In recent years, due to the high cost of new and used cars, some people have been looking into importing cars from overseas. These grey-market imports have attracted enthusiasts and drivers who want to try something different at a comparable cost.
Under current law, only cars that are 25 or more years old can be imported, unless the car is modified to meet Federal Motor Vehicle Safety Standard (FMVSS) requirements. For most people, that is cost prohibitive. But even these older cars have become appealing for several reasons. They are more analog with less technological features that can be expensive to fix. Also, there are desirable models that were not sold in the U.S., such as the Nissan Skyline and wagon versions of German luxury sedans.
While importing a car privately is an arduous process that may require assistance from an exporter, customs broker, and a local specialist mechanic, I want to share one aspect of the process that can be done on your own.
Even though a car can be imported under federal law, registering the car for use in a state’s roads has its own separate rules which is the topic for today’s column. I will use California’s requirements and procedures because I live here, and it is one of the most time-consuming and expensive states in which to register an imported vehicle. But almost every state has similar (and hopefully easier) registration procedures.
First, you will need to complete the application to register the car. In California, it is form REG 343 (Application for Title or Registration). The form is relatively straightforward and easy to complete. In some states, you may also need to include a copy of your driver’s license or another form of ID and proof that the car is insured.
Second, you will need proof that the car has cleared U.S. customs and legally entered the United States. California’s DMV requires three completed forms that you should have if you used a customs broker when you shipped the car:
NHTSA Form HS-7 — This form explains on what grounds the vehicle can legally enter the U.S. In most cases, it is because the car is over 25 years old and exempt from FMVSS requirements.
EPA Form 3520-1 — This form certifies that the car meets EPA emission standards unless an exemption applies. In most cases, cars are imported under exemption for cars over 21 years old. One caveat for this exemption is that the engine must be original and unmodified. For example, some people in Japan are installing upgraded engines on Nissan Skylines such as the R1 or the Nismo S1. This could make the cars ineligible to import under this rule although it appears that this is hardly ever enforced.
CBP Form 7501 (Entry Summary) — This form shows the calculation of the car’s duties and tariffs but it does not show that the car has been cleared for entry. To prove clearance, the DMV states that the form must contain the car’s chassis or frame number (equivalent to a VIN in other countries) and a stamp containing the DHS logo. Since these forms are typically filed electronically, you will need to go to a local Customs and Border Protection (CBP) office to get the form stamped. If you do go, be sure to bring two forms of ID and all relevant import paperwork.
Third, you will have to provide documents that you are the legal owner of the car. This typically requires one or two documents. The first is an export or deregistration document issued by a government agency which allows the car to leave the country. It contains the car’s chassis number (VIN), the owner information, and the date of manufacture (to meet the 21- and 25-year exemptions mentioned above). Be very careful with this document because the DMV will only accept the original. Make a copy before you send it. Also, if the certificate is not in English, you must also include a certified translated copy.
The export or deregistration certificate usually does not list the buyer as the owner of the car but instead the intermediary such as the exporter the buyer has hired. If this is the case, you will also need to include a bill of sale between you and the owner listed in the certificate and signed by both parties. You can create a simple buy/sell contract or preferably use the sample bill of sale document from the DMV.
Fourth, you will need to have the car’s VIN or chassis number verified. In California, only a Highway Patrol (CHP) officer can verify the VIN of an imported vehicle. While this sounds simple enough, it is actually tricky because this step results in two visits to the DMV. You need to plan (explained later) or you may wait a long time between both visits. This is because you must first get a referral from the DMV to get a VIN inspection. Also, you must set up an appointment at a CHP office and some places have a month-long wait time. This inspection should take about 30 minutes and the inspecting officer will give you a completed REG 31 form after the inspection.
I have saved the worst requirement for last. This requirement applies only in California. The DMV requires an emissions compliance certificate which can only be issued by a state-approved modifier that does the emissions testing and modifications. Currently, only one shop (G&K Automotive Conversion) has the credentials to do this. Not only are they expensive, they keep the car for an estimated 8 to 12 weeks for modifications, testing, and government approval. Because of this, many people skip registering their cars in California and opt to register in states like Montana, Washington, and South Dakota to name a few. This is illegal if you are a California resident but it is seldom enforced unless the car is pulled over for a different reason.
While they are working on your car, use the down time to go to the CBP office to get the stamp mentioned above, save money for tax and registration fees, and schedule a VIN verification appointment with the CHP. You may need to contact multiple CHP offices to see if one of them has the time and day close to when the car will be done.
Once you have all of the above documents ready, go to the DMV and submit them to the clerk. The clerk will then give you a referral to see a CHP officer for VIN verification. If you planned correctly, you shouldn’t wait too long. Once the VIN verification is done, return to the DMV where the documents will be forwarded to their Technical Compliance Section. Since processing can take some time, the DMV will give you a temporary operating permit good for 90 days.
If you did all of the above, your car should be approved for registration based on the initial submission. If the car is paid in full, you will get a title certificate separately. However, there is a chance that the DMV will respond by asking for more documents or money, and this can add a few weeks of waiting time. Maybe the registration amount or paperwork was incorrect. Or they may ask for something unnecessary, which can cause headaches. In one case, the DMV asked for proof that the car meets the FMVSS requirements even though the car is over 25 years old. For the most part, if the document request is simple, then that should be the final request. But if the request is vague or confusing, you should reach out to the sender of that letter.
While the California DMV and others explain the registration process for imported vehicles, I found that it is not complete, which has led to confusion and delays. Hopefully this column will fill in the gaps so that the registration process is done as quickly as possible. And for those who live in other states, contact your state’s DMV and have all of your questions answered before you begin the process. Importing an overseas car is not for everyone, but for those who have made adequate preparations, it gives them more purchase options and their car will stand out from the crowd. For more information on the import process, click here.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at stevenchungatl@gmail.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.
The post From The Port to License Plates: How To Register An Imported Car In Your State appeared first on Above the Law.