Analysing Risk in New Zealand Importing: Loves a Japanese car crazily, or admirer of vintage and classic cars but unfortunately not being able to own them just because they are not available in your country New Zealand. At that time you have only one option to include them in your car collections and that is importing them from Japan to New Zealand. Yes!! Importing your favorite car is the way you quench your dream to drive them on your country road. Getting excited is a very phenomenal but wait importing also involves some risks which you have to analyse and be alert and prepare yourself against them before you import your car from Japan. This will make your experience and joy of having your desired car at your home more wonderful and happy.
So let’s make you aware about:
- Risks involved in importing
- What costly mistakes you can made
- Is it worthy privately importing a car
- Some tips before you import
What are the Risks involved in importing used car from Japan to New Zealand?
1. Customs Laws:
As we all know the New Zealand government has very strict rules and regulations on importing used cars, it is very particular about which cars car and cannot be brought into the New Zealand.
There is a list of car types which can be imported in New Zealand, other than those cars you are not allowed to import any car in any condition. So before deciding your car kindly, vary it with the list and make sure that car legally permitted for import, if not then drop the idea otherwise, you may trap yourself in some legal issues.
- Kei-class vehicles made before 2000 cannot be imported.
- Cars manufactured before 1990 can be imported with less restrictions.
- In most cases, vehicles that are LHD must be converted to RHD.
- A car may need modification to be approved. e.g. proper lights.
- Cars built after 1999 must have Fuel Consumption Data.
For making you more informative you can visit New Zealand Customs website for a list of prohibited and restricted goods. You may need to get approval from the Ministry for Primary Industries, which deals with bio-security concerns. Don’t ignore or skip this process as it is mandatory for every car going to be imported.
2. Financial Risk:
If you are happy that you crack a reasonable deal for your desired used car and you have to pay only the cost of your vehicle and shipping charges and prepared you budget according to that, than don’t live in illusion because you may get shocked to know and your budget going to be disbalanced after knowing that there are more costs included with importing into NZ than just the costs of car and shipping.
You may be surprised by just how much it will cost you to get your vehicle through Customs when they arrive or it may be possible you have to add a good some amount in your budget or it may cost you out of your estimated or affordable budget. Apart from the obvious costs of shipping, you should also consider and prepare yourself for paying the costs of:
You have to pay the charges for your car storage till it gets clearance and get free from the custom. It depends on types of your vehicle and number of days it stays on port, delaying costs you more because they will impose you with heavy fines and plenties.
Might not be aware of it, but much of today’s shipping law is still based on ancient maritime law. One of these laws relates to the concept of “general average”. If a vessel transporting your damage is lost or damaged at sea, or it must be thrown overboard to save the ship, you’ll be partially responsible for the cost – whether your goods have been lost or not. And that cost could potentially run to millions of dollars. So you must consider the things related to this and prepare yourself if this scenario occurs.
Customs Clearance Costs:
This payment is made against Ministry for Primary Industries (MPI) which includes following charges :
- Permits Charges
- Testing and Sampling Costs
- Laboratory Analysis
- Cleaning and Treating
- Travel costs for MPI inspectors
- Inspections of your vehicle
- Destruction, transportation, re-shipment, or other disposal of goods
- Storage and quarantine of goods
Analysing Risk in New Zealand Importing: Many of people think that if you purchased goods online from Japan websites for less than NZ$ 400 so you don’t have to pay duty, GST, or Charges but it is a misconception. This ‘rule of thumb’ does not apply to goods that attract both duty and GST, such as clothing, shoes, and accessories. Customs charges maybe payable when the value of these goods exceeds approximately NZ$225 as also applies in case of cars.
You have to pay import duty as well along with GST and it depends upon type of vehicle you are importing.
- Import duties apply to the value of your items. This is normally the price you paid, or will pay. Secondhand goods are also covered by this rule.
- The duties we charge depend on:
- The type of item
- The country it was made in
- The country it was sent from
- The duty rate – contained in the Working Tariff Document of New Zealand
- Applicable Customs concessions.
Analysing Risk in New Zealand Importing: You might also need to consider the cost of finance, and specialist services like Customs Brokers and Freight Forwarders. An experienced Customs Broker who can help you calculate what it will cost to bring your goods into NZ, so you can decide whether there is sufficient return on investment to make it viable for you.
3. Exchange Rate Fluctuations:
Purchasing your goods in another currency, is sometimes become very risky and you may have to bear some heavy losses because of the fluctuations in the exchange rate which can quickly turn a good deal in a bitter experience.
You can reduce this risk by asking your supplier to quote in New Zealand Dollars instead. Or you can buy a ‘forward contract’ from your forex broker, for securing the current exchange for an amount you agree at the time of deal. The other option be prepared and add an exchange rate risk to your estimated budget and carry and bear the risk yourself.
4. Cash Flow Concern:
Instead of paying in full on delivery, ask for a time payment. Update yourself with Methods of Payment: Terms, Conditions and Alternative Financing Sources for more ideas. Importing is particularly cash flow intensive for two key reasons – economies of scale make it more efficient to place large orders, and long delivery times mean working capital can be tied up for many months.
5. Quality Control & Returns:
Analysing Risk in New Zealand Importing: You are in New Zealand and your supplier is in Japan which is a greater distance along with that there is language and cultural differences. This can make it much issues to deal with quality control, or to return defective or faulty vehicles, If you’re working on a fixed timeline to get your imported goods to market, then no matter what you wanted or not but unwillingly you have to accept sub-standard goods because you can’t source a replacement in time. Make sure you hire reputed suppliers, and ensure your terms cover you for non-delivery, late delivery or inferior goods. It will be well and good having back-up suppliers and shipping insurance in place will also help to minimise the risks.
6. Trading Terms:
Get yourself introduce with trading terms developed by the International Chamber of Commerce called Incoterms which is used worldwide. It will be helpful for you to understand these. And make sure you’re buying on terms that work for you before you place your order.
These are some major risks, you can face while importing your car from Japan, but if you will understand these risks and ways of prevention and prepare yourself against them, it will be great advantage for you. So just be prepared.