I understand that grey imports are cars directly imported from Japan? How to do it? What kind of taxes have to be paid/papers filled?
The term Grey Imports can refer to pretty much anything that is imported to take advantage of a significant international cost differential.
The importer is liable for the full range of import duties, taxes, levies and restrictions etc, but in many cases, these still don’t drive the cost up above the cost of locally available equivalent items.
Thanks! I am only interested in cars.
Is it actually cheaper to import a car in the UK? I know for a fact that this is not the case in Greece, except for cars like RX-8, 350Z and S2000, which cost 75%-100% more than in the rest of Europe.
Well I can give you a personal anecdote. I was looking to buy a VW Beetle 4 years ago. At the time my local dealer said the waiting list was about 8 months, so I decided to look into importing. I found the number of a few importers in a magazine or newspaper (it might have been Autotrader or the Sunday Telegraph). I contacted them and narrowed it down to the one who sounded the most professional. He said he could get me any spec. Beetle I wanted (my requirement was standard UK version including RHD) within two months, sourced from Germany. Great! So I went ahead. His fee for sorting everything was about £500. At the end of the deal I got my car and I ended up paying in total about £2500 less than if I had bought it in the UK. The only downside was I got the standard European 1 year guarantee instead of the UK 3 year version. I was happy with that given the cost differential.
I believe that price cuts in the UK, combined with exchange rate movements might make importing a bit less attractive today.
My brother lives in the UK and recently bought a Honda CRV (boo etc.). He did something strange where the jeep, manufactured in the UK (Swindon?), was shipped to Cyprus and immediately re-imported for him. I’m a bit fuzzy on the details but I presume this enabled him to get the vehicle at the list price in Cyprus (and Cyprus VAT rates?)and even with the import duty it worked out cheaper. I think it saved him about £3,000 but he lost his manufacturer’s warranty. A bit of a risk but overall a good deal.
I hadn’t seen InvidiousCourgette’s post before I posted - same sort of deal by the look of it, albeit without the export and immediate import lunacy.
Factory warranties are just 1 or 2 years (depends on the manufacturer). Coverage for the extra years is offered through some insurance company. This cost is added to the car’s price. But I don’t think the extra coverage would cost £2500 (maybe in the region of £500-£1000?) , so I guess it was a good deal.
When I returned from Tokyo at the beginning of last year I shipped back a Boxster S I had there. I’d bought it nearly new at roughly 35% less than a similar car would have cost in the UK. My company picked up the shipping bill too, which was pretty hefty (ca. GBP 3k). This service included door-to-door delivery, draining the engine for transport, all the necessary paper work at both ends, checks, emissions testing, and adjustments (like headlights) to make it comply with EU standards, number plates, road tax, etc. All good so far…
The service didn’t include (mandatory) replacing the entire speedo binnacle (GBP 1.3k) to get an MPH display or a UK compatible satnav system (GBP 1.9k). If I had wanted to pick up more than one or two radio stations, that would have meant a new sound system (GBP didn’t ask). Pretty expensive but at this point I’m still up on the deal.
Service was no problem at a local Porsche dealership but they informed me that there would most likely be problems if I wanted to claim anything on the warranty.
The problem came when selling the car. Having waited the required 1 year to avoid VAT (personal imports are exempt if you keep the car for 12 months), I wanted to sell it on and get a new car. Well, take a look at the prices in the car ads and subtract 30-40%, IF you can find a buyer. The Porsche dealerships I called would not even return my calls until I lied about my interest and even then not only did they refuse to discuss buying the car, they would not even give me an estimated value. I was put on to two specialist dealerships, basically handling ‘exotic’ cars, who said they would be prepared to buy my car. Sadly at a price that I couldn’t see the point in selling. One offered to take it on a sale or return basis.
In the end I sold it at a very low price to a friend (would rather give it to them than a dealer) who intends to keep it for a long time and so isn’t too worried about resale.
In retrospect, I would only consider importing again (from Japan, Europe may be a different story) if it was a car that I would be keeping - that’s the only way I see you can realise the value of any purchase price difference.
By the way, you might want to brush up on your Kanji, Katakana and Hiragana as all relevant paper work and manuals, etc. are of course in Japanese…
Somnambulist, what about the 180km/h speed limiter? Did you remove that?
That is a good point. It did occur to me when buying my car that any resale value might be lower because it was an import. Too offset this as much as possible I went for the full UK specification (all the manual were in English: they must have been used to dealing with UK importers). Nonetheless, the deal would have looked less attractive than it did if I had have been anticipating a short ownership.
If it ever had one installed it was removed by the time I bought it (it had about 1500miles on the clock). I know that for certain because I was pulled over doing around 200kmh rushing to Narita airport (the policeman very kindly let me off without a ticket).
I think 2 or 3 years ago there was a lot of demand for importing cars from Continental Europe into the UK. If I remember rightly, Denmark was one of the easiest places to arrange this, and as you say, you could order your cars to full UK specification.
I think now that Sterling has depreciated a fair bit from the highs against the Euro, along with a great deal of pressure on UK car dealer margins, the potential savings from importing have all but eroded. It might still be a way of getting around the waiting lists though. I live in Germany now so no problem there for me!
The good old dealer resale valuation is just a way for UK distributors to try and keep their virtual monopoly operating.
Traditionally UK car sales have been massively overpriced, at least 30-40% and this has been partly, substantially due to the way the rules on tax breaks operated on company cars.
Lately the EU has been asked to look at this issue in the high courts and decided that this was against EU rules on free movement of goods and services, the result is that prices tried to remain high, but it became increasingly easy to ireimport cars that were made to UK specification in the UK, send them to the continent, and bring them back in again.
These are grey market vehicles, but there are other forms of greys too.
At first the manufacturers tried to restrict the sales of cars in UK specification being sold to European dealers, since they could only be for reimport back to the UK,
but the courts crushed this,
so they tried the same thing by having very long wait times,
the courts crushed this too,
and then they tried to say that they would not honour manufacturer warranties,
but this too has been crushed… as EU rules state that all items sold within the EU must be fit for the purpose for which they are sold, and this rule is interpreted to mean that vehicles and other complex merchandise can be reasonably expected to have manufacturing faults which may show up some time after purchase and thus were not fit for their intended purpose.
The latest trick is to try ensure that the resale value of grey vehicles is very low, to try put people off buying them, but this only works on relativley expensive vehicles as the resale value of cheap cars is very low and the market purchasing them does not operate according to the rules the manufacurer would like to force.
There is one get out that they have tried, they tried saying that cars for export were not built to UK specs, such as emissions, safety etc, which had to be complete fabrication, but when it comes to Japanese vehicles manufactured for that market, they do have a point, the Japanese standards are usually much higher than our own !
Greys for models that were never originally sold in the UK are differant, and problematic, as they either have right hand drive, or spares backup is poor.
Bikes have been the main beneficiary of the grey import boom, since they are neither left nor right hand drive, a change of headlight lens and a speedo overlay are all that’s needed, the result is that bike prices, especially used ones, have fallen and stayed steady for the past few years.
There has been a certain amount of connivance from manufacturers, where too many are ordered for a particular market, for example Germany, and the surplus is moved to the UK at discounted rates, the manufacturer is often fully aware, indeed might even be particiapting, but still they will complain about greys.
Thanks, casdave, very informative!
Grey import owner in the UK here: well, you need to pass an SVA (Single Vehicle Approval) test; if the car is more than 3 years old, you’ll need an MOT too. My car (Mitsi FTO) was designed & built for Japan; even so, all it needed was a speedo conversion (KPH to MPH) and a rear fog light fitted. The Japanese also have speed restricters (something like 105mph) on their cars, it’s an easy job to get a mechanic to remove this.
Apparently mileage clocking is pretty endemic in the Japanese market too; not much you can do about it though, but just to warn you.
You also want to check that your insurance co is cool about a grey, or that you can find another one that is.
Oh, and very important: if you buy a Japanese import for the UK, get it undersealed. The Japanese don’t underseal their cars since they don’t put salt on their roads.
Depending on the car you’re looking for, you may find there’s a nice UK-based company with a bloke in Japan who’ll scour the auctions there looking for your spec of car, & will buy, ship and deliver it to you for a percentage. E.g. I looked at this option with a company called Newera when I was buying.
Also, I agree with Somnambulist: I fully realise that if I tried to trade in my wee bit of Japanese exotica, I’d likely get insulting offers. So I’ll hold onto it till it dies, or sell it privately.