Car Imports Factsheet

It has now long been known that car prices in the UK are a complete rip off. The usual unconvincing arguments provided by the dealers are to do with spec levels, or high tax rates. The real reasons why cars cost more in the UK are to do with the following:

(1) Nationally set manufacturers pricing policies (discrimination) – which take little or no account of overseas markets.

(2) In high tax countries, high tax and duty rates send showroom prices upwards. In order to maintain sales volume in these high tax countries, manufacturers compensate by lowering the pre-tax prices of these cars. Since the UK is a low tax market, there is no need for the manufacturer to lower taxes in order to maintain sales volume.

(3) Exchange rates on the British pound also play a role. For example, at the moment, the UK has a strong pound, so it is possible to make savings on imported cars. If, however, the British pound were weak, these savings would be more stretched and difficult to come by.

So, how do you import a car? To start off with, you must find a dealer in continental Europe (within the EU) who is willing to supply a RHD vehicle for export to the UK. Although this sounds fairly straightforward, it is indeed a mammoth task. Although under EU legislation, dealers are under a legal obligation to provide you with a car regardless of where you live, they often don’t. Although they could, in theory, be reported to the European Commission for this behavior it would be too much hassle, and probably wouldn’t aid you in getting a cheaper car at the end of the day! If a dealership simply refuses to supply you with a RHD for export, it is best to just move on to the next dealer – after all, there are plenty to choose from in Europe! Before you order a car on the continent, there are, however a few factors which should be taken into consideration; namely specification levels, right-hand-drive surcharges and pitfalls, and delivery times.

When comparing prices amongst varying dealers it is worth considering the specification of the car you are interested in. One of the justifications given by UK dealers for the UK’s higher car prices is specification level. Sometimes the UK spec will be higher than that of a Euro import, but often the UK spec is even lower. Remember that specification levels for the same car may vary throughout different European countries; indeed often different EU countries provide vastly different prices for a “UK Specification” car. It is always worth spending a little time comparing standard specifications in different countries; sometimes price differentials are largely eaten up - on others they remain enormous.

Another consideration, which arises when ordering a car in Europe, is right-hand-drive steering. When it comes to ordering an RHD vehicle, the dealer may reserve the right to charge extra for this feature (although this is also contrary to EU legislation). Also, remember that a European dealer taking a RHD order is running an additional risk; if you pull out for any reason, he is "stuck" with an unsellable (as he sees it) RHD vehicle. For this reason, dealers usually ask for large deposits (usually, 10-30% - but 50% is not uncommon).

Sometimes people hope to “jump the waiting list queue” by importing from Europe. Contrary to popular belief, buying in continental Europe is not a fast track delivery. Dealer restrictions imposed by certain car manufacturers often result in two to four, or even six months wait (possibly even longer for in-demand models). If a model is on a six-weeks wait in the UK, you will typically wait 12 - 14 weeks in Europe. Even longer delivery times are part of the "dissuading mechanism" employed by the importers and manufacturers to persuade you to pay the full UK retail price rather than save money buying in a cheaper continental market.

Now that all these factors have been considered, you should begin to think about registering the car in the UK. Much has been publicized about Euro imports and the “Mountain of Paperwork” involved. Consider this – Three hours of filling out papers = average saving £3’000; sounds worth it to me! Basically there are two sets of papers to fill out, namely those for the customs officials, and those for the DVLA (driver vehicle licensing agency).

Before any deals are signed with, you must get an estimate of VAT for the amount of tax to be paid on the vehicle to be imported. This is done simply by writing or calling Customs & Excise in the UK and asking them for an estimate of the VAT payable on the car you are interested in. Because of currency fluctuations, these estimates are exactly what they are called – estimates. If the quote is satisfactory and you go ahead and order the car there are a number of other things you must do. Firstly, you must notify customs of your acquisition by filling out a New Means of Transport (NMT) - Notification of the Acquisition form. Along with this form should be sent the original purchase invoice, any foreign documents for the vehicle (if applicable), and any documents showing how and when the vehicle was brought to the UK (e.g. ferry tickets); remember, the more you give customs, the faster they can process the information. When customs receive the notification and all the documents described above, they will calculate how much VAT you owe. The VAT is charged on the total amount paid for the NMT, including any optional extras fitted to it at the time it was supplied, plus any delivery or incidental charges made by the supplier. The amount specified by Customs & Excise must be paid within 30 days of the date on which it was issued otherwise you may be liable for a financial penalty in addition to the VAT due.

With regards to the Driver & Vehicle Licensing Agency (DVLA), in order to register a vehicle in the UK you must fill out form V55/5. In addition to this, you must submit the foreign registration and any other papers pertaining to the vehicle. Additionally, a customs clearance form (received when you pay the applicable VAT on the vehicle) must be submitted, along with a valid “European Certificate of Conformity”[1]. When all these requirements have been complied with, the vehicle can be issued with license plates and insured and driven on British roads.

Finally, often there are two factors about importing cars that worry people. Firstly, whether the warranty provided with the car is valid in the UK. By law, all EU manufacturers must give a Pan-EU warranty - and many even give worldwide cover. A UK dealer refusing to service or repair a vehicle soured within the EU should be reported to the importer or manufacturer - and / or the European Commission. Often a UK supplied vehicle includes an extended two or three year warranty; a feature not usually included in Euro imports. However, it may be possible to have the warranty of the imported vehicle extended through the UK importer (the UK importer will normally arrange for you to be supplied the equivalent cover via your local dealer – sometimes at a cost). Failing this, contact the AA or RAC for their quote on equivalent level cover. Secondly, people often worry about whether the car has all the appropriate papers to be registered in the UK. If there is a EU Certificate of Conformity (COC) or a Certificate of Vehicle Origin (CVO), UK registration is a straightforward process. However, you should be cautious of any vehicle re-exported from Asia into the EU. This may have been built to a foreign specification and will probably NOT have a COC or a CVO. To confirm the vehicle's origin, simply quote the VIN to the manufacturer or importer.

Now that all these factors have been considered, if you are still interested in importing a car to the UK, then the savings can be phenomenal. The two remaining steps are the simplest ones; firstly order the car, and finally, when it is ready, simply pick it up where it was ordered.

[1] This shows that the car was built to agreed European standards for vehicle construction and pollution performance. Certificates of Conformity can be obtained either from the manufacturer or their agent - a charge may be made for this.