- Posted by: Administrator
- Category: Finance
Kenya imports more than 90 percent of used cars from Japan. Although the three known sources of used cars for the market are, Japan , Dubai and Singapore. Japan tops the list as the most popular and reliable source , thanks to the fact that their cars are in relatively good condition, highly competitive prices and meet standards imposed by the government.
According to Japan Used Motor Vehicle Exporters Association Kenya is the largest importer of used Japanese cars in Africa and ranked the fourth largest market globally for Japans lucrative used car industry. The process of importing a used car is transparent and you can buy one from the comfort of your house or office then have it delivered to your parking lot with a click of a button. Finance to purchase used vehicles is also available from local banks who work in conjunction with importers.
The process to import a vehicle is stringent and a step by step guide is provided below:
Identify what you want
As with other ways of buying a vehicle, the first step is to pinpoint exactly what you want. If you can narrow down your search the better, ensure to cover aspects of transmission, color and mileage since this will save time with your search on the internet. The basic rule is to choose a vehicle that is suitable for our roads and climate. Check for the year and month of registration as it will determine the amount of duty payable.
Select your source
There are three options available to source for vehicles: by logging onto a website and purchasing listed models, bidding online from the auctions in Japan and placing orders from the exporting companies. According to Japanese, Chamber of Commerce and Industry, the major used car dealers that export cars to Kenya are based in Kinki, Nagoya, Okinawa, Tohoku and Tokyo. Known companies are Alain Japan, Autocom Japan , Beforward Japan, SBT Japan and Trade carview among others.
They are regulated by Japan Used Motor Vehicle Exporters Association (JUMVEA) that also arbitrates in case of disputes between the buyer and the exporter.
Making an order
This is done via email, phone, or web chat .The price quotation can either be Cost Insurance and Freight (CIF) or Free On Board (FOB) the latter does not include freight charges and marine insurance. Provide details such as your name, contact details and address for purposes of processing a proforma invoice. This reflects on the agreed price and is required by your bank when wiring the money. The Japanese supplier will release the export documents once you have paid the whole amount. Payment is either 100% of the value before shipping or 50% down payment depending on the company.
This is done by the Japanese exporter and once again it is important to deal with a well established company because of the established networks it is able to facilitate your shipment faster.
Tracking and Clearance
The exporter will send the documents via courier and provide a tracking number.
These documents are necessary for KRA to clear the vehicle.
- 3 copies of Bill of Lading( which attests that the car is on board a particular ship) and also the estimated arrival time of the ship
- original logbook
- de-registration certificate and a
- JEVIC certificate.
All these documents must be forwarded to your clearing agent.
It is also important to factor in the laws that govern the importation of used cars as indicated below: Kenya vehicle import regulations is covered under the Kenya Bureau of Standard ( Standard Code:KS031515-2000)
All vehicles imported into the country must meet the below requirements.
Under 8 years old
Any vehicle imported should not be more than eight years from the year of manufacture. Another important fact is that the difference between the first month of registration and date of manufacture should not exceed one year.
Right Hand Drive
All vehicles imported to the country must be right hand drive. Except for special purpose vehicles such as ambulances, fire trucks and construction vehicles meant for projects that eventually are donated to the government.
Road Worthy (QISJ)
It is a requirement that all used vehicles must undergo a pre export roadworthiness inspection (RWI) and pass. Japanese vehicles importers are then issued with a road worthy certificate by Japan Export Vehicles Inspection Center Company Limited (JEVIC) for purposes of clearance at the port of Mombasa.
The exporters book a vehicle for shipment on the earliest vessel available since the shipping companies run the schedules. Their schedules are such that a vessel departs at the end of the month from Japan bound for Mombasa or Durban.
At times a second vessel departs during the middle of the month. Once payment is made inspection is done which can take a few days. Upon passing the inspection then booking is done a week prior to the vessels departure. Another one week prior to the vessels departure for purposes of customs clearance in Japan and then departure to Mombasa. It takes between 30-40 days after receipt of payment for the car to arrive at the port.
To clear the vehicle through customs services department of the Kenya Revenue Authority (KRA), you have to engage the services of a licensed clearing and forwarding agent with authorized access to simba 2005 system used by Kenya customs for clearance of cargo. It is important to include all information required for your customs clearance.
Available data from Japan used Motor Vehicle Exporters Association (JUMVEA) lists the average cost for a used saloon car is valued at $ 10,000.
The taxation of vehicle importation from Japan to Kenya is as follows:
- Import duty is 25% of the value of CIF
- Excise duty is 20% of the value of (CIF +Import duty)
- VAT is 16% of the value of ( CIF + Import duty+ Excise duty)
- Cumulatively import duty + Excise duty + VAT works out to 74% on all vehicles irrespective of engine capacity.
The attraction of importing from Japan has been successful not to mention that some unscrupulous traders are taking advantage of the situation and coning people tens of thousands of dollars. Despite the frequentness of this happening, many cases are not reported, allowing criminals to continue with this vice.
Importers should ensure that they have done due diligence before committing themselves to buying a vehicle. Kenya Auto Bazaar Association and Kenya Motor Industry Association to confirm authenticity of firms in Japan selling used vehicles as genuine.