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The Official Cost Of Buying And Clearing Honda Cars From Customs In Nigeria
The cost of buying and clearing Honda cars from customs in Nigeria involves several expenses that add significantly to the vehicle’s initial purchase price. Importing a Honda vehicle to Nigeria includes not only the car's market price but also the logistics costs associated with international shipping, customs duties, and additional clearing charges at Nigerian ports. Here's an updated breakdown of these costs as of 2024.
Purchase Price of the Honda Vehicle
The first expense is, of course, the purchase price of the Honda car, which varies based on the model and year. Popular models like the Honda Accord or Honda Civic can cost anywhere from ₦3,000,000 to ₦8,000,000 depending on the car's condition and the dealer’s location. This initial cost forms the base for calculating duties and taxes upon import.
Shipping Fees
Shipping a vehicle from the U.S., Europe, or Asia to Nigeria is an additional cost that depends on the shipping method (container or roll-on/roll-off) and the port of origin. Shipping fees for a car typically range from ₦300,000 to ₦700,000. This cost fluctuates with the exchange rate, as it's usually calculated in dollars, so any weakening of the naira increases the expense.
Customs Duties and Taxes
Nigeria imposes one of the highest customs duties on imported vehicles globally. Here’s a breakdown of key charges:
- Import Duty: Set at 35% of the car’s value, this duty is calculated based on the current market price of the vehicle. For instance, if the Honda car's value is ₦5,000,000, the import duty alone would be ₦1,750,000.
- VAT (Value Added Tax): This is an additional 7.5% of the car's value. For a vehicle worth ₦5,000,000, the VAT would be ₦375,000.
- Nigerian Ports Authority (NPA) and Processing Fees: This includes a 1% Comprehensive Import Supervision Scheme (CISS) fee, a 2% ECOWAS Trade Liberalization Scheme (ETLS) levy, and a 0.5% National Automotive Council levy. Combined, these fees add approximately 3.5% of the car’s value to the final bill, equating to ₦175,000 for a ₦5,000,000 Honda car.
- Additional Taxes: Certain Honda models may incur an extra levy depending on their engine size and year of manufacture. For instance, some states impose luxury taxes on vehicles with larger engines, although this is less common with standard Honda models.
Clearing Agent Fees
Given the complexity of the customs process, most car buyers hire clearing agents who handle the documentation, handling, and storage fees associated with the import. Clearing agents typically charge around ₦150,000 to ₦300,000, though rates can vary depending on the port and the specific requirements of each vehicle. Experienced agents help ensure that all duties and documentation are managed efficiently to avoid delays.
Terminal and Demurrage Fees
Upon arrival, the vehicle may incur terminal handling fees at ports like Tin Can or Apapa in Lagos, which cover storage and handling costs. Depending on how long the vehicle stays at the terminal, demurrage fees may also apply if clearance delays extend beyond the free storage period, adding further costs of ₦10,000 to ₦20,000 per day.
Impact of Exchange Rate and Import Policies
With the naira’s current instability, clearing costs are vulnerable to fluctuations in the exchange rate. If the rate changes from ₦500 to ₦700 per dollar, for example, duties and fees increase proportionally. This exchange rate volatility has led many buyers to purchase their foreign exchange in advance or rely on the parallel market, which can increase costs further. Additionally, Nigeria's import policies favor locally manufactured cars, which keeps import costs high to discourage vehicle imports.
Sample Cost Estimate
To illustrate, let’s take an example of a used Honda Accord 2010 model with a market value of ₦5,000,000. Here’s a rough cost breakdown:
- Purchase Price: ₦5,000,000
- Shipping Fees: ₦500,000
- Import Duty (35%): ₦1,750,000
- VAT (7.5%): ₦375,000
- NPA, CISS, and ETLS Fees (3.5%): ₦175,000
- Clearing Agent Fees: ₦250,000
- Terminal and Demurrage (estimated): ₦50,000
- Total Estimated Cost: ₦8,100,000
Tips for Reducing Costs
Compare Clearing Agent Rates: Rates among agents can vary, so finding one with reasonable fees and experience can help reduce overall costs.
- Choose Roll-On/Roll-Off Shipping: If feasible, RORO shipping tends to be cheaper than container shipping.
- Stay Updated on Policies: Government policies on import duties may change, and some temporary waivers or reductions could apply. Staying informed can help you decide the best time to import a vehicle.
- Monitor the Exchange Rate: Timing your dollar exchange for the best rate can reduce your final cost by several percentage points, especially if exchanging large amounts.
Conclusion
Importing and clearing a Honda car in Nigeria is a major investment influenced by multiple factors such as the car’s value, shipping fees, customs duties, and the exchange rate. For most buyers, working with a reputable clearing agent simplifies the process, while following the tips above can help reduce expenses. Given the high costs, many Nigerians may consider locally manufactured cars, though the demand for quality imports remains robust. For current rates and guidance on Honda cars, consulting with customs or a trusted agent can provide the most accurate advice.
