On the military checkpoints, in many cases the best thing to do is not speak any Spanish unless you are relatively fluent. Smile, nod, let them point at things they want to see and you'll soon be on your way. Bringing stickers, magazines and energy drinks will get you through without much more than a cursory look in many cases
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I would add that anyone considering a trip to Baja should really do it during one of the big desert races down there (such as the Baja 1000). While Ensenda and San Felipe will be crazy busy, you can still have super solitude camping, find accommodations and not deal with traffic all while getting to see 800HP trophy trucks blast down gnarly roads. Some of my first trips to Baja (outside of the tourist zone) were to camp and spectate the Baja 1000. We would check out contingency in Ensenada (which is freaking amazing if you like off-road vehicles, motos and ATV's of all shapes and sizes) and then we would camp along the race course further south a time or two. If your not feeling the race or want to change speeds, camp on the other side of the peninsula or south of the race. I heard someone say they don't go to BC during the races because it would be like going to Moab during EJS... it would be more appropriately described as not going to Utah during EJS as the place is so huge and there are thousands and thousands of miles of routes.
One last thing, insurance. By MX law you are supposed to have a MX insurance policy when traveling outside . I used
Baja Bound the first few times I drove down, in the more recent years I was able to get my insurance company to print me a form saying I have full liability coverage in MX, it technically won't satisfy their law that it be from a MX based insurance company but it does protect me from everything but a ticket from them perhaps, i.e. if I were to have an accident coverage would apply but I might get hassled for not having their insurance, take the risk if you like. I've only ever been asked for my insurance coverage once, and they also asked for my title (I make a high quality copy rather than take the original which they ask for). If you don't have title on your vehicle or have a leinholder, you are supposed to take a letter of release from your bank allowing you to travel in MX with the vehicle. It's not something you will likely get asked for but the further south you go in BC the more likely you are and if you ferry from BC to the mainland it is mandatory to have the paperwork before you are allowed to book passage on the boat. BajaBound also has some great information on traveling down there too:
http://www.bajabound.com/before/
Great trip report Greg! There is something special about sitting on a beach with toes on the sand with no cell reception