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Can you register your vehicle in South Dakota and live in Mexico?

  • Tue, 08 Mar 2022 23:13:21 -0800

Can you register your vehicle in South Dakota and live in Mexico?

If you’ve ever driven on the streets of Mexico—especially in a town popular with tourists or close to the border—you may have noticed a strange occurrence. While license plates from a variety of U.S. states can be seen, there seems to be a disproportional number of plates from South Dakota. The state of South Dakota has less than 900 thousand residents, and the quickest route from a relatively major city like Rapid City to a border town like El Paso/Ciudad Juarez is a whopping sixteen-hour drive. At first glance, you might think Mexico has an extremely successful tourist campaign in the sparsely populated state, but the reason is far stranger. The truth is that many of these so-called South Dakota residents have likely never set foot in the state in their lives.

A dilemma for Ex-Pats

When many U.S. residents decide to move to Mexico and make a new life as ex-pats, they choose to take their car with them. It makes a lot of sense. They can load up their own vehicles to prepare for the move and then keep them handy for their new lives abroad. This is doubly true for ex-pats wanting to live in places that don’t require a temporary import permit for cars, like the Baja Peninsula, Quintana Roo, portions of Sonora, and anywhere within 25 kilometers of the border.

However, the home states of these ex-pats don’t always make this easy. Many states require annual or biennial inspections. These inspections can vary, but they include safety inspections, emissions testing, smog testing, and VIN inspections. Many of these states, like California, Texas, North Carolina, and Florida, are densely populated, meaning that many ex-pats in Mexico hail from them. While these inspections are easy to comply with when you live in-state, it’s often a massive undertaking for these residents to drive all the way home just for a ten-minute inspection. As a result, there is a huge incentive to have your plates registered in a place where no periodic inspections are required.

South Dakota to the rescue

Much to the delight of ex-pats in Mexico, the state of South Dakota saw this demand and decided to do something about it. They adjusted their laws to allow non-residents to register their vehicles there. The result was an immediate success. Now, the state has over 58,000 vehicles registered to people who live out of state. Additionally, they don’t require any VIN verification to register, the entire registration and title process can be done by mail, there are no emissions or safety tests required for vehicles, and the state will mail you your license plate anywhere in the U.S. Perhaps most essentially, you do not need a South Dakota driver’s license in order to participate.

Why South Dakota?

We’ve outlined some benefits of choosing South Dakota for your vehicle’s registration, but you might be wondering what makes it different from other states with loose regulations. After all, only nineteen states require annual safety inspections and five more require biennial safety testing. Only nine states require emissions testing, and only nineteen require VIN inspections. So what sets South Dakota apart from other states like Montana, Alaska, Michigan, or North Dakota?

There are five main benefits to choosing South Dakota:.

1. You aren’t required to show proof of insurance as an out of state resident or to renew a registration in South Dakota. This is a major benefit because if you plan on spending most of your time in Mexico, paying for car insurance in the U.S. is a complete waste of money. U.S. car insurance isn’t valid in Mexico, so that monthly payment would contribute to nothing beyond the ability to re-register in another state. Obviously you shouldn’t drive uninsured, but you should stick to Mexican Car Insurance when driving in Mexico.

2. Choosing South Dakota allows you to sever tax-related ties with your home state. When a state tax commission is deciding whether or not you are considered enough of a resident to pay state taxes, they look at a number of factors like your bank account, your voter registration, and your vehicle registration. Registering your vehicle in South Dakota allows you to circumvent this process and potentially save a lot of money on state taxes for a place you don’t live.

3. South Dakota makes it incredibly easy to register and renew registration by mail. Unlike many other states, you never have to set foot in the state to get everything you need. They will mail it anywhere in the U.S.A. Renewal is usually as simple as making a quick phone call and updating your information.

Why Clay County in South Dakota?

In southeast South Dakota lies tiny Clay County, a region of only 15,000 people that lies along the border across from Nebraska. Despite their lack of population, this county has become among the most popular places in South Dakota to register your car. The reason is simple: they’ve embraced their special car licensing laws and are actively encouraging people to participate.

The Clay County treasurer’s office has become a hot spot, specializing in the processing and handling of these out of state license plates. It likely started due to the ROTC members who registered there while attending the nearby University of South Dakota. After graduation, they kept their registrations after being assigned new posts elsewhere in the country due to the legal ease of avoiding re-registration.

Soon snowbirds caught on the practice, and Clay County’s treasury department decided to run with it. Many other small counties refuse to handle the registrations for ethical or logistical reasons, so the tiny corner of South Dakota’s open arms have been attractive to thousands of ex-pats.

Nationalizing a Car in Mexico

You might be wondering about a solution that seems simples on paper: getting a Mexican license plate. Unfortunately, this is easier said than done. Various states in Mexico have strict requirements about which cars can be nationalized. In some areas, cars can only be nationalized if they are between five and ten years old. In others, the car must be between eight and nine years old. There are various requirements that change depending on whether your car is used or new. It can also be extremely expensive, with import taxes and value added taxes (VAT) that can range into the thousands of dollars. Between the strict requirements and expenses, most ex-pats find that registering in South Dakota is easier, cheaper, and less of a bureaucratic headache.

How can I participate?

If you want to take advantage of South Dakota’s registration loophole, you’ll have to start by visiting the South Dakota Department of Revenue ( https://dor.sd.gov/individuals/motor-vehicle/all-vehicles-title-fees-registration/. It’s a relatively short and simple process. Be sure to follow all the steps, including  sending the original title because copies won’t be accepted. You also must be sure that the title doesn’t have the word ‘export’ anywhere on it. If the car is a recent purchase and your name doesn’t already appear on the title, you’ll have to also include a purchase agreement or bill of sale. These documents can’t have a foreign address on them, so be sure to purchase the vehicle while still in the U.S. if possible. If the vehicle has your name on it but is titled in another state, the issue date for that title has to be at least six months old at the time you apply for the South Dakota title.

Additionally, you will need to include a copy of a current U.S. driver’s license or passport for yourself and any additional people whose names will be on the title. This isn’t required if you have a South Dakota driver’s license or ID, but since you’re reading this article, we’re assuming you don’t. Also include a copy of the social security cards for any owners whose names will be on the title. If you don’t have a social security card, a W-2 with the owner’s name and social security number is also acceptable. Finally, include a contact phone number and email address.

Assuming you’ll be sending your registration to Clay County, mail all of this information to the following address: Clay County Treasurer, 211 W Main St, Suite 201, Vermillion, SD 57069. Because this mail has sensitive information like your address and social security number, we recommend getting a tracking number for the package. You wouldn’t want the mail to get lost and end up in the wrong hands.

Car Insurance in Mexico

Once you’ve set up your car registration in South Dakota and are ready to move to Mexico, there is still one last issue to contend with. You will need Mexican Car Insurance. We at AmigoMexInsurance.com sell Mexican Auto Insurance, Liability Only and Full Coverage, including daily policies and annual Policies.  Talk to one of our agents today to ensure your safety on the Mexican motorways.