Importing Japanese Cars: An Introduction
Japan has a reputation for manufacturing iconic vehicles, which have built a wide and loyal customer base throughout the world. From the reliable Toyota Corolla to the sleek Nissan Skyline GT-R, there’s a vehicle for every taste and every occasion. However, before you can drive one of these iconic cars on the streets of your country, you need to ensure that you are fully compliant with the regulations surrounding the import of vehicles from Japan.
The laws which govern the import of Japanese cars are overseen by the Ministry of Economy, Trade and Industry, or METI , which issues a certificate of compliance for each vehicle. This indicates to the buyer that the vehicle has been manufactured in accordance with METI’s stringent regulations, which are designed to ensure the safety and reliability of all motor vehicles on the roads in Japan.
The laws surrounding the import of cars from Japan are designed to protect the interests of the public and car manufacturers, and ensure that every vehicle on the road meets the relevant safety standards. Furthermore, these laws also prevent dealers within Japan from overcharging customers, as they are required to comply with strict regulatory controls when exporting vehicles to other countries.
Japanese Car Import Eligibility
When it comes to understanding whether or not a vehicle is eligible to be imported from Japan, there are several important factors you need to know. These eligibility prerequisites relate to the age of the vehicle, the vehicle’s emissions standards and any relevant safety considerations the vehicle must meet to be considered eligible. One of the primary eligibility concerns have to do with a vehicle’s age and whether or not it exceeds 21 years old. Vehicles that are 21 years or older are exempt from certain safety and emissions requirements, making them eligible to be imported from Japan. But vehicles that are 20 years old or younger must meet FMVSS (Federal Motor Vehicle Safety Standards) and EPA (Environmental Protection Agency) requirements in order to be allowed into the United States. This makes vehicle age one of the most important considerations the government uses to determine eligibility. Another key factor relating to eligibility are the EPA specifications. Any vehicle that doesn’t meet EPA emissions standards is ineligible for import and would be turned away at customs at the border. Imports must also be U.S.-spec emissions compliant and are subject to EPA and DOT examination upon entering the country. If you’re working with an experienced exporter/importer, you shouldn’t face significant challenges when it comes to meeting these requirements. The other major factor you need to consider is whether or not the vehicle you’re purchasing complies with federal motor vehicle safety requirements. Generally speaking, this means the vehicle has to meet safety standards set forth by the U.S. government, as well as the state-specific standards in the state in which the car is registered. If it does, the vehicle is considered eligible for import into the United States.
How to Import Japanese Cars: Step by Step
Step 1: Identifying Your Vehicle
Identify the used car you would like to import. Look for a vehicle that meets the technical requirements of your destination country and suppliers that have a good reputation. Verify that you have met the value requirements before you proceed. It is possible to have more than 1 vehicle within the same shipment. Verify with your freight forwarder.
Step 2: Sourcing Your Used Japanese Car
Once you have identified your vehicle, you can provide specifics to your supplier. This includes your requirements for make, model, model code/number and VIN/serial number, as well as providing the vehicle condition and quantity. A detailed photos should be sent to your supplier. Your Japanese supplier will then provide you with a detailed vehicle condition report and final quote. Take time to review the report and quote carefully to ensure that it is satisfactory.
Step 3: Initiate Payment
If you are satisfied with the condition report and quote, your Japanese supplier will ask you to initiate payment for the vehicle or vehicles being imported. It’s important to not only read but understand all aspects of the payment process beforehand. Any additional information requested by your supplier must be provided as well. Once the importer has verified that full payment has been received for the vehicle, the supplier will send you a receipt for the vehicle, including pictures.
Step 4: Shipment of Used Japanese Car
The shipment of used Japanese cars involves arranging for documentation and pickup of the vehicle by the seller. Once the vehicle is picked up, the seller will provide documents to the freight forwarder. The freight forwarder will also assist with confirming the transport mode and provide a delivery quote. The freight forwarder will then help with loading the container and sending an email to both the importer and seller with loading pictures.
Step 5: Arriving at Destination
The steps to clearing the vehicle upon arrival at its destination depend on the country. In some cases, customs may have their own clearance agents. If so, it will be the agent who has access to clear the vehicle, but your local partner, such as a freight forwarder, may be able to help. The costs of clearing the vehicle and required documents may vary by destination.
Japanese Car Import – Emission and Safety Standards
A critical aspect of the process is ensuring that the car meets all necessary emission and safety standards. To that end, it’s essential to consult with both the U.S. Department of Transportation (DoT) as well as the United States Environmental Protection Agency (EPA). The EPA enforces the Clean Air Act and is responsible for approving the importation of vehicles which do not conform to applicable FMVSS (Federal Motor Vehicle Safety Standards) standards but are determined to be eligible for importation.
Section 583 of the EPA import regulations provides a second means by which importation of a noncompliant motor vehicle can be authorized. Importation under Section 583 permits the importation of a vehicle which does not conform to all applicable EPA standards upon the posting of an EPA compliance bond or EPA waiver. This compliance bond assures EPA that the ineligible vehicle will be brought into compliance with EPA emission standards within a reasonable period of time. The EPA 1-Year Compliance Bond guarantees that the vehicle or its parts will be brought into compliance within 1 year from the time of entry. The EPA 5-Year Compliance Bond guarantees importation of the vehicle, or its parts, will be brought into compliance within 5 years from the time of entry and assessed a civil penalty if not. The requirements for EPA compliance when entering Japan, although costly, are also available. Under the EPA Anti-Theft Bond, the EPA can grant the release of the bond for up to $10,000 USD, if regional EPA officials provide certification that the vehicle is registered for normal road use and bears a label of compliance.
Importers of Japanese cars often decide to insure their car against a number of risks that may arise while the vehicle is with the shipping agency and while shipping Japan to California. Helpful tips can help you budget wisely and avoid common pitfalls involved in the process of transporting a vehicle from Japan to the U.S.
Import Duties and Taxes for Japanese Cars
When importing a car from Japan, it is crucial that you understand the customs duties, tariffs, and other taxes that will be applicable to your purchase. Understanding these can help avoid unexpected fees, fines, or penalties. When your Japanese vehicle arrives in the United States, it will be sent to a customs office that is authorized by the U.S. Department of Homeland Security. At that point, your vehicle will be inspected to ensure that it complies with both U.S. and Japan regulations. If it is determined that all is in order, your shipment will be released to you and should be delivered within 30 days. At this time, you will be required to pay applicable import duties and tariffs as well as any other customs fees. This is also when you will be required to complete all necessary paperwork to ensure importation of your vehicle is documented properly. In general, the amount of customs duty that you must pay on Japanese vehicle imports is equal to 2.5 percent of the value of your vehicle, plus 23.5 cents per cubic centimeter of engine displacement. Note that this value should equal the invoice amount. There may be exemptions available to you, depending on the nature of the vehicle and its intended use, but these will vary on a case-by-case basis. You will also need to pay an excise tax equal to 10 percent of the value of the vehicle if it has a seating capacity of not more than 12 persons and an auto parts tax of 3 percent if it does not qualify for the excise tax exemption. It is important that you recognize the differences in these fees, and that you understand the importance of complying with all laws and regulations. Failing to do so could result in your vehicle being held up at customs indefinitely or getting sent back to Japan.
Japanese Car Import Problems and Solutions
Language Barriers: One of the most notable obstacles for automotive importers in Japan is the potential for miscommunication. All official documentation regarding shipping, customs duties, and vehicle registration is handled in Japanese, which creates a barrier that can lead to major delays and fines if not addressed properly. The most effective way to overcome this hurdle is to work with a car importer or an auto import specialist. They understand the automotive import laws inside and out, and can deal with everything in English, alleviating this concern.
Shipping Issues: There are an abundance of shipping companies available that will manage the transportation issues related to Japanese car imports. However, some of them are less than reputable, and may attempt to scam their clients, even international businesses . Always make sure that you verify the trustworthiness of the carrier, and be wary of any that ask for an unusually high deposit to begin the service.
It shouldn’t be difficult to find an honest, hard-working shipping company, but always verify that they have a presence in your country, as well as Japan, to guarantee that they provide full service. Once you’ve found a good shipping company, they will be able to offer you advice on how to get a vehicle from Japan to your home country.
Customs and Import Policies: A car importer knows everything about the policies, tariffs, and laws regulating the automotive industry in Japan. You must be prepared for any hiccup along the way by obtaining all of the relevant information and working with a qualified auto import specialist who knows how to get it done right.
Why Consider Importing Japanese Cars
When it comes to price, one can save a lot of money. The average car in Japan is about $15,000 to $30,000 however depending on the maker and model it can be even more. In the US, because of tariffs, taxes, transport, and more, that $15,000 car could sell at $35,000 or more. That 2x premium, depending on your state’s taxes, can be huge. Japanese vehicles are, by design, high quality cars, trucks and SUVs. Entry into the Japanese Domestic Market (i.e., JDM) is very competitive, with small and large automakers alike having to produce a high quality vehicle. With the strict inspections, testing, design, and engineering required to get a JDM vehicle out of the JDM, it creates an environment that is high quality will lower INR (that is Japan’s equivalent to the NHTSA). Most cars that are older than 25 years old requires certain changes to meet DOT’s (the U.S.’s) standards. These changes could be as simple as turning the headlights around or even more complicated, such as wider tires. One of the advantages is the fact that many of these particular changes can be done in Japan and not have to be done once the vehicle arrives in the U.S. Japanese vehicle manufactures have often been known to be ones that make some of the best vehicles available. Cars like the Nissan GTR or the Toyota Land Cruiser. And then of course there is the Nissan Skyline but that is more for show.
Japanese Car Import with a Broker
Many people find it easier, quicker and more economical to hire a broker to help them through the process of importing a car from Japan. Using a broker isn’t required, but it can be very helpful. In fact, some people never once lay eyes on the car that they are importing; all they do is pick the car off of the site, approve the purchase with payment, and the broker does the rest.
The first thing you want to do if you think you want to hire a broker is check them out with the Better Business Bureau. Look for reported complaints or unaddressed or unsatisfactory complaints. Investigate any things that look fishy. Are they still in business? Are they well established?
Ask about their fee schedule and find out when exactly you’ll owe them money and how they want to be paid. Cash is not usually a good idea, for obvious reasons, but some brokers will take a check or debit, so that’s another option. Be sure you understand what the fees are for and when they are expected to be paid.
If you plan to pick the car up yourself, find out if they can get you a bond good for the time period from when the car arrives to when you pick it up. The bond must be for $2000—this is the money the customs department needs to collect taxes and duty.
Beware of brokers who offer you new cars or cars that have been imported over seas. A company that offers a new or nearly new car overseas may not be operating above board—there is a lot of room for scams in this line of work.
Legal Aspects of Japanese Car Import and Mistakes to Avoid
When importing a vehicle from Japan, it is essential to ensure that all documents are authentic and that the car meets all legal requirements of your home country. Unfortunately, unscrupulous dealers sometimes create fake documents or sell you a car that does not conform to your country’s regulations and then disappear with your money. Even if you are careful, you may still run into some problems. In this section, we will provide you with tips on how to do your due diligence and the steps you should take to avoid legal pitfalls.
First, make sure the VIN number of the car matches the VIN number on its documents. If it is not, there are two possibilities: 1) You have a stolen car and are now the rightful owner of a repo, or get ready to be questioned for the next year. 2) An attempt was made by the dealer to sell you a different vehicle using an altered VIN number. Just walk away if the VIN does not match up.
If the VIN matches and the car clears customs, don’t let the matter rest there. Check it again. If something has gone wrong, it is better to know sooner. There are many reasons why your car could fail an inspection—none of them good for you.
Another common scam is where the dealer provides you with what he claims is a Japanese inspection certificate, which turns out to be fake. Even if you are convinced that it is authentic, it is best to double-check with your own government . In Japan, all vehicles are certified to comply with very specific technical regulations. The amount of emissions a car can produce is heavily restricted, and the maximally allowable noise levels are also well defined. It isn’t that way everywhere in the world and proving that a vehicle complies with local laws can be a huge headache. No one wants a vehicle that can’t be driven legally.
Speaking of paperwork, always make sure the dealer gives you the customs receipts. This is very important. They will usually provide you with a tracking number when shipping the vehicle. Use this number to follow the shipment carefully. Keep in mind that customs receipts are not the same as bills of lading. Bills of lading are electronic contracts and are issued by the shipping company, not the dealer. Once you have verified that the shipment has been cleared by customs, you can use the receipt to claim your vehicle.
Unless you are buying a vehicle as investment property, you probably intend to buy something that works. Or, at the very least, is capable of being repaired for a reasonable amount of money and time. If you know all this, why would you continue to deal with a company that admits to selling a lemon? If your car arrives with problems that were previously known by the dealer, you should immediately contact them and demand a solving of the problem. Try using the polite tone of voice during this conversation. The law is on your side – unless you want to give it up.