Importing cars into Nigeria is a lucrative business due to Nigeria’s high demand for vehicles. According to the United States International Trade Administration, Nigeria requires approximately 720,000 vehicles annually, yet local manufacturers produce only about 14,000.
This significant gap makes car importation a necessity to meet consumer demand. Importing cars not only provides access to a wider range of vehicles, including the latest models and cost-effective options unavailable locally, but it also presents a profitable business opportunity.
By engaging in car importation, businesses and individuals can capitalize on high-profit margins while offering buyers the flexibility to choose their preferred vehicles beyond the limitations of local manufacturing. However, the process of importing vehicles involves strict regulations, documentation, and financial considerations. Thankfully, this article provides an overview of how to successfully import cars into Nigeria.
What is Importation?
Importation in Nigeria is the process of bringing goods into the country and involves several key steps. First, an importer hires a clearing and forwarding agent to manage the documentation and logistics. Goods are then subject to customs duties, which must be paid to the Nigeria Customs Service based on their classification and value.
Some goods require an import license from relevant regulatory bodies like NAFDAC, depending on the category of items being imported. Importers must also submit an Import Declaration Form (IDF) and may face physical inspection of their goods. After payment of duties and taxes, goods are cleared for release and delivered to the importer.
Nigeria has specific regulations governing car imports, primarily enforced by the Nigerian Customs Service (NCS). They include:
- Customs Duty: Imported vehicles are subject to customs duties, which vary based on the type of car and age. New and used vehicles may attract different rates, typically ranging from 20% to 35%, depending on engine capacity and age.
- Value Added Tax (VAT): A 7.5% VAT is charged on all imported goods, including cars.
- Environmental Levy: Vehicles older than eight years attract an additional environmental levy of up to 10%, which aligns with government efforts to promote cleaner, more efficient vehicles.
- Comprehensive Import License: Those importing vehicles in large quantities must obtain a comprehensive import license from the National Automotive Design and Development Council (NADDC).
- Age Restriction: The maximum age for importing used cars is 15 years from the manufacturing date. Any vehicle exceeding this limit is prohibited from entering the country.
An importer must adhere to these regulations to ensure smooth importation and avoid penalties.
Guide to Import Cars into Nigeria
Below is a simplied guide to importing a car into Nigeria.
1. Research the Car You Want
Before importing a vehicle into Nigeria, you must ensure it meets the country’s import regulations. Key factors to consider include the car’s age, as Nigeria restricts imports to vehicles no older than 15 years, and its condition (whether brand new or used) to avoid additional costs on repairs or compliance modifications.
Additionally, ensure the vehicle meets Nigerian safety and environmental standards to prevent importation issues or extra levies. Proper research and adherence to these regulations will help you avoid delays, fines, or outright seizure of the car.
2. Find a Reliable Supplier or Seller
Nigerians imports cars from the United States, Japan, South Korea, Germany, and France, with most shipments arriving through Apapa and Lagos ports. You can source vehicles directly from manufacturers, wholesalers, or online platforms like eBay Motors, Autotrader, or various international car auctions.
Do a thorough research, verify the supplier’s reputation, check reviews, and confirm their track record in exporting vehicles to Nigeria. We also recommend that you understand their terms, pricing, and ability to provide necessary documentation such as the bill of lading and certificate of origin.
3. Ship the Car to Nigeria
After selecting your vehicle, the next step is to arrange for shipping. This includes choosing a reliable shipping method, such as Roll-on/Roll-off (RoRo) or container shipping, based on your budget and security needs. RoRo involves driving the car onto a vessel, whereas container shipping involves loading the car into a sealed container for transport.
The cost of shipping depends on the size of the car, the shipping method, and the country of origin. On average, shipping a car from the US or Japan can cost anywhere from $1,000 to $3,000.
Again, the two main ports of entry for car imports in Nigeria are the Apapa Port and Tin Can Island Port in Lagos. Ensure you have the correct documentation for the port you are shipping to, including the bill of lading, certificate of origin, and shipping invoice, import permit, etc.
4. Clear the Car Through Customs
Once the car arrives at the port, you need to clear it through the Nigeria customs. The steps involved in clearing the car are as follows:
- Pay Customs Duties: This involves paying the required duties, VAT, and environmental levy. The amount you owe will depend on the customs valuation of your vehicle, which is based on the model, year of manufacture, engine size, and other factors.
- Provide Documentation: The key documents required for customs clearance include:
- Bill of Lading which serves as proof of shipment.
- Invoice from supplier that reflects the purchase price of the vehicle.
- Proof of payment for customs duties and VAT payment.
- Vehicle title and registration documents.
- Import duty payment receipt issued by the Customs Office once payment is made.
- Car Inspection Report
Customs clearance can be a complicated process, so it is advisable to work with a licensed clearing agent who is familiar with the process. They can help you navigate the paperwork, make the required payments, and ensure that the car is cleared.
5. Register the Car
The final step in the importation process is to obtain a Vehicle Identification Number (VIN) and complete the necessary registration with the Federal Road Safety Commission (FRSC) to receive your official vehicle registration certificate. This ensures that your car is legally recognized for use on Nigerian roads.
To begin, apply for the VIN through Customs. Once cleared, proceed to the FRSC licensing office or a designated Vehicle Inspection Office (VIO) to register the car, obtain number plates, and secure a roadworthiness certificate.
The registration fee varies depending on the type of vehicle. The car will undergo a roadworthiness inspection to ensure it is safe for use on Nigerian roads. After successful registration and inspection, the vehicle will be issued official Nigerian number plates.
Conclusion
Dealing with customs procedures can be complicated, especially when trying to get the right permits and licenses. If you are not aware of import rules or policy changes, you might face delays or even have your shipment seized.
Busy ports, slow loading and unloading of cargo, and long waiting times for clearance can cause delivery delays and increase costs, making the process frustrating. To avoid these challenges, take time to research and understand customs regulations, ensure all your documents are complete and up to date, and stay informed about market trends. It is also wise to get insurance and plan your budget carefully to prevent unexpected expenses.
For a smoother experience, consider working with a trusted logistics company with expertise in shipping and customs clearance. This can help ensure your vehicle arrives without issues.