Mexico Ends Used “Chocolate Car” Regularization Program

Mexico’s federal government has formally ended the program that allowed the regularization of so-called “chocolate cars,” or used vehicles imported irregularly from the United States and Canada. The move met strong support from the automotive industry, which for years has argued the measure distorted the market and encouraged contraband. The agreement was repealed through a decree published in the Official Gazette of the Federation (DOF). 

The decree reverses a motion issued in November that had extended the program through December 2026, effectively closing a scheme launched in 2022 under former President Andrés Manuel López Obrador. According to the decree, the program enabled the regularization of 2.99 million vehicles as of Nov. 25, 2025, based on data from the Public Vehicle Registry. 

Guillermo Rosales, President, Mexican Association of Automotive Dealers (AMDA), welcomes the government’s decision, saying the repeal “will provide certainty to the domestic market and ensure an orderly entry of used vehicles.” AMDA had long criticized the program for encouraging the influx of used vehicles that do not meet Mexico’s import, safety, or emissions standards. The association also had argued that the scheme fostered corruption, enabled smuggling, and flooded the formal market with low-value units, undermining new and used vehicle sales.

Previously, the federal government had argued the measure provided legal certainty for owners and supported public security by identifying vehicles and their proprietors. The program operated in 16 states, including Baja California, Chihuahua, Sonora, Tamaulipas, Jalisco, and Nuevo Leon, allowing owners to pay a MX$2,500 (US$140) fee to obtain registration and state-issued license plates. 

However, critics say that the program had unintended consequences for the used car market, particularly in northern Mexico. In Chihuahua, new vehicle sales fell 4.5% in 2024, compared with national growth of 10.6%, according to AMDA. Sinaloa recorded a 4.7% decline, while Baja California and Tamaulipas also posted weaker performance. 

“This decline is not coincidental,” said Rosales in early 2025. He noted that regions with high levels of regularized chocolate cars saw sharper drops in formal sales, despite strong local economies and near full employment. AMDA also warned that the proliferation of irregular vehicles had broader effects, including lost tax revenue, limited oversight of importers that could facilitate money laundering, and higher environmental costs due to noncompliant emissions. 

With the repeal, used vehicle imports will now be governed strictly by the USMCA, which sets limits on vehicle age and requires compliance with mechanical and emissions standards. 

The policy shift comes as Mexico’s light vehicle market shows mixed signals. While monthly sales weakened during parts of 2025, cumulative sales from January through November rose about 1% year over year, and total sales are projected to reach around 1.6 million units for the year.