want to accomplish And how long you want to be here etc And maybe we can work it out and maybe not

[17:35] But if i'm not around to help you out myself, I can always recommend someone that I have confidence in Anyway along that line I was contacted just recently by a new friend of mine who did come to one of my expat wisdom seminars and He liked it so much down here that now he's back for three months and he wants to explore the whole region He's decided that latin america is the right place for him and now he's out on a location hunt And he contacted me because he's decided he's going to try one of my recommendations He doesn't want to rent cars or ride the public transportation He wants his own car So he has the freedom to come and go as he pleases And if you remember I mentioned some time ago that buying a car down here can be a very good and profitable idea As long as you again follow some guidelines

[18:21] And here's what you have to do If you stay more than a few months, it's a very good idea to buy a nice solid non-descript car for around three to five thousand bucks That way you can drive it around for however long you're going to be down here And then if and when you decide to leave back to your home country You'll be able to sell it at the end of your journey for pretty much what you paid for it And if you're lucky even more and that's because at three to five thousand bucks It's in an affordable range for quite a few working latinos Or if you don't want to sell you can store it somewhere very very cheaply here if you decide to leave the country And it'll be here for you when you come back And if for some reason you don't make it back just instruct your lawyer to sell it Now like I mentioned one of my new friends who came down to one of my expat wisdom seminars off the tourist trail

[19:10] Well, he flew in last week from his home country, Germany And he asked me to help him find a nice solid cheap car that he could use for the three months He and his girlfriend were down here checking things out and I happened to be around so we did come to an arrangement So I worked out a little plan to find him a car and believe it or not Even in latin america We did the whole thing in one day found the sellers inspected and tested the cars made a deal bought them to my lawyer's office He did all the paperwork the deed and the title transfer And then because we promised the seller cash to get a better deal, of course We went over to the local bank and we played the bank game for about two hours and eventually The seller walked out with his money and not only that we were able to get my friend a liability insurance policy on that car

[19:57] That very day and I always recommend that you get a liability policy and that's all you really need Now that costs about anywhere from 150 to 200 a year However, you can pay monthly that way for example If your payment's 15 a month and you're only down here for three months like my friend Your liability insurance for that whole period will only cost you about 50 bucks or less and down here liability coverage includes free towing 24-7 for any problem you might have with your car and there'll come no charge Even if you locked your keys in the car or ran out of gas Anyway, if like my friend you're only around for three months Then if you leave the country you just cancel the policy and stop paying and pick it up again If you ever come back and use that car Anyway, here's how we pull that deal together in just one day

[20:45] We searched the local classified ads which were in 100 Spanish, of course And we looked specifically for single party owners not dealers single owners In most cases I never recommend dealers because for one They'll be 10 to 20 percent higher than if you bought from the original owner And they'll have detailed and polished and spit shined that car up at the dealer And in some cases even have rolled back the odometers And I know that would seem like a tough trick to do these days with all those digital readouts and stuff But believe me these guys know how to do it. So just like in the states It's a good idea to keep away from scumbags like used car dealers lawyers and politicians And by the way in the states if a guy gets caught rolling back odometers He's gonna lose his license or even go to jail. But here in latin America Not only is no one checking basically nobody cares and the average latin would never even question it anyway

[21:36] Even if confronted with the facts Anyway about nine in the morning. We went to a restaurant sat at a table bought the three most read daily newspapers circled about 20 compact cars in the right price range And by the way, we selected cars that I know are very common and easy and cheap to get parts for Ones that your average neighborhood mechanic has a lot of experience with so we phoned up about 20 individual owners made appointments to see a half dozen of them and we spent the next couple of hours Meeting up with these sellers in Restaurant parking lots now, you know You've got a very motivated seller when he's going to drive the car from his house to a parking lot just to meet you Now that's another part of the gringo advantage when they hear that gringo accent over the phone

[22:22] They know you're serious Which means you're not the average latin guy who wants to trade you his tv and his microwave and he wants a six-month payment Plan and remember if you like the car always tell him you have cash Well, you don't have it on you, but it's at your lawyer's office Then he knows he won't have to wait for a check to clear or bounce Another advantage you have when he drives up to meet you at a parking lot Is that you can make a few judgments about the car and its owner as he rolls in And sometimes you could get a good idea on how he's used to abuse the car Because for example with one of the cars we looked at that rolled into a burger king parking lot when he finally parked it Five grown men got out guys with dirty filthy clothes and grimy hands like they worked in a foundry And the inside of the car looked and smelled like their clothes

[23:08] And remember when you get into the car take a good whiff if it's saturated with the smell of silicone or vinyl Rejuvenation spray or massive doses of glade or car air freshener. You know, this guy is in the business of buying and selling cars He's not an individual owner and right there that violates one of my rules So if you get into one of these cars and it smells like brute aftershave, you know cheap men's cologne And the dashboards extra shiny and bright Slippery to the touch Well, you know this guy buys and sells cars for a living and you're not going to get a deal Most likely the car and the motor are in much worse shape than they appear believe me These guys know all the tricks and in latin america There is no better business bureau to complain to so anyway

[23:55] We ran around town for the next few hours meeting up with motivated sellers in parking lots And it's important to note that I mentioned To my friend and his girlfriend to keep their eyes open for cars that have a phone number painted on the back of their window That means they're for sale too. A lot of people just don't bother to put an ad in the paper Now we saw a number of cars like that driving down the road And when we pulled into a burger king parking lot to check out another car we had an appointment to see We spotted a pretty decent looking volkswagen gulf in the parking lot with a phone number painted on the back window So we called that number the guy walked out of the burger king We got into the car checked it all out in its splendid dirty glory because you see He was an individual seller who had to use that car every day as his own personal vehicle

[24:41] And it was dirty and the dashboard dusty mcdonald's cups and burger king wrappers and all yet The motor was great didn't burn any oil and the car had no major bodywork done, which meant no big accidents And I could tell it had one minor little crack up on the right front fender, but it was repaired no big deal Now i'm not saying it was perfect. It had its defects The air conditioning wasn't working and the guy said it just needed a recharge But you never know and the driver's side door lock was broken on the outside Someone had broken the lock to steal his radio some time ago So he could lock the car well enough, but if it's locked he has to enter from the passenger side details details But this is latin america, you know and another thing the oil dipstick was broken

[25:28] Now to fix all those little things and make that car look really spiffy. It might take a hundred bucks whoopi, huh? Now obviously this guy did not take care of this car cosmetically, but funny enough unlike a lot of latins He actually kept up with the maintenance. He had an oil change service record and he used synthetic motor oil Which is very rare in latin america Synthetic oils like mobile one do exist down here, but he's the only latin guy I ever met who actually used it It's just too damn expensive for them. Now. I use mobile one I always have you can just about double the life of your motor if you use a hundred percent synthetic oil Just know that if you use any synthetic blend, it's really no extra help at all. You need 100 percent synthetic So anyway to my surprise this guy used synthetic oil and he said the brand name too

[26:18] And he seemed quite proud of himself for using it, which to me was another big selling point So in the end this guy asked about five thousand two hundred bucks for the car And we played the haggling game and got him down to about forty six hundred Now I looked up this very same car on the internet and down here the asking prices on this very same model Which is a 2004 vary between the top end of about sixty five hundred bucks to the bottom end of about four thousand Now here's the thing I know if my friend drives this thing for three months and decides to sell it All he's got to do is spend a hundred bucks and then get it detailed And I believe at least he'll be able to get what he paid for it If not more that is unless he falls into one of those volkswagen sized potholes Then all bets are off but barring bad luck. He basically has free transportation as long as he's down here

[27:08] So that's something you should really think about if you plan on coming down here for more than a couple months Now if you decide to go the rental car route, you'll be paying minimum 30 bucks a day or about 900 a month And for three months probably around fifteen hundred to two grand because they'll give you a long-term deal But why do that when you can buy a car drive for free and maybe even make money in the end? South of the border Down mexico way That's you've been listening to the expat files living in latin america Coming to you each week from somewhere south of the border and don't forget you can email me on anything at all about latin america The expat files at gmail.com See you next time most famous Ah