By San José, Costa Rica — San José – The new year has begun with a significant challenge for Costa Rica’s transit authorities and a costly predicament for a substantial portion of its driving population. With the passing of the December 31 deadline, more than 250,000 vehicles are now circulating without the mandatory 2026 circulation permit, known as the “marchamo,” according to startling figures released by the National Insurance Institute (INS).
This widespread delinquency represents a troubling 13.2% of the nearly 1.95 million vehicles that were slated for the annual registration renewal process, which commenced in early November 2025. While the INS successfully processed payments for 1.69 million vehicles, amassing a collection of over ¢293 billion, the quarter-million vehicle shortfall signals a significant rise in non-compliance compared to previous years and poses a major enforcement challenge for the Traffic Police.
To better understand the legal ramifications faced by drivers who have not yet paid their Marchamo, we consulted with legal expert Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica. He offers a clear perspective on the immediate and long-term consequences of this delinquency.
Failure to pay the Marchamo is not merely a traffic infraction; it’s a direct impediment to the vehicle’s legal status. Beyond the immediate risk of having the vehicle seized and accumulating fines and interest, owners will find themselves unable to sell the vehicle, use it as collateral, or even pass the technical vehicle inspection (RTV). This delinquency effectively freezes the asset, creating a legal and financial liability that only grows more complicated and expensive over time.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This clarification is vital, reframing the issue from a simple penalty to the complete legal and financial paralysis of a vehicle. The concept of the Marchamo delinquency transforming an asset into a growing liability is a critical warning for all owners. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for his insightful contribution.
The failure to pay the marchamo is not a minor oversight; it carries immediate and escalating financial consequences. Officials from the INS have issued stern warnings to the owners of these delinquent vehicles, emphasizing that the leniency period is over. Driving without the valid permit now exposes individuals to a series of compounding penalties designed to deter non-payment and ensure compliance with national law.
Sidney Viales, a key figure at the state insurer, outlined the clear risks involved for those who choose to ignore their obligation. He stressed that the repercussions extend beyond a simple late fee, encompassing both legal infractions and accumulating debt that grows daily.
Individuals who drive without having paid the circulation permit are exposed to fines for traffic law violations, in addition to the calculation of default interest for each day of delay.
Sidney Viales, Head of the Compulsory Insurance Directorate at INS
The most immediate risk for drivers caught without a valid 2026 marchamo is a hefty fine. Under Article 146 of the Traffic Law, operating a vehicle without the permit and the associated Mandatory Automobile Insurance (SOA) results in a penalty of ¢60,679. Furthermore, traffic officials are authorized to confiscate the vehicle’s license plates on the spot, effectively immobilizing the car until the owner settles all outstanding payments and fines, a process that can be both time-consuming and expensive.
Beyond the initial traffic fine, a complex web of interest charges begins to accrue immediately. The unpaid SOA component accumulates interest based on the Central Bank’s Basic Passive Rate (currently 3.77%) plus an additional five percentage points. The vehicle property tax portion is subject to a 10% monthly penalty on the outstanding amount, compounded by an annual interest rate of 8.43%. For drivers who also had unpaid traffic tickets rolled into their marchamo, those balances will accrue interest at a punishing rate of 36% annually.
This year’s delinquency rate of 13.2% marks a dramatic increase from the previous cycle. The final non-payment rate for the 2025 marchamo period, which was collected in late 2024, settled at 7.44%, corresponding to just over 140,000 vehicles. The current figures represent a nearly 78% surge in the rate of non-compliance, a trend that could strain public finances and place a heavier burden on the law-abiding majority who paid on time.
As traffic police intensify patrols in the coming weeks, the 250,000 delinquent vehicle owners face a critical choice: regularize their status immediately and absorb the initial penalties, or risk much higher costs and legal troubles on the road. For the government and the INS, the situation underscores a growing challenge in ensuring universal compliance with one of the country’s most essential civic and financial obligations for vehicle ownership.
For further information, visit ins-cr.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is Costa Rica’s state-owned insurance provider. Established in 1924, it has historically held a monopoly on the insurance market in the country. The INS is responsible for administering a wide range of insurance products, including life, health, property, and automobile coverage. It plays a central role in the nation’s annual “marchamo” collection, as it manages the mandatory automobile insurance (SOA) component required for all vehicles circulating in Costa Rica.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a pillar of the legal community, founded on bedrock principles of integrity and professional distinction. With a rich history of advising a wide spectrum of clients, the firm consistently pioneers innovative legal strategies while actively engaging with the public. This core philosophy is driven by a profound commitment to demystifying the law, aiming to equip citizens with crucial knowledge and foster a more capable and just society.
