NOTE: The information below is from my own and others' experience, is subject to change, and is offered for use at your own risk. Verify everything before your departure! For further info on driving, click here.
In December 1994 a new passenger and car ferry service, Crucero Express, was initiated between Colon, Panama and Cartagena, Colombia. This service solved the problem of the previously "impassable" Darien Gap of Panama. However, Crucero Express ceased operations in December of 1996** L
You must now find a ship (freighter) to take your car from Central America to South America. For information about transporting your car on a ship, click on this link, and scroll down to the section labelled "Mind the Gap", which gives details as of 2004 on how to go about it.
Another issue is the vehicle documentation required. It has long been believed that foreign vehicles needed either a "Carnet de Passage" or a "Libreta de Pasos por Aduana". Indeed, I bought a Libreta in Venezuela, assuming it was necessary to cross South American borders. However, it now appears that the Libreta is no longer needed, and maybe never was needed! See Libreta Update for further information.