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Abu Dhabi, UAETuesday 18 September 2018

Should UAE expats ship their car home when they relocate?

The decision to ship or sell before you go depends on how much it costs as well as whether it passes regulations in your country

Illustration by Alvaro Sanmarti
Illustration by Alvaro Sanmarti

For UAE expats relocating to their home countries, a big decision can be whether to take their car with them or sell before they go.

According to ServiceMarket.com, choosing the best option financially comes down to the countries you are shipping to.

“Some countries have regulations that do not allow the import of certain types of cars,” says Obed Suhail of ServiceMarket. “For example, left hand cars cannot be exported to India.”

While shipping a car with GCC specifications to any country within the GCC should not encounter any issues, Mr Suhail says shipping to European countries can be complicated.

“Your car would have to go through a process to determine if it complies with the rules and regulations of that country. Your registration approval also depends on other factors such as the acceptable exhaust emission levels in Europe.”

One of the biggest factors to consider for all shipments is the import taxes and duties that could be applied to the import of the car.

According to ServiceMarket, there are hefty expenses applied in some countries such as India where expats have to pay more than 125 per cent of the value of their car in taxes and duties. Those shipping to the Philippines pay up to 150 per cent of the value, while Pakistan attracts fees of between 15 to 80 per cent.

Graphic by Alvaro Sanmarti
Graphic by Alvaro Sanmarti

Tax rates are very low in countries such as the United States (2.5 per cent) and Kuwait (5 per cent).

“What’s more, many people don’t know that no taxes and duties will be applied if they are relocating to Europe,” says Mr Suhail. "Taxes and duties are not applied if you are relocating to Europe and taking your car as a relocation good. However, should you ship your car without moving to Europe yourself or if a European is importing a car from the UAE, taxes and duties will be applied."

Many shipping companies that handle relocations from the UAE allow cars to be loaded into a crate with the household items.

This was the route taken by Shaun Mahoney, an engineer from the UK, who divides his time between the UK and Abu Dhabi.

He shipped a 2013 Range Rover Sport to the UK in January last year, along with the contents of his former home in Dubai at a cost of Dh20,000.

“It was part of a big crate that had all my furniture in so it was pretty cost effective. We needed to have owned the car for at least a year before we could export,” says Mr Mahoney. “The other fees involved were a deregistration fee in Dubai and a registration fee in the UK of £80 (Dh394) and £350 for a UK conformity from a DVLA approved garage.”

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Mr Mahoney says one of the main advantages of shipping the car was that its resale value is about £10,000 higher in Europe than if he had sold the car here.

But he says the process has not all been plain sailing. When he drives the Range Rover in the UK, he is now sitting on the wrong side of the car because motorists there drive on the left side of the road. Plus, he had to make a few adjustments to ensure it was compliant with regulations in the UK.

“The car had to show mileage rather than kilometres and the lights had to be pointing in the right direction as I was driving on the other side of the road,” he says. “Both of these could be adjusted digitally in my car but for other older models it’s not so straightforward.”

Bill Carter, chief systems and innovation officer for Autodata, a Dubai-based automotive data supplier says one of the biggest problems expats shipping to Europe may face is whether their vehicle meets “EU type approval codes”.

“Many of the cars for sale in UAE do not meet the latest Euro emissions regulations and so cannot be imported,” he says. “Some are still using Euro 2 or 3 engine specs whereas Europe is now on Euro 5. There may also be problems with safety systems as many cars here only have one air bag.”

Mr Carter says residents can check if their car meets European regulations by the marking on the identification plates on the vehicle.

“If it meets Euro standards it should show E11,” he says.

Another issue he warns about is that it may prove difficult to get spare parts.

“GCC cars are built to suit a super-hot climate and so if engine cooling, filtration and air conditioning systems need to be updated, parts may not be available or will have to be ordered.”

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Mr Suhail says those considering shipping should remember that in some regions, like Europe, you cannot sell the vehicle for 12 months after it arrives in the country.

For those where the import taxes and duties are very high, he advises buying a car when you arrive. However, if your car costs more in the country you are moving too, then it is advisable to take it with you.

“In many cases shipping your car can save money. You might also prefer shipping if you have a vintage car or won’t be be able to find the same make and model where you’re going. But more often than not, you’d be better off selling your car instead of shipping it,” Mr Suhail says.

And for all those UAE residents who enjoy taking their sports cars to European cities for the summer, there are financial benefits for short stays, too. According to Seabrook Cargo Services, those who plan to stay in another country for less than a year do not have to pay import taxes and duties on car shipping.

“You can export your vehicle with a Carnet De Passage, which means that you are taking your vehicle along on a temporary basis and will return it to the UAE within 12 months,” says Mr Suhail. “There are more than 75 countries around the world where you can leverage a Carnet De Passage to avoid paying VAT and duties. You can request a Carnet De Passage from the Automobile and Touring Club in Dubai.”

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