Japanese import cars have gained popularity due to their low price, fuel efficiency, ease of maintenance and durability. Toyota is now the biggest car manufacturer in the world and has built a reputation as a maker of reliable, user friendly cars. New import car models have evolved in terms of appearance and performance and are now considered worthy of ranking next to marquee car models available in the market.
What is Duty?
Combined with shipping costs, customs, sales tax and any Japanese export tax, it can be quite costly to bring vehicles into the U.S. from Japan. Japanese auto makers are required to pay these duties on all vehicles they sell in the United States.
Import duty is best defined as a tax on any goods that are imported into the country. In the U.S. these rates are determined through the use of the Harmonized Tariff System (HTS), a book roughly the size of a large unabridged dictionary. Each product is analyzed and scrutinized to determine where the parts and construction come from to establish how much duty is required on the product in question.
Importing to the U.S. from Japan
Cars imported into the U.S. are assigned a fixed duty rate of 2.5 percent. Trucks have a 25 percent duty rate and motorcycles are either free, or carry a 2.4 percent duty rate, depending on the bike in question. These rates apply to all foreign made vehicles arriving in the U.S. (for either sale or personal use). Duty rates are based on the price payable, meaning if you purchased several vehicles for a reduced rate to sell in the U.S. but sell them for more, you will pay the duty on the higher potential rate. This typically applies to cars brought into the U.S. to be re-sold through dealerships. If the vehicle has a gas mileage rating of less than 22.5 miles per gallon, you will have to pay a gas guzzler tax.
Duty rates are determined by taking the cost of the vehicle (what you paid for it) plus the cost of shipping and then adding the rate. This cost must be paid at the time the vehicle is picked up. Under no circumstances will a car be allowed off the docks without the duty rate being paid.
Returning U.S. residents can apply for a $400 customs exemption in cases in which your vehicle will accompany you on your return, or if the car was imported for your personal use and was acquired during the journey from which you are returning. These situations almost exclusively apply to students studying abroad, or people working out of the country.
For Additional Information
More information about importing products or duty rates, consult the U.S. Customs and Border Patrol (CBP) website. You can also call your local CBP port with any specific questions or to get a detailed report on a specific vehicle you wish to import into the United States.
How Do I Buy Import Cars Directly from Japan?
You can certainly import cars from Japan. Before you consider doing so, you need to be aware of the laws that govern cars being brought in from other countries.
- Pay the import duty. When you import a vehicle you need a bill of sale, as this will allow import duty to be levied.
- Clean the undercarriage. The undercarriage of Japanese import cars have to be thoroughly cleaned before entry, to ensure no foreign soil or pests come into the country accidentally.
- Obtain documentation. When you import cars from Japan you obviously need the proper documentation. This includes the bill of sale (required for Customs clearance), the bill of lading and the Japanese registration of the vehicle. Additionally, the Department of Transportation needs form HS-7 and the EPA requires form 3530-1 to show that the vehicle meets US emissions standards. There must be a manufacturer's label that states this, in English, in the driver's side door, or good written documentation. You also need to have the correct tags on the import car in order to drive it. This might require specific documentation for the DMV in your state, so you will need to check with them to obtain the details.
Where Else Can I Buy Japanese Imports?
If you are not personally importing a car, but you want to buy a Japanese import car, there are other options.
- Visit import car dealerships. Most import Japanese car models are sold at import car dealerships with every manufacturer made available to almost any city or state. Brands like Honda, Nissan, Mitsubishi and Subaru provide showrooms that highlight the top models which have become synonymous with the brand.
- Try the gray market. Some models are not officially available on the US market. These models are attainable at gray market dealers (that offer no official dealer warranty) or through personal imports alone.
- Visit used car lots. Japanese import cars are also available at quality used car lots. Much coveted models such as the RB26 Skyline, Mazda RX-7 and Mitsubishi GTO are available at high end used import car lots. Bring a knowledgeable mechanic when shopping for used import cars to get the most out of your hard earned cash.
- Research online auctions and ads. The Internet is a good and reliable source of new, used and restored import cars available in the market. This method is preferred by some car buyers, as it provides convenience and insight to the potential purchase. It also makes car comparison easy. Remember to talk or chat with the owner or dealer before going in for a test drive. When buying used imports, do appropriate research about the model you are planning to purchase to get a better assessment of the used vehicles overall condition.
What Could Go Wrong?
Although it would be great to say that nothing could ever go wrong when importing a vehicle, this is not the case and it is important that you do your research before you part with any cash. To minimize the possibility of anything happening, make sure that you choose a Japanese car exporter and shipping agent who are reputable and trustworthy. Check up on any exporters to see if they belong to a trade association. Don't take their word for it--go one step further and confirm with the trade association's website that the exporter is listed.
To protect yourself further you can pay for your vehicle by credit card. Although this may limit the number of exporters you can use, it will provide you with financial security should anything go wrong (although you should check with your credit card company first).