Mexico has some special rules when it comes to its citizens driving a foreign vehicle within its borders. The rules surprise the average U.S. citizen (and Mexican citizens not familiar with the law) and can make a huge dent in your pocketbook, or worse, you could lose your vehicle permanently. There are three reasons why you shouldn't allow a Mexican citizen to drive your U.S. plated vehicle, unless you, as a U.S. citizen, are in the vehicle too.
Check to be sure your Mexican insurance company will cover Mexican licensed drivers. Some do and some do not. Mexican insurance is a specific insurance program for tourists and visitors.
Baja Bound's policies, underwritten by HDI Seguros and ACE Seguros, do allow Mexican licensed drivers, but the primary driver listed on the policy must be a U.S. citizen.
The most surprising reason is in regards to Mexican customs law. As is common knowledge, a U.S. citizen may freely cross into Baja with a U.S. plated vehicle. However, if a Mexican citizen crosses into Mexico with a U.S. plated vehicle and there is no U.S. citizen in the vehicle, there is a chance that Mexican customs officials will notice and send the Mexican citizen to secondary inspection. Upon checking documentation, if the Mexican citizen does not present U.S. documentation, the vehicle will be permanently confiscated by Mexican customs with very little chance of recovering it. In addition, the Mexican citizen will incur a huge fine of 80% of the vehicle's value. This fine must be paid or it will be on the Mexican citizen's record.
This may sound unbelievable, but it happens. A look into Mexican customs law helps one understand how the situation is viewed by Mexican customs and the reason behind the fine. When a Mexican citizen drives into Mexican territory with a U.S. vehicle and no U.S. citizen in the vehicle, Mexican customs sees this as attempting to smuggle the vehicle into the country. Since the vehicle is viewed as "contraband" it will be confiscated just like they would confiscate any other type of contraband. Being that it is illegal to bring contraband into the country, the offender will have to pay a fine. In the case of the vehicle, it will be 80% of the vehicle's value.
The vehicle is permanently placed in a gated and secured lot and will not be removed. Once the vehicle has been confiscated and paperwork completed, there is almost no chance of it leaving the lot.
You may hire a Mexican lawyer, but unfortunately the way the law is written, the chances of recovery are slim to none.
Unfortunately since the situation is considered illegal, a Mexican insurance policy will not help.
Mexican authorities, such as transit authorities can impound a U.S. vehicle driven by a Mexican citizen without a U.S. citizen present. If this happens, you may get the vehicle back by having the owner present himself with the vehicle title before the authorities.