The African country of Ghana has seen more than one million cars get imported over a period of 10 years, from 2005 to 2016, with 80 percent of these vehicles being used cars. Several countries stand out as leading export sources, namely Japan, the United States and Germany. For the most part, it seems that Ghana’s fairly simple import procedure makes the country a bustling market. It’s easier than ever before to import a salvage car into Ghana. However, it is also a dumping ground for vehicles that don’t comply with environmental regulations in more developed countries. So, instead of scrapping these vehicles, exporters see Ghana’s used car market as an opportunity to earn some extra cash.
What Are Your Options?
If you are a used car salesman from Ghana, you are certainly looking into options. There are a few recent developments you must be aware of. Firstly, the government proposed a luxury car levy, basically cars with 3.0-liter engines and above.
In addition, in order to fight pollution and cut on emissions coming from vehicles that have failed to comply with environmental regulations elsewhere and have found their way to Ghana’s roads, the government issued a “Vehicle Emission Enforcement” in November 2016. Although studies are in progress, you may expect a more stringent tax on vehicles that fail the emissions test.
So far, Ghana’s government enforces an average penalty based on the CIF value of the car for vehicles older than 10 years. These penalties range from cars older than 10 but not more than 12 year (2.5 percent), cars of age between 12 and 15 (10 percent), between 15 and 20 (15 percent) and a 20 percent penalty on cars older than 20 years.
But you are already familiar with the regulations in Ghana and would like to purchase cars abroad, specifically the United States, and ship them over. Also, you would like to import a salvage car into Ghana. Luckily, the import fees are the same for new and used and damaged vehicles in Ghana. The tax and levy calculations are based on the age of the car. Let’s look at your options.
Buying Used Cars at U.S. Auctions
If you are looking for salvage cars, you can take care of everything online. There is a wide range of auction houses that sell thousands of salvage, used and even new cars each day. Your goal is to partner up with companies such as Auto Auction Mall. These companies will help you find the vehicles you want and have them delivered to Ghana without much hassle.
Usually, you would have to be at an auction to inspect the cars that interest you. But to keep costs at a minimum, you should register at an online platform that has access to a large auctioned cars database, like the Auto Auction Mall. You will have access not only to cars at open auctions, but also to cars that available only to the dealers in closed auctions.
Once you register and make a deposit, which depends on the site you choose to work with, you will be granted access to the database that you can search through according to your preferences and requirements. You get access to vehicle data, images and potentially description of the vehicles condition and faults.
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Once you find the vehicles you plan on buying, you can contact the manager in charge of your account. They to make the bids for you and make sure you land the cars you selected, under the budget you provided for the purchase.
You now need to transport the cars to the port from which they will be shipped to Ghana. This can also be handled by the manager, who can direct you to the transport company. They can also direct you to the car brokers the company works with. These will take care of all the paperwork to get the car ready for shipping
Shipping the Car to Ghana
Shipping the car usually takes place on container ships or roll-on, roll-off ships. The latter will require your car to be functional and capable of moving under its own power. However, this also means that, depending on the vehicle’s position on the vessel, it could be exposed to elements. That’s why this sort of shipment is a bit harsher on the vehicle.
Whichever option you choose, keep in mind that there are 11 ports that you can ship the car from. These ports are Baltimore, Bayonne, Galveston, Houston, Jacksonville, Long Beach, Miami, Newark, Oakland, Portsmouth and Savannah.
All cars arrive at the port of Tema.
Getting the Import Paperwork Ready
When the car arrives, there are certain papers you will have to provide. These include the original Bill of Lading and your proof of identification. The process is fairly simple in Ghana, as long as you have all the paperwork ready.
The next step is to take care of the import taxes. Besides the environmental levy noted above, import duties are calculated on the CIF (cost, insurance and freight) value of the car. Import duties range from 0 to 20 percent, depending on the car’s age. Other taxes and obligations include a value added tax (VAT) ranging from 0 to 12.5 percent and the health insurance levy that ranges from 0 to 2.5 percent. They also include an ECOWAS levy of 0.5 percent, export development fund of 0.5 percent and a 1 percent examination fee.
However, due to the initial price of the car, which at auctions is likely well below retail prices, there is a significant potential for profit even after you pay fees, transport costs, and import duties.