How to import second hand cars in PNG -

How to import second hand cars in PNG

Nov. 8, 2017, 05:09 am.
Step by step guide for importing cars into PNG

Importing a secondhand car can be pretty intimidating and challenging for someone who is not familiar with the vehicle importation process. This is enough to deter anyone from pursuing this specific course of action. 

However, once knowledgeable, buyers and sellers can import a range of models that had been previously unavailable in the country. That’s why Marketmeri created this step by step guide, to help you jumpstart your way to importing vehicles in PNG.

What are the advantages and disadvantages of importing a secondhand car?

The car import industry has had its fair share of praises and complaints in recent years – even raising concerns of quality from the Road Traffic Authority back in 2015, and again in mid-2017. This is the risk you have to take when shipping from overseas. However, that doesn’t mean that all imported secondhand cars in PNG have issues. Given the right amount of foresight and market insight, you can buy a good quality car at a fairly reasonable price.
This is especially true for cars from Japan. Being one of the tech-forward countries that have a number of automobile manufacturers, innovation tend to work in favor of the emerging markets like Papua New Guinea because cars are more likely sold at a fraction of the normal cost to help the seller afford a more current car.

In fact, in an article for Business Advantage PNG, The Lowy Institute’s Jonathan Pryke mentions that Japan has been one of Papua New Guinea’s primary importing markets for vehicles and other technical appliances.


What should I check for before purchasing a car for import?

Before going through the whole import process, it’s important to do your due diligences first. This includes getting photos of the car, examining if there are dents. You can even ask for a video of the car running just to get a feel of what you’ll be buying. Check to see if the original documents are also in place, including whether or not the Vehicle Identification Number is valid. Do a background check on the seller as well, if possible.

Importing secondhand cars intead of buying a new one might ultimately be less expensive, but it still costs a lot of time and effort – especially because Customs in PNG are very strict when following protocol. It would be a shame to get a car and realise, in the end, that it wasn’t even worth importing at all.


What are the relevant fees for importing a secondhand car in PNG?

Other than the cost for the vehicle, here are a few more things to take into consideration when you import secondhand cars in PNG:

  • Freight and Freight Insurance:

The total cost for shipping is dependent on the chosen freight service provider. You can obtain the exact price either from the seller or the freight company.

  • Cost, Insurance, and Freight Tax:
The CIF (Cost, Insurance and Freight) is the total amount that’s paid for the vehicle, insurance, and freight multiplied by the percentage designated by customs. The percentage is dependent upon the engine capacity.

- For all vehicles with an engine capacity less than 2700cc (personal use): 60%
- For all vehicles with an engine capacity bigger than 2700cc (personal use): 110%
- For commercial units with seating capacity over 10: 10%
- For commercial units with seating capacity under 10: 40%

  • Import GST:
GST stands for Goods and Services Tax. For importing secondhand cars in PNG, this is 10% of the combined total that’s paid for the vehicle, insurance, freight, and the CIF tax.

  • Brokerage:
Customs brokers are professionals who coordinate with the Customs department to get clearance for the car to be released. They will forward all the necessary information to Customs for approval and handle the documentation of the import process.

  • Storage:
A storage fee is charged whenever the vehicle is left for a prolonged period of time, below 30 days. It is dependent upon how long the car stays in storage. Once the vehicle remains unclaimed after 30 days, it will be forfeited to the State of Papua New Guinea.

  • Quarantine Costs:
All imported vehicles and second hand equipment are required to be steam cleaned upon arrival. The cost is determined by Customs.

  • Wharf Handling Costs:
This is paid for the handling of the vehicle at the port by Customs officials and staff. The cost is determined by Customs.

  • Inspection:
Other than undergoing inspection to evaluate whether the data submitted to Customs were accurate, imported cars are no longer subject to the initial road worthiness test. So, a safety inspection is also required to find out if the vehicle is good enough to drive.

  • Car Registration:
This is paid towards Customs to register for the importation process.

Here’s a example of the costs to import a PGK8,000 car:

Cost of Vehicle with 2,000cc engine capacity: K8,000.00
Costs of Freight: K3,500.00
Cost of Freight Insurance: K270.00
CIF tax: (Cost of Vehicle + Cost of Freight + Cost of Insurance) * 0.6 = K7,062.00
Import GST: (Cost of Vehicle + Cost of Freight + Cost of Insurance + CIF Tax) * 0.1 = K1,883.20
Brokerage Costs: K650.00
Quarantine Costs: K123.20
Wharf Handling Costs: K650.00
Safety Inspection: K30.00
Car Registration: K160.50
Total Cost: K22,328.90

For inspection, handling, quarantine, registration,and brokerage costs, you can inquire through Customs:

Papua New Guinea Customs Authority
+675 312 7594
GBC Complex,
Waigani Port Moresby 
National Capital District 1111
Papua New Guinea

Or mail:

Papua New Guinea Customs Authority
P.O.Box 923
Port Moresby,
NCD, Port Moresby, 121
Papua New Guinea.
What are the requirements for import?
Here’s a list of documents you need to have before, during, and after the whole process:

  • - Certificate of Title and Registration – Obtained from the seller
  • - Original Commercial/Purchase Invoice – Obtained from the seller
  • - Driver's License (if you need a licence you can Apply for one online via Motor Vehicles Insurance Limited Application Form)
  • - International Insurance Policy – Obtained from the insurance provider
  • - Customs Declaration – Lodged by Customs broker with the Department of Transport and Infrastructure.
  • - OBL (Original Bill of Landing) – Obtained from the seller.

What is the process of importing a secondhand car in PNG?

Step 1: Coordinate with distributor or seller
If you are buying the car through a importer, make sure that you important questions like freight costs, insurance fees, and the vehicle’s expected time of arrival. This will not only help you set your expectations, but it will also help you compute for the import taxes and the GST (goods and services tax).

If you are purchasing the car directly from a seller in another country and importing it yourself, make sure that you obtain the required documents and information from the seller, such as the purchase invoice and the Original Bill of Lading.

Commercial vehicles, on the other hand, have a different set of requirements which include the original certificate of title and registration, the original commercial/purchase invoice, driver's license, international insurance policy, customs declaration, the original bill of lading.

Step 2: Coordinate with a Customs agent/broker
Present the applicable documents to a customs agent or broker so you can secure the necessary permissions to allow the import of your secondhand vehicle. The broker first files a declaration with DTI (Department of Transport and Infrastructure). Once the tax clearance, certificate of conformity, and certificate of assignment have been obtained, you will then be eligible for registration.

Step 3: Register with Customs
For registration, you would have to pay the handling cost, the payment for brokers, the quarantine fee, the registration fee, the inspection fee, and taxes. The taxes you would have to pay include the CIF (Cost, Insurance, and Freight) Tax/Import Duties, and the GST (Goods and Services Tax). You would then need to pay Customs Duties which usually depend on the engine size of the vehicle and the type of vehicle being imported.

If there is doubt in the values declared, the vehicle could be held back for further investigation to assess its value.

Step 4: Wait for your vehicle to be released
Once everything is approved, just wait for the vehicle to be approved, quarantined, and inspected, then you can claim the car through Customs. After that, you can literally enjoy the ride of your life.

It can get exhausting with all the paying and waiting for your car to arrive, but with greater understanding of the process, you’re less likely to get confused and stressed out. After all, if you want something, you’re supposed to do everything you can to get it. And once you do get it, you’ll know that it will all be worth the wait!

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