Becoming Cuenca

Cars in Cuenca

Jul 1, 2023

For over six decades, Americans have been in love with the automobile. This “love affair” was coined during a 1961 television episode of the “DuPont Show of the Week.” It was sponsored by DuPont, which at the time owned a 23 percent stake in General Motors.

My wife, Joanna, loved her Ford Mustang. And she had a sweet Camaro that was fully loaded. I still have fond memories of my 1963 Buick Special convertible.

Every American had a car they truly treasured. Cars are a part of the American life. It is why U.S. cities grew up to have mega-lane highways and huge parking lots for everyone who drove to work.

But that love affair may be coming to an end.

In May, the Washington Post had an article with the headline, “New cars, once part of the American Dream, now out of reach for many.”

The reason? According to Kelley Blue Book data, the average transaction price paid for a new vehicle in the United States is a whopping $48,008.

One big reason is rising interest rates. According to JPMorgan Chase & Co., the prime rate when the pandemic began in the United States, was 3.25 percent. The prime rate is the underlying index for most credit cards, home equity loans, lines of credit, personal loans, and auto loans.

Thirty months later, the Fed was trying to slow down the skyrocketing inflation as it increased it to 6.25 percent. On May 4th of this year, the prime rate was sitting at 8.25 percent.

All of this means the average monthly car payment reached $686 in mid-2022, and in April of this year, it hit $730. That is a 6.4 percent increase in just six months!

So, what does this have to do with Cuenca?

Darn good question.

Quite frequently, you will see on the Facebook group Ecuador Expats (35.9K members), a question from an American asking about purchasing a vehicle in this country. Others want to bring their beloved vehicle with them.

Though these questions are posted quite often, the vast majority of American and Canadian expats in Cuenca do not own a vehicle. I only have anecdotal evidence, not any analytical evidence, but I would say at least 95 percent of expats do not own a vehicle.

We walk.

We take a taxi.

Or we catch a public bus to our destinations.

Cuenca is a very walkable city. Unlike American cities, it was not built around the automobile. Every street in Cuenca has a sidewalk on at least one side of it. Most streets are lined with sidewalks on both sides.

Most people walk for the fresh air, the scenery, our health, and for our budget. We opted to forgo the car for using our two feet.

Joanna and I have no qualms walking to our mercado (12 minutes), to Mall del Rio (17 minutes), to Supermaxi, our go-to grocery store (18 minutes), to El Centro (34 minutes), or to one of our favorite restaurants, Cooking With Rey (39 minutes). Heck! I have walked across town numerous times to Gringolandia, which is an hour away on foot.

Walking is a part of life for the mast majority of expats in Cuenca. We look forward to it instead of driving a car to our destinations. No traffic to deal with. No need to look for a valuable parking spot. No huge outlay of cash to operate the vehicle.

When was the last time you saw a Datsun? Despite selling millions of cars around the world, the Datsun name was phased out in the early-1980s. Nissan replaced the marque for marketing reasons and name recognition.

I mention this as this Datsun 1200 pickup that was spotted on Ave. 27 de Febrero is probably 40 years old. Note how great of a shape it is in.

You will have no trouble finding classic cars (20+ years old) in Cuenca. A huge difference between Ecuador and the U.S. is the attitude about using something up before discarding it.

According to the U.S. Bureau of Transportation Statistics, in 2020, the average lifespan of a vehicle in the United States was 11.9 years.  Consumer Reports says the lifespan of a car is about eight years or 150,000 miles.

Because the average salary in Ecuador pales in comparison to the U.S., vehicles are kept for generations. They cannot afford to get another vehicle. It is cheaper to repair and maintain than going out and getting another vehicle.

Besides, why waste something that still can be used. There is only a finite amount of landfill space and natural resources to make vehicles are limited (such as many of the minerals essential for EV batteries are primarily mined and processed in China, or by companies within China’s sphere of influence).

That is why you see British Leyland’s Mini Coopers (1968-1986) all over Cuenca. Finding a first-generation VW Microbus (1949–1967) in the city is an easy thing to do. How about a Toyota Publica 800 Truck (1966-1969)? I saw one the other day when I had to make some copies of my documents. If you are a classic car lover, you will be in heaven in Cuenca.

This means that used car prices in Cuenca are a lot higher than what they would be in the United States and Canada. A Canadian blogger, who I respect, and who has lived in Ecuador for several years, stated that an 11-year-old Dodge Caravan in good shape might be worth a few hundred dollars in Canada, but claims it is listed for $8,000 down here.

The blogger exclaimed that he and his wife bought a 16-year-old Isuzu Trooper and paid “about six times the value it would have had in the United States.” It is a seller’s market when it comes to used vehicles in Ecuador.

By the way, the Datsun 1200 pickup barely made it to the U.S. market. While not very common in the United States, this beautiful small truck was sold in other international markets especially South America.

New cars are expensive in Ecuador. I have been told numerous times by Cuencanos that is because of Grupo Eljuri. Bloomberg said, “The Eljuri family is one of the most prominent in Ecuador’s business ecosystem. Its influence, some media report, is felt in more than 400 companies, mostly retail and automobile sales.”

In a 2018 article, Forbes magazine listed the Eljuri family (which lives in Cuenca) among the five wealthiest families in Latin America.

One reason, according to my Cuencano friends, is that the Eljuri family owns every new car dealership in Ecuador. You read that correctly! It is a complete monopoly.

No competition.

Think of it this way: Ecuador is the size of Colorado. If the Eljuri family had car dealerships in Colorado, they would own every one of them in Denver, Colorado Springs, Aurora, Fort Collins, Pueblo, Boulder…

Tariff and taxes are a huge reason for the high new car prices. In 2018, the average tariff for Ecuador was 35.4 percent. In addition to import duties, all imports are subject to 12 percent VAT (Value Added Tax) and other minor taxes that do not exceed one percent.

In comparison, the United States charges a measly 2.5 percent for cars imported. Trucks are a lot more, but still lower than Ecuador.

Though they are present throughout the city, you just won’t find a lot of “Mega Yacht” SUVs. There aren’t a lot of Nissan Armadas, Cadillac Escalades, Infiniti QX80s, Chevrolet Tahoes, Jeep Grand Wagoneers, and Ford Expeditions filling up the streets of Cuenca.

As mentioned before, that huge tariff is a big reason. According to the company’s website, the Nissan Armada is about $50,700 in the United States. Because of the tariff and VAT, it is probably around $73,400 (I have not gone out and priced it).

That is why you will see Renault’s Twizy on the streets here, including the one above parked on Calle Honorato Loyola. It is a two-seat electric vehicle designed and marketed by Renault.

Twizy is powered by a 17hp / 12kW electric motor, with a smooth one-speed automatic transmission and a light and compact lithium-ion battery pack. Believe it or not, its top speed is 50 miles per hour / 80 kilometers per hour.

Check out its size. It is ‘not’ an optical illusion with the 150cc motorcycle parked in front of it. Renault says it has one cubic foot of storage space.

I don’t think my Miniature Australian Shepherd, Peanut, is too thrilled about our ride.

Maybe he wanted a muscle car instead.

The Jiayuan Lingzu is a two-seater, featuring a Jeep-like grille, big black bumpers, with huge windows, and shiny sporty eight-spoke alloy wheels. This EV has a maximum speed of 40 km. / 25 miles per hour.

The Jiayuan Lingzu is manufactured in China by Nanjing Jiayuan Electric Vehicles. Joanna and I are seeing more of this car around town as it is very affordable and green. Going over 25 miles per hour is not needed on the streets of Cuenca.

Very small EV cars like the Renault Twizy and Jiayuan Lingzu are becoming more popular in Cuenca.  Small traditional cars like the Kia Rio are very common in this city.

No cheating!

Does anyone know where this pickup is from?

A white one and a black one of the same make were parked in a row on Calle Gonzalo Cordero Dávila.

Answer: It is an automobile company headquartered in Mumbai, India.

Formerly known as Mahindra & Mohammed, the company soon changed its name to Mahindra & Mahindra in 1948. Today, Mahindra India manufactures everything: SUVs, MPVs, pickups, LCVs, Heavy Duty Commercial Vehicles, electric vehicles, buses, trucks, and two wheelers.

Obviously, you can get some of them in Ecuador.

It is amazing how many more makes of vehicles you can buy in Ecuador than in the United States. That includes cars from France. Renault, Citroën, and Peugeot are all popular here. Your choices are almost endless, especially with the numerous vehicles from China. Ecuador’s market is a lot more open to the world than the United States.

Want to import your vehicle? If you are allowed to (Please check with the proper authorities if you are allowed to), a customs duty of 10 to 40 percent is applied. A 15 percent VAT is applied to all vehicles one brings into Ecuador. And any gasoline or diesel-powered vehicles older than five years of age are subjected to a 25 percent surtax. Please remember these figures may have changed as Ecuador is always changing rules and regulations.

Frankly, Cuenca feels a lot like Europe when it comes to vehicles. Motorcycles are everywhere! There are so many motorcycles delivering food, drinks, and medicines for Glovo (the app from Barcelona, Spain). Motorcycle shops are everywhere due to their huge popularity in this city.

Why are motorcycles such a huge percentage of vehicular traffic?

Motorcycles are a time-saver. Whether navigating the busy streets of El Centro or the narrow one lane streets, most motorcycles are able to bypass lines of cars. Yes, you will see them weave in between cars to get to the head of the line.

Need a place to park? Because motorcycles take up so little room, they can squeeze into places that a Ford Bronco cannot. The historic part of the city is a very difficult place to park one’s vehicle. Many times, it is very easy to park a motorcycle in front of where one wants to be.

Affordability may be the biggest reason. You will see a lot of motorcycles with an engine size of 150cc. It is three times as big as mopeds. In Cuenca, one will not see many of the big bikes. While the United States has people riding motorcycles with 500cc and 750cc engines, the most common engine size in Cuenca is 250cc, followed by a 150cc engine.

It is truly up to you if you want to own and operate a vehicle in Cuenca. There is no right or wrong answer, but the huge majority of expats are absolutely thrilled to be no longer dealing with the high cost of fuel, maintenance, tires, insurance, registration, taxes, depreciation, and financing. And let’s not forget the headaches of driving.

A lot more information on life in Cuenca can be found in my book, “Una Nueva Vida – A New Life.” Some say it is the most thorough book out there concerning moving to and living in this beautiful city.

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Salud, mi amigos.

Una Nueva Vida – A New Life

- by Stephen Vargha

There are over 80 professional-quality photos shot by me to give you a clear ‘picture’ about life in this historic mountain city.