Should You Ship Your Car from the US to Serbia? Or Should You Buy a Car in Serbia?

As I blogged last month, we just bought a new, higher mileage SUV using America's Cash for Clunkers program with the main idea of shipping it to Serbia as soon as the state sends us our title paperwork (which takes months here, arrgh.) I've tried to ship cars in the past (never yet actually made it), but since a reader emailed me a "ship from the US vs buy in Serbia" question I thought I'd outline the factors we've considered in our decision-making process.

1. Can you afford to buy a car outright?

Buying a car in the US is vastly less expensive than buying it in Europe. But, if you're going to take your US car to Serbia, you can't be leasing it (leases usually prohibit you from taking the car outside of North America). You may not be able to take a car you're financing (buying on credit) outside North America either. You have to own title clear and outright.

That's to stop people from buying lots of new cars in the US and then flipping them in other countries where cars are far more expensive (pretty much everywhere on the planet).

If you have European plates, you can drive your car as a tourist to Serbia. But, once you've been there for a year or two the police will require that you get local plates. For local plates, you'll have to register it locally, and pay taxes on it.

2. Can you afford the taxes & insurance?

If you register your car in Serbia, you'll have to pay import taxes or duties. Each returning citizen is allowed to bring one car duty-free with them. You then are required to own the car for a certain number of years before selling it -- that's to stop you flipping it for a fast buck.

Annual car taxes in Serbia vary depending on the engine of the car. If you're driving a car with a smaller engine, it's cheaper. If you're driving a revved up SUV or truck, it's far more expensive. We chose the base model RAV4 due to this, the sport model would have been more in taxes.

Insurance isn't cheaper than the US, except for one thing. In the US most people insure for "comprehensive coverage", whereas in Serbia almost no one does. They pick the cheaper version. Your US coverage will not carry over to Serbia, you'll have to buy specific insurance. If your car is being delivered to a port in Croatia, Germany or other country, you'll also need insurance for that country for the time in which you drive the car from that country to Serbia, for which you will be GOUGED. It's a rip off, but it is what it is.

3. Do you strongly prefer automatic transmission?

Car dealers across Europe don't tend to stock automatics. You'll have to pay extra and probably wait for delivery. If you want to buy an automatic used, good luck. I've seen them, but it's not a big selection.

4. How many miles per gallon does your vehicle get?

Gasoline prices are, and always will be, more than double in Europe. Filling that tank becomes painful. Diesel, which is artificially high in the US as a form of tax on the shipping industry, is more economical than gas in Europe. So, diesel models are really popular over there. You can also have a Serbian garage switch you from a gas to a propane-burning engine. It's much cheaper and the investment may be $1000-2000 at most for the engine work. However, you'll obviously never take the car outside of areas with lots of propane stations ever again.

5. How much do you want to spend on the car itself?

Cars are often 50-100% more expensive in Serbia than in the US. Yes, that extends to used cars as well. I was shocked at the high sticker prices for used cars there. You'll see a lot of German-made cars on the roads because so many Serbs have relatives in Germany and Serbs trust German engineering, but they paid nearly double what you would have for the same model back home. Increasingly you'll see some Japanese cars, dealerships are springing up. But Japanese cars have higher import fees in many European countries to protect European cars, so there's an added cost there too.

6. Do you want to impress people or do business in Serbia?

People really judge you by the car you drive. (In Croatia this is more extreme, people really, really, really judge you by the car you drive.) I've been stunned by the snap judgments Serbs have made about me based on my car. (I drive a VW Passat which a Serb acquaintance told me is an "uneducated shopkeeper's car.")

If you plan on doing business in Serbia -- or Croatia -- an uber-fancy car such as a Maybach, a Jaguar, etc., will give you a type of instant credibility and respect that otherwise could take year to achieve. I think this is insanely stupid, but, again, it is what it is.

The nice thing is, it's OK if it's a slightly older model. Brand matters more than age. People will be far more wildly impressed by a used 2004 Bentley than a brand new, more common BMW that cost the same amount. So, if you want to impress people with your car, go for a flashy brand. In fact, if that's your goal, I'd make sure a native vetted choices before I bought.

7. Maintenance considerations

Garages are cheaper. In the US, a typical Audi dealership will charge over $100 an hour for basic maintenance fees. Serb labor is a lot cheaper, although parts probably won't be.

Parts for US-brand cars sold in the US will be tough. (As you may know, US brands like Ford have a completely different model line in Europe, so just because Ford Europe exists doesn't mean you can get new brakes for your F150.) If you bring over an American or Japanese pick-up truck, in particular, you'll be hard put to get parts quickly if at all. Practically no one drives a pick-up in Serbia. If it's a recent model Japanese sedan or SUV, you should be OK. And European-maker parts are no problem.