In this week's update, I answer the question:
What did I have to do to get the car here? It makes for better reading if I first answer the question. Why did I buy a RHD car in Japan and pay to ship it back to North America? Was it worth the hassle? You decide.. Read on..
I decided that I wanted a Cultus for 2
main reasons:(1) I wanted a well-optioned factory built Swift. For me, a fully-loaded North American Swift trim was pretty basic.
(2) I was curious about the relative quality of a JDM Swift/Cultus. Were they better, worse, or built to the same standard as exported Swifts sold in North America?
Step 1: Research
Owning a car in urban Japan means dealing with high gas prices, expensive periodic government inspections and maintenance requirements, congested streets and limited parking.
After a car is 3 years old, a car is subject to a rigorous inspection process called [Shaken]. Then, after 5 years, this process must be done every 2 years, regardless of actual wear or condition of the car. After 13 years, additional inspections are required. High mechanical shop repair labor charges make owning an older car less attractive than buying a new one.
A minority of car owners keep their cars much longer, especially if they can perform their own maintenance - this group made it
possible for me to find an older Cultus for sale.
Learn about [Shaken]:
LINK Shaken - Japan car inspection processhttp://japan.angloinfo.com/transport/vehicle-ownership/vehicle-roadworthiness/
Now that early MK2 Cultuses are 25 years old, the biggest challenge for me was to actually find a decent one that was still on the
road in Japan, and available to buy. The last 3-door RHD MK2/3 style Cultus 4 cylinder hatch was manufactured in August 1998. From
1998-2000, the Cultus name was carried on in the form of a 3 door RHD Esteem hatchback. Finding a good one from this era would be
like finding a unicorn.
I had a choice between working with a North American car dealer to import/broker a used car from Japan, or to buy directly from a
Japanese car dealer, agent, or auction house. I learned that desireable cars to import to North America from Japan were mostly
high-end luxury/sport cars, 4X4 SUVs and vans.
Used JDM economy cars like the Cultus or mini-trucks are exported early, around 5 years of age to places where Japan does a lot of
trade, like New Zealand, Russia, Africa, or South America. By the time cars get to be 15-25 years old, used car choices are few.. the A MK2 Cultus is at least 4 generations old relative to the newest Suzuki Swift; importing a less than 15 year old Cultus variant from places like Pakistan or China would not be permitted by our federal government, as those cars were never designed or upgraded to meet modern safety and emission standards for North America.
I do not mention seeking a Cultus from a private car seller, because there are so few people that want to sell their cheap used car directly to a fellow citizen, much less a foreigner. For example, the Tokyo Craigslist today has exactly 7 Suzuki used cars or trucks that are at least 15 years old and therefore importable to Canada, and the oldest car in this group was a 1995 model, which means that none of these cars are old enough to import into USA under the 25-year federal safety standard exemption rule.
I decided that going through a local Vancouver dealer was going to be way too expensive. Why would a local dealer want to waste time to locate an economy car when they could make more money importing and reselling popular, but rare cars like a Nissan GTR? So, off I went to seek my own JDM Cultus, browsing public auction and dealer websites in Japan for several months until a Cultus listing popped up, in my case a local Japanese car dealer listing on tradecarview.comStep 2: Verifying condition of the car
One thing you notice after searching Japan car sites for a while is that stock photos are often used, and the actual car may be in far different condition. Even if the actual car is depicted in photos, the overall condition is hard to verify unless the seller is able to provide copies of maintenance or inspection records as well as high resolution photos of the underside of the car. I was pleasantly surprised to observe that any minor dings or scrapes are fully disclosed; dealers there appear to understand how picky buyers can be. When verifying body condition, one thing to note is that [rust] means [surface rust only], while [corrosion] means a [hole]. An ability to supply copies of regular Shaken reports will provide evidence of good mechanical condition.
Other objective facts about the car's condition are included in a 1 to 4 point Auction Grade Score. This number is almost always displayed during live car auctions, as well as shown within an individual car advertisement. I exchanged a series of emails to determine the condition of the car and then to negotiate price. I describe the meaning of the term [price] in this context, later in this post.
Thank goodness for Google Translate, and a reliance on simple, formal questions posed and answered in English, although there was
one awkward phone call when email went offline for the seller during a few days of the negotiation process. (The phone call went something like: Hello? Yes. Umm.. Hello? Thank you.. Hello? OK, I will send an email.)
The seller had to clean the car before shipping. Pictures of car on the hoist in Japan.
[Cleaned chassis photo: underside front]
[Cleaned chassis photo: underside rear]Step 3: Negotiation
The process of verifying car condition is done concurrently with price negotiation, which does not resemble the wild negotiations
done in a typical North American used car lot. This is because Japanese car dealers familiar with export, will advertise their cars using a fair market value, using an export-oriented FOB (Free on Board
) price. Sellers price used cars very competitively. Buyers that initiate contact with a seller are expected to quickly commit to buying the car, after verifying car condition and some minor price haggling.
If I agreed to pay a FOB price, my car would be simply delivered from the dealer's lot to the closest port that would ship to my location; the car would then be loaded (driven) onto the ship. To get the ship moving towards me would be at my cost, and at my risk. An alternative option I did not use was to ship a car in a shipping container, vs. driving it onto the ship, and driving it off at its destination, known as RO RO (Roll on, Roll off). For a small car like a Cultus, it only made economic sense to ship using RO RO method. A container would suit people importing a bigger more expensive car, or several vehicles and/or parts. It is definitely easier to import a car only, and to avoid problems with your import, it is not advisable that you do NOT put other things into the car, like engine parts.
Japanese car dealers are used to dealing with experienced buyers. It was up to me to know my maximum budget to pay to get this car, and have it cleaned, transported to the port, and then loaded onto a ship. If I was negotiating a FOB price, the ship would not go anywhere until I had arranged for shipping or agreed to pay the seller or someone else to help me with this task.
Since I never imported a car before from Japan, I decided to ask the seller to arrange freight, and marine insurance. So, instead of a FOB price, I negotiated a CIF price, which stands for Cost, Insurance and freight (to Vancouver). I would take possesion of the car after clearing customs. The insurance policy for me began at the moment the car was loaded onto the ship in Japan.Step 4: A few words about the 15 year (Canada) and 25 year (USA) age exemptionThis section in particular is just my strong opinion, so please read it with that perspective, and don't forget to do your own research about import rules for your own country and state, before deciding to proceed with an import from Japan.JDM cars:
Before you pay any money to the seller, your JDM car should be:
- at least 15 years old, for Canadians in Canada importing a car into Canada or,
- at least 25 years old for Americans in USA importing a car into USA.
Make sure that the car's age is determined starting from the exact month and year of its production date. In the US, 25 year old cars qualify for NHTSA's FMVSS exemption (National Highway Traffic and Safety Administration - Federal Motor Vehicle Safety Standards). For a better JDM import experience, anything newer may be [too new]!
If you ignore these age considerations and try to import a [too new] JDM car, it may be refused entry at the port; you may be required to re-export it immediately, or you may apply to be allowed to modify the car and perform tests to prove that it will comply with federal safety and emissions standards for the model year in question. This could be done as if YOU were the car manufacturer, and may be entirely at your expense; you may need to hire a registered importer company to make the car compliant within a limited amount of time. And, there is no guarantee that you will succeed.Non-JDM cars:
Canadians that want to import a newer, non-JDM car from USA, or Americans that want to import a newer non-JDM car from Canada may be able to import some less-than-25-year old cars, as long as the car was originally built to meet US and/or Canadian emission and safety standards, and is included in a government list of compliant cars.
Both the US and Canadian government agencies publish lists of US and Canadian specification vehicles that are eligible for cross-border importations. The link below is a recently updated US exemption list, for vehicles newer than 25 years old:
NHTSA (US) eligible cars list PDF filehttp://www.nhtsa.gov/cars/rules/import/elig120115.pdf
(Note that only Suzuki motorcycles appear on this list)
Note: There are quite a few USA Registered Importer companies listed in the document below; these companies are located in various
states. You could contact one to see if they can help you import a less than 25 year old car which is not listed on NHTSA's [exemption] list.
NHTSA Grey Market vehicles rules for importhttp://icsw.nhtsa.gov/cars/rules/import/graymarket_RI_list120413.pdf
The Canadian equivalent website is at:
Canada Registrar of Imported Vehicles - RIV FAQ page (importing a car)https://www.riv.ca/HelpFAQs.aspxStep 5: How to pay the seller
So, after agreeing on price, I needed an initial document which showed the essential terms of the purchase. This was called a Pro-forma Invoice. This document described my Cultus, its model and serial number, the CIF payment amount, as well as the seller's bank account details. I signed and faxed the Pro Forma Invoice back to the seller.
The seller indicated I had about 10 days to make payment by T/T (Telegraphic Transfer - a form of electronic payment between banks
popular in Japan. Some sellers may alternatively accept PayPal or credit cards.) I was responsible to pay some bank fees charged by the Japanese bank to handle the T/T payment as well as fees to my own bank. A seller may prefer to transact using Japanese Yen instead of Canadian or US dollar currency, so you may need to absorb some exchange rate commission charges from your bank. After the seller confirmed receipt of the funds, he prepared my car for shipping. This included a thorough cleaning of the chassis and body, and interior in order to comply with Canada's Agriculture dept. requirement to verify and inspect upon arrival that the car did not have any dirt attached to it which may contain pests.
Once the seller arranged a shipping schedule, and the car was delivered and loaded onto the vessel, a Commercial Invoice was emailed to me. That and other original documents were then sent by courier shortly after the ship departed. These included a Bill of Lading (basically a legal shipping contract and a receipt for the car being shipped), Insurance contract, and an original Export Certificate (basically a Japanese government Transport Ministry document about the car's origins and registration in Japan as well as information about the current owner/seller exporting the car to me). This document was written in Japanese and also translated into English. A copy of the shipping schedule, and a logistics agreement by the terminal company where my car would be unloaded from the ship in Vancouver was also included.
The Commercial Invoice includes a detailed breakdown of the car cost, the freight prepaid to Vancouver aboard a Specific Vessel and on a specific shipping date, cost of Marine Insurance, and the grand total paid to the seller. This invoice was signed by the seller on a document bearing his company letterhead.Step 6: Stuff you do while your car is crossing the ocean.
OK, now what? I learned that the actual process of clearing a car that was more than 15 years old (for import in Canada) through Canada Customs was pretty straightforward, but it could be daunting for a newbie, since all the paper work had to be available and or filled out quickly and accurately as the ship arrived in port and the various inspectors and authorities, and shipping company, logistics company, etc. were expecting the importer (ie. me) to present all required documents, pay fees and duties, etc.
I realized I needed expert help, so I found a local customs brokerage company that was able to act as my agent (it helped that they were already in the business of importing, servicing, and selling JDM cars) for a fee. The agent role would be to act on my behalf. I was still the importer of record, but the agent could handle the task of getting the shipping company to release my car so that the federal agriculture department inspector could inspect my car for soil, to handle clearing Canadian Customs and pay required duties, taxes and fees (including a $100 Air Conditioner excise tax!), and finally process release documents so that the port terminal logistics company would release the car so that it could be towed back to a licensed shop for modifications prior to inspection by a Provincial Ministry of Transportation inspector, who would certify my car as meeting licensing requirements for a motor vehicle to be operated in the province of BC.
So, I spent the time waiting for the car to arrive looking for, and buying new or used parts needed to modify my car so that it could pass a BC provincial mechanical inspection before licensing it as a motor vehicle. Step 7: Port Arrival, Customs, and Transport.
It took just over a week for the giant auto carrier ship to sail from Japan to the West coast. It sailed northward up the coast from Oregon, stopping in various US ports, including Tacoma port in Washington State before arriving in Vancouver's port a few days later. My agent handled the customs and port documentation, and the car was released to be towed to the shop a few days after that.Step 8: Compliance, Inspection and licensing.
Once the car was towed to the shop, I dropped off all the parts and authorized the shop to do the necessary pre-inspection work in order to license my car in this province.
Even though the car qualified for 15 year-old car exemption from Federal emission and safety standards, this allowed the car to be imported into Canada, but the car would not be licensable until it passed a provincial mechanical inspection.
Pre-inspection work consisted of a routine mechanical and safety inspection and maintenance, and some part replacements. Bearing in mind that a JDM Cultus shares many components with its North American variants, here are the major items that needed modification:
(1) Tires - need to have a DOT mark. The JDM tires were replaced.
(2) Light bulbs - need to meet North American illumination /wattage standards. All exterior bulbs were replaced.
(3) Center High mounted stop lamp - This needed to be retrofit.
(4) Daytime Running Lamps - This needed to be retrofit. Instead of using a standard Swift DRL setup, my car used a new relay energized by the ignition [Run] circuit, to supply power to the headlamp circuit.
(5) Headlamps - the JDM headlamps were focused for RHD use. North American composite lamps were retrofit.
(6) Side reflectors - The standard taillight and corner lenses lacked reflectors. North American units were retrofit.
After passing the inspection, a Private Vehicle Inspection Report was written and a Certificate of Approval decal was issued.Step 9: Insuring my Car
To summarize, I was able to get my Cultus here without too much expense, by doing as many of the steps needed myself, and relying on experts to handle the more complex tasks such as the customs brokerage and pre-inspection work. Other than the cost of the car, the sum of all the importation related charges and fees, during this import experience, was roughly comparable to that of a typical PDI (Freight, Pre Delivery Inspection) charge. (which a Japanese new car dealer charges on a mid-priced new car.)
A JDM car can be worth more than its domestic counterpart due to low mileage, and generally better condition.
However, not everyone wants a RHD car, and RHD specific parts may be harder to source, and that may limit its value in the future. Many North American State and Provincial governments are growing increasingly annoyed at how most (RHD) imported cars are now coming from Japan, rather than as RHD traditional collector sports cars sourced from Great Britain.
From an insurance point of view, there appears to be a modest premium to pay for insurance over a LHD version; RHD cars may be (unfairly) thought to be a higher risk due to perceived visibility challenges from driving while sitting in the right seat. Also, insured value may be low due to market valuation being undifferentiated from a typical 25 year old Geo Metro. So, make sure to explore any option you have to purchase a Declared Value
policy, and keep all your parts and labor receipts!