Trade Talk Blog T
he process of importing a vehicle into the United States is not as expensive as you might think, but it’s not exactly cheap either. It’s easy to get caught up in the excitement of owning a new ride and not think about all the costs involved. But as with any major purchase, it’s important that you do your research before making a decision.
One of the biggest factors is the cost of importing the vehicle you’ve been eyeing into the United States. The truth is that there’s no way to accurately estimate this cost until you’ve done some considerable research, but it can be a very expensive process if you don’t know what you’re doing—and we’re here to help you understand what those costs will be.
So, if you’re ready to import your dream car, keep reading! We’ve put together this handy guide to walk you through all the costs you can expect when importing a vehicle into the United States.
Things to consider before importing a vehicle
When considering whether to import a vehicle into the U.S., you must first decide whether it is worth it for you financially. If you’re importing a car for personal use, keep in mind that owning an imported car has many benefits, including lower fuel costs and fewer taxes on certain models.
On the other hand, if you’re importing a vehicle for resale purposes, it may be worth considering whether it really is profitable—but again, this depends on how much it costs to import versus how much profit margin there is on the sale price of the car once it arrives.
Generally speaking, if you buy a car that needs repairs or maintenance before being shipped over (which is common), you should expect to pay more than if it were already in good condition when purchased. The same goes for cars that are older or have more miles on them—they’ll need more work done before they can be safely driven on American roads and highways.
Other factors that go into the decision to import a vehicle into the U.S. include:
- The type of vehicle you plan on importing (make/mode)
- The age of your vehicle (some vehicles can benefit from the 25-year rule)
- The condition, mileage, and history of your vehicle
- Whether it’s a classic or luxury car (to benefit from the show or display rule)
What are the costs involved in importing a vehicle?
The process of importing a vehicle into the United States is not as expensive as you might think, but it’s not exactly cheap either. There are several costs to consider when importing a vehicle into the U.S., including:
- Import Duties: U.S.-made vehicles may qualify for free trade, but foreign-made vehicles are dutiable at the following rates:
- 5% for vehicles
- 25% for trucks
- 0-2.4% for motorcycles
- Customs Bond: A customs entry bond is required for every imported vehicle. You can choose to obtain a Single-Entry Bond (for one-time imports) or a Continuous Bond (for multiple imports within 12 months).
- DOT Bond (for nonconforming vehicles): If your vehicle does not have a DOT certification label, it must be imported as a nonconforming vehicle, and you must then register with a DOT-Registered Importer (RI) and post a DOT bond. The value of the bond must be 1.5 times the vehicle’s dutiable value.
- Gas-Guzzler Tax: Certain imported automobiles may be subject to the Gas-Guzzler Tax. The amount of the tax is based on a combined fuel-economy rating assigned by the EPA for gas-guzzler tax purposes. The higher the fuel economy, the lower the tax. No tax is imposed on vehicles with a combined fuel-economy rating of at least 22.5 miles per gallon.
- Insurance: Once you import your vehicle, you will want to purchase an insurance policy because, to drive in most states legally, you’ll need to meet minimum vehicle insurance requirements set by the state. If you’re shipping your vehicle from abroad, it’s also a good idea to have an insurance policy that covers the shipping process.
- Brokerage fees: If you work with a customs broker, be prepared to pay a small fee for their services. Most vehicle importers prefer to work with a customs broker to streamline the vehicle importation process.
- Shipping fees: Unless you decide to drive the vehicle across the border yourself, you can expect to pay shipping fees to import your vehicle. The cost will depend on the method of transportation, which we’ll discuss in the next step.
You may also have other expenses related to the licensing and registration of your vehicle when it arrives in the country. Consider these costs before importing your vehicle into the United States.
The benefits of buying a car in another market and importing it into the United States are quite substantial. But it’s easy to become discouraged by the challenges and costs involved. The best way to understand the true cost of importing a vehicle is two-fold: first, do your research. And second, make sure that you know exactly what to expect. We’ve addressed these points in this article, and we hope that by reading it, you now have a better idea of the true cost of importing your vehicle into the United States and can make a better-informed decision.
At GHY, we’ve helped hundreds of importers bring their vehicles into the United States without hassle. Book a meeting with one of our Trade Experts to start importing your vehicle today.