Importing

Healey Journal

Why Import?

Importing an Austin Healey may seem a drastic step but it was the most effective approach for my obtaining one. Something like 90% of the Austin Healeys ever made were exported, most to the USA. Those left in the UK are already held by appreciative owners, or people willing to relieve potentially appreciative owners of disproportionate sums of cash. A little investigation soon revealed that there were far more Healeys available in the US, and that they were available at prices rather lower than similar project cars here in the UK. It appeared that I could source a car from the US and bring it into the UK and that if the car were found to be un-useable that I could recover most, if not all its cost from selling it piecemeal for parts. It wasn't risk-free by any means, but the risks were acceptable and the cost savings attractive.

First Caveat: When I look back at my purchase I shudder at my naivety. Not so much about the car (though honestly there was a little bit there too) but at my blithe expectation that all would go well, and cheaply. That it did so was more due to good luck than any sensible behavior on my part. The potential difficulties could have been:

1. I assumed that the car could be shipped at a reasonable cost. Remarkably enough, this was correct. But if the car had been located somewhere more distant than the east coast of the US I might have been in for more of a shock- particularly if cross-country trucking had been involved. The costs were about what I'd thought that they should be, having previously shipped household goods from the US to the UK previously, and priced car transport then (for my MGB). But things could have gone very differently. (I SHOULD have prepared beforehand by asking shipping agents the rough cost of transporting cars from their origin, and budgeted accordingly for all costs.)
2. I assumed that I could import a car without any special license or other a priori clearance from the government. In this I was correct, but again only due to dumb luck. (I SHOULD have asked the DVLA and HM Customs and Excise about import licenses beforehand, then I'd have known I was in the clear. Had a license been required I could have incurred storage charges while one was being issued- or I might have had to return the car to the vendor, or re-sell it at a loss if a license had been denied.)
3. I also assumed that I could import the car without facing any significant tax obligations- after all it was BUILT in the UK, why shouldn't it return here free? In this I could have been severely disappointed, but an exemption scheme was available (IMPORTANT NOTE: that policy has changed! See Update) and easily used. This was not just dumb luck but entirely unwarranted good fortune. (I SHOULD have checked all this out first, and if I were to do it again I certainly would do so- checking that a particular model & year qualified before then committing to a purchase- again, I could have been stuck returning it to the vendor or trying to resell it if the taxes had been extortionate.)

The decision was driven by the relative cost differentials seen between the UK and the USA.  At the time, I could buy a US Healey and import it more cheaply than an equivalent UK one- and the difference was large enough to make the whole exercise an economically viable proposition. And those financial incentives are increasing:

An Economic  Disquisition on the Effects of Recent Exchange Rate Movements on the International Market in Healeys

International  price differentials have been improving and it is now more attractive to import cars into the UK from the USA than it has been for the past few years. Consider a Healey priced at $10,000- when I bought my Healey the exchange rate was roughly $1.50:£1.00, so had I bought at that time the $10,000 car would have cost me £6,600. If I'd waited until the present time (2004), when the exchange rate is now roughly $1.80:£1.00 a $10,000 car would only cost £5,500. A savings of roughly £1100- about 17%. From a financial perspective the importation of Healeys is becoming more attractive than it has been previously.

Conversely, the fall in the international value of the dollar will make those Americans importing parts from elsewhere find them more expensive.  If Healeys from the US are now 17% cheaper than two years ago it surely follows that parts sold from the UK into the US are now 17% more expensive than before. This excludes any consideration of price inflation too- so parts may cost nearly 20% more than before.  Ouch.

Second Caveat: Consult a currency speculation specialist before acting on any ideas seen here. They are very familiar with losing millions of dollars in seconds from exchange rate fluctuations and will sensibly disabuse you of any notions of profiting from using Healeys as a form of exploiting international variations in their valuation. Remember, you get what you pay for, and nothing I've said has cost you a penny. Its value is thus self-evident.

Shipping

Bringing a car into the country was an exercise that I expected to be an onerous task. In reality it was easy: the freight forwarding people handled all the real work and details, and it ran very smoothly.

The seller had previously exported cars to the UK and put me in touch with the shipping agent he'd used. I e-mailed them and followed up with phone calls. A few minutes conversation greatly facilitated matters and the agents were engaged to pick up the car in Connecticut, transport it to their facilities in New Jersey, hold it there for consolidation into a single container load, and deal with the US export controls and produce the necessary documentation for the UK. They handled all this very competently and efficiently. The distance and international aspect didn't seem to matter in the slightest. Their fees were money very well spent.

Costs

Importing a car was attractive because of the price differentials between the US and the UK. However those would be reduced by transport costs, and by UK taxes.

The transport costs were roughly $1200 (£850- at then prevailing exchange rates) from the vendor through a New Jersey port to Folkestone. The UK based agent's fees for unloading, temporary storage and handling the customs clearance and paying the necessary taxes were about £300 ($420) in total. Altogether the cost of importing the car inclusive of all shipping, handling, documentation and taxes was roughly £1200 ($1700) in early 2002. Had the car been more valuable the taxes would have been higher, and the costs correspondingly greater.

The import taxes were a critical economic dimension: they could be nearly 30% on the purchase price, or "fair" value of the car. The section on Customs and Excise discusses the handling of that. 

Companies I've used successfully:

Pembroke Marine Services, Linden, New Jersey. Shipped my car.

Californian Connections, Ramona, California & Cromford, England. Shipped bulky components from California.

Customs & Excise

NOTE: The information given below now (late 2004) appears to have been superceded by a change in Customs & Excise policy. It seems that when I imported my car that virtually all such older vehicles were routinely given the exemption as being "historic". It now appears that the policy has been tightened and that only those with some unusual or remarkable historical feature or association are now considered to satisfy that requirement. Thus, an ordinary car such as mine would not now apparently have been granted the exemption.

Nevertheless, an enquiry may be useful- policies change, perhaps even back to the "good old days" as I found them:

The customs duties and tax liabilities were potentially so great that the project could be priced out of existence. But I'd been told that taxes paid on other imported Healeys were greatly reduced by first asking Customs and Excise to treat it as a "car of historic interest". I did so as described below, and the car was exempted from VAT (17.5%) and the import duty charged was only half (5%) the usual. I saved roughly £1200 ($1800) at the time.

The key was to apply for a binding tariff information. This would allow a lower rate of import duty, and would exempt the car from VAT. My understanding (and it could be wrong) is that I as a private buyer could obtain this exemption but that businesses trading in the importation and sale of such vehicles could not. I may be wrong, but I was very pleased to have the "relief" given.

Registration

This remains to be done, and the page will be updated in due course.

In the UK the issuance of a title and the registration of a car depends on having one that operates. I will need to:

1. complete rebuilding the car,
2. get it insured (interestingly enough I insure the car now, this protects it as an asset from fire, theft, etc. and although the insurance is for operating cars it won't be valid for mine until the car is fully legal- inspected and registered, and only then can I drive it within the policy restrictions.)
3. subject it to the standard Ministry of Transport (MoT) vehicle inspection,
4. then present:
5. that inspection certificate (need)
6. The insurance certificate (already have)
7. the importation documentation (already have: US Title Transfer and Bill of Sale)
8. tax receipts from Customs and Excise (already have)
9. the Driver and Vehicle Licensing Authority own registration request form (need)
10. and the inevitable amount of cash.

in order to have a registration document issued and obtain a registration number for a license plate.

The DVLA web site:   http://www.dvla.gov.uk

The MoT web site:   MoT General Information

All this remains to be done... at an indeterminant point in the more-or-less distant future.

As they say ... the job isn't done until the paperwork is finished....

Instructions from the DVLA

"You have to pay a fee of £25 on the first registration and licensing of a motor vehicle in the UK. The fee is designed to cover the administrative costs associated with registration of the vehicle throughout its life. The fee is applicable to all vehicles except those first registered and licensed in the 'Disabled Exempt' taxation class."

"If you have paid duty and tax ((b) (ii) above), you will need to send our Customs Form C & E 386 with your application."

"You should be ready to give full details of your vehicle to our officer who examines it. These should include as far as possible:

General information from the DVLA about importing cars may be obtained from:   http://www.dvla.gov.uk/vehicles/exptimpt.htm

"A vehicle which is permanently imported for use in Great Britain must be registered and licensed as soon as possible after it arrives in this country. The vehicle should not be used or kept on public roads until the licensing and registration formalities have been completed. However, if the vehicle needs to have an SVA (see section A "Type Approval" ) or MOT test in order to be registered, the vehicle may be driven to and from the pre-arranged test appointment. Thereafter, the vehicle must be kept off the road until the registration formalities have taken place. Application for registration should be made to your nearest DVLA Local Office. N.B It is not possible to offer an 'over the counter service' registration usually takes between 48 to 72 hours."

"N.B. UK law requires a vehicle to be UK licensed and registered for road use. To avoid difficulties, importers are advised to transport, rather than drive their vehicles from the port to home or first destination and to keep them off the road until they have been properly licensed and registered."

"The following documents will need to be submitted to the DVLA Local Office.  (N.B. photocopies are NOT acceptable).

·                Completed application form V55/4* (for new vehicles) or V55/5 (for used Vehicles).

·                A £38 registration fee (if applicable).

·                The required fee for the licence.

·                A current British certificate of insurance.

·                Foreign registration document and any other papers you have relating to the vehicle.

·                Evidence showing the date the vehicle was collected (normally the invoice from the supplier).

·                Evidence of type approval.

·                The appropriate Customs and Excise form.

·                A current British MOT test certificate (if applicable).

·                A Declaration of Newness (if applicable).

·                Documentation confirming your name and address"

"Registration and licensing will not take place unless you have the necessary documentation. In some cases the DVLA Local Office may wish to see the vehicle to check its identity."

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Copyright© 2004 James  M. Wilson All rights reserved.