• Monday, December 04, 2023
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How to import your car into Nigeria and surprises to expect (2)

How to import your car into Nigeria and surprises to expect (2)

Now that the choice had been made to purchase the Mazda CX-9, the next thing was the first of a few ‘nightmares’; paying. Specifically, getting dollars across to the auction company.

The $600 deposit made through card was first deducted and the balance – which included fees and taxes – was to be wired to the company. Even though Auto Auction Mall appeared reputable and established, trust was an issue – especially as a first transaction – and this reporter initially attempted to pay directly through a dollar account with GTB.

After funding the GTB account with dollars, “the highest amount you can send is zero,” was the response when attempting to transfer the funds.

Panic set in and it appeared Nigeria was about to happen to this reporter, as the parlance goes. If payment was not made within a week, the deposit of $600 would be forfeited.

AAM was still willing to facilitate payment on behalf of the buyer, by receiving naira and having someone in the US pay dollars into its account. However, this reporter kept searching until an acquaintance agreed to make the payment and was subsequently reimbursed. It was a close call; $600 in the current Nigerian economy was almost lost.

It should also be noted that there is a $249 fee charged by AAM on each purchase, which is in lieu of what one would have paid for, say, Copart membership. There are other fees computed when one is making a purchase either directly from Copart or through AAM, but AAM says the fees paid when using its services are lower as it gets discounted rates on purchases it makes on behalf of customers.

There is a fee calculator on every page with a car listing, which shows the total one could expect to pay on any vehicle (based on its sale price).

Even though the U.S. dollar is increasingly becoming a luxury piece of paper to behold when exchanged against the naira, when the cards are played right, direct car importation remains far cheaper and safer than buying from the local Tokunbo market

The next leg was shipping, before this, one may wonder, what if the car was not in a good condition?

Testing is possible

It is expected that after spending a few thousands of dollars to purchase a car, one would require quality assurance so that there are no surprises when it gets to Nigeria.

There are companies that offer inspection services to check the physical and mechanical performance of the vehicle. From transmission to engine, and some electricals, inspections are done and a sample of one of such reports that was shared shows most aspects that could affect a vehicle’s performance.

It is good practice to have such reports done, especially where the car being bought is expensive. For this Mazda, auction was in 24 hours and within that time, two things could happen. Someone may hit buy now and take the car, or the inspection would likely not have even been done before auction, defeating the purpose of paying.

The inspection would have cost $134 and in what was a literal ‘fingers crossed moment’, the purchase proceeded without inspection.

Be wary of a car’s location

The listing of the car purchased indicated it was in Massachusetts, which is one of the preferred locations to buy cars if shipping to Nigeria. The farther a car is from a port, the costlier it is to get it, first to the port, and then to Nigeria.

It could be very expensive if it is so far from the port.

The problem was, while it was listed as Massachusetts, it was in fact parked at a sublot in Vermont; a location that truckers moving cars to the ports don’t go frequently and in summary, a more expensive and time-consuming option. The car would later spend two weeks sitting in that lot even after payment was made, before a trucker was able to pick it up and take it to the port.

The Massachusetts listing was because the titles were at that location and was being sold from there, but the car was not physically there. The lesson here is to always check on the page for where ‘additional notes’ or any such messages are written to be absolutely sure there are no surprises later.

Typically, storage fees of $50 dollars are to apply every day (after the third day of payment), but luckily the peculiarities of the purchase made the auction suspend storage fees. The titles were in one place, while the car was in another, and it already complicated arrangements to make a pickup as the driver had to drive to two different locations.

It was explained that vehicles are usually picked up and delivered to the ports within 2-3 days but the offsite location for the vehicle purchased and the title being in the main lot created the complications. Again, lesson learnt.

Shipping to Nigeria

After getting a trucker to move the car to the port after two weeks, the shipping to Nigeria had finally commenced. If AAM is to handle shipping, a deposit of N350,000 is required and once the shippers share the invoice, it is reconciled and one pays the balance.

The reason for the deposit, it was learnt, is because if someone suddenly fails to conclude a shipment that had been started, the company initiating it (AAM in this case) would be at the receiving end of penalties.

It should also be noted that the initial estimate to ship the car to Nigeria was around $1500. However, because of the surprises thrown up by location, the cost became $2,090; $590 more than expected.

This reporter again opted to arrange dollar payments in the US, which went through and concluded the transaction, at least on that end.

One could also pay for ocean freight insurance at $1.50 for every $100 at the time this shipment was done. It is optional, but good practice.

Clearing in Lagos

There are those called clearing and forwarding agents who have made careers from clearing goods from the ports. A few things however stood out during this experience.

The first is an electronic system for registering all cars coming into the country. It is called Vehicle Registration System (VREG), and is supposed to lead to “significant reduction in customs duty evasion. Curbing vehicle theft and other vehicle-related crimes.”

It was however observed that the initial registration could be done by any clearing agent, and if such a person decided to sabotage the clearing process, the original owner of the vehicle would be stuck. The experience showed it was better for whoever owned a car to at the very least initiate and secure vReg on their own.

In the clearing process for this vehicle, the firm of the agent that was used, a certain Tony Anakebe, it would turn out did not have the requisite permits to clear a car even though claimed to be a clearing company. It took a week of twists and turns, then eventually insisting to follow the supposed agent to the shipping company when it emerged the agent had been trying to secure an ‘Access card’, without which they couldn’t complete formalities with the shipping terminal and get the car out.

Read also: How to import your car into Nigeria and surprises to expect (1)

Getting another agent to complete the clearing process was problematic because the agent had done vReg in their company’s name. If the owner (i.e. importer) initiated it, the situation could have been easier to manage. Lesson learnt; be sure your clearing agent is fully licensed (and yes, especially for cars), reliable, truthful.

The next thing is duty payment, which had become automated at the time of this ‘experiment’. It also meant paying more than was done in the past, in fact, almost double the estimate given initially.

It should be noted that the fees charged by agents vary and it was found that while much of this is claimed to be bribes they would pay in the clearing process, these sums were inflated in order for the agents to net extra cash.

With duty and other terminal charges paid, the car is released and taken on a journey through multiple extortion points from uniformed to ununiformed individuals across myriads of ‘agencies’ before it is delivered.

Auto Auction Mall, as indicated earlier, had said it could handle the entire process, and the estimates given for the clearing were not far off what other agents gave and eventually spent. Throughout the process, Femi Amisu, regional manager for AAM was regularly engaged via chats for updates; from auction to shipping and all the surprises in between until the car was delivered in Nigeria.

In conclusion, even though the U.S. dollar is increasingly becoming a luxury piece of paper to behold when exchanged against the naira, when the cards are played right, direct car importation remains far cheaper and safer than buying from the local Tokunbo market.