Why are Imported Cars So Expensive?

Team AckoOct 27, 2022

We Indians, look at imported things with utmost pride. Often, these items are used to show off among friends. “London ke chachaji ne imported pen bheja hai! I’ll write the exam with this exquisite pen!” or “My sister sent makeup from the US of A!”. Imported stuff are sure to draw more attention than local products. But the ultimate game changer is always an imported car. Remember the Ferrari that the ‘master blaster’ owned? Or the fancy imported cars people drive around Bandra or South Delhi?

However, only a handful of people can afford such luxuries. Imported automobiles are very expensive, and thus are rare. We looked into why imported cars and bikes have such hefty price tags, and this is what we found.

Contents

#1 Transport
#2 Paperwork
#3 Customs
#4 The Rules
#5 Insurance

#1 Transport

Transporting a car from one country to another is done via airplanes or ships. Both modes are excruciatingly expensive. Plus, you would want the delivery to be smooth and the cargo in first class condition. This can be ensured with the help of car insurance, which will also cost additional money.

#2 Paperwork

Importing a car requires various stages of clearance. This translates to paperwork and payments. As far as India is considered, you will have to submit certain documents to the regional transport office, like, roadworthiness certificate. Cars worth less than $40,000 need to undergo the homologation process from the Automotive Research Association of India. Through this process, your car will be deemed as a product that meets Indian regulatory standards and specifications. All these are expensive processes.

#3 Customs

Prepare to get your mind blown! The customs duty on importing a new car is 102%. On old/second-hand cars it is 160% of the ex-showroom price. These costs raise your overall expense of owning a car to more than 200% of its original price.

#4 The Rules

Apart from the financial factor, one must also follow the rules & regulations for registration of imported vehicles in India. The car should strictly be right-hand-drive. The engine’s cubic capacity should be more than 2500cc. Any value lesser than this will not be allowed in the country. If you choose to ship your new car, it can be brought at Mumbai, Calcutta or Chennai ports. Those who wish to get their used car into the country can get it shipped to Mumbai port only.

#5 Insurance

Luckily, the car insurance policy will be priced as per factors like its current insured declared value, the make and model, engine’s capacity, the owner’s claim history (if applicable) and the type of insurance policy. In addition, there’ll be an importing cost for the vehicle.

So now that you know about these additional costs, weigh out your options before importing a car. Perhaps you can go for a luxury car in India. The process will be way more hassle-free and much lighter on your pocket. And of course, don’t forget to insure it! That’s the rule.

Also, read: Vehicle Scrappage Policy in India

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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