How to minimize risks when buying or selling overseas

[Editor's Note: This article originally appeared in the September 2020 issue of Classic Motorsports. Some information and prices may have changed.]

There’s no question that the number of students in the U.S. taking Latin has “dropped significantly” over the past century or so, despite a plucky comeback thanks to J.K. Rowling’s “Harry Potter” books, where helpful life lessons are often disclosed in Latin, such as “Draco dormiens nunquam titillandus,” which translates to “Never tickle a sleeping dragon.”

Still, at least one Latin term perseveres, especially in the automotive realm: caveat emptor, which means, of course, “Let the buyer beware.” Studies show that unfortunate automobile purchases have been a far more irksome issue than sleeping dragons ever were. And while buying a car here in the U.S. can be an onerous task, buying a car from overseas just has caveat emptor written all over it.

Saab Stories > Sob Stories

Bruce Trenery, owner of Fantasy Junction, the renowned auto broker in Emeryville, California, has shopped the world for collector cars since he bought the business in 1976. And he has heard sob stories ever since.

A favorite: A college student on vacation in Burma bought a Mercedes-Benz 540K at a bargain price. “He had some pictures of it, and I recognized it right away as a replica, because we’d had replicas here. He didn’t want to hear it,” Trenery recalls. “It turned out somebody had a replica that they had apparently imported from the U.S. to Burma, and when he got tired of it, he sold it to this kid as an original car. You have to be careful. If it seems too good to prove, it probably is.”

That was years ago, but wherever that college student is today, he’s probably still checking the ever-increasing value of legit Mercedes 540Ks built between 1936 and 1940.

Odds are, though, that you’re more interested in, say, a nice old Mini Cooper you saw for sale online. And it’s cheap. A lot cheaper than here in the States. 

Again, caveat emptor, Trenery says. “A lot of cars that come out of Europe that are 25 or 30 years old have often been run hard and put away wet, because they were used as just regular automobiles rather than somebody’s pride-and-joy collector’s piece. Often the reason why they are so much cheaper than American versions is because they may have corrosion, common if they are from near the Alps or north of there. 

“Or, if they are from Germany,” he continues, “they may have been run on the Autobahn, where there is no speed limit. Their windshields and front bodywork may have been pitted by stones, and the rest of the car could be just kind of worn out. If it’s for sale for 35 percent less than the car would sell for here, it may not be such a great deal.”

Most new cars are shipped via ro-ro: roll on, roll off. Collector vehicles, though, tend to travel in a container. Then the box and its precious cargo can travel the world, just like nearly all other goods sold on the planet.

And there are other costs to factor in. The duty on a used car will likely be 2.5 to 2.7 percent. There’s sales tax, registration and, most of all, the shipping. There are companies that would be delighted to ship over your car in the belly of a Boeing 747, but you’re more likely to seek out the services of a shipper who will find you space on a container ship.

Having your car shipped inside a container—whether in its own 20-foot container or sharing a larger one with other cars—is preferable to the other method, called ro-ro, which stands for “roll on, roll off.” 

Yes, that’s how the vast majority of brand-new imported cars are shipped, but they sit inside a dedicated vessel that carries nothing but new cars. Your ro-ro car would ride in the belly of a regular cargo ship on a space-available basis, where it risks being hit by a barrel or two of olives or messed with by bored crewmembers, which is why it’s tough to get travel insurance for a ro-ro shipment.

So you’ll want a container for your car. But Trenery has some cautionary information about that, too. Shipping a car from California to a major European port like Antwerp in Belgium, Bremerhaven in Germany, or Rotterdam in the Netherlands might cost, for example, $2000, but shipping a car from one of those ports to America can cost more–if not double.

But shipping delays may occur due to the impact of the COVID-19 pandemic, notes Dmitriy Shibarshin, director of marketing and accounting at West Coast Shipping. “There is still a shortage of space on many ships as  ocean carriers continue to issue ‘blank sailings’”—basically, canceled trips—“in order to consolidate as much cargo onto a single ship as possible. We’re finding that we have to fight harder to get the space we need on the ships for our customers.” He adds that if a dockworker tests positive for the virus, that port may shut down for a day to be thoroughly cleaned. “Luckily, because we ship nearly 15,000 cars per year, we have the negotiating power to ensure our customers’ cars ship as promised.” 

Insurance, Sources and Allies

Insuring your car’s boat voyage is optional, and there are two types of policies offered. “Total loss” pays for the car if, say, the container falls off the ship or the ship sinks; it typically costs about 0.5% of the car’s value. Then there’s “all risk,” which covers most damage the car may endure, usually during loading or unloading. There’s a deductible, and the policy typically costs about 1.5% of the car’s invoice value.

As the young man in Burma proved, even when you’re face to face with a car, it can be a challenge to know what you’re buying. But it’s even worse to rely on photos and a description provided by the seller. “It isn’t unusual for me to gets calls like a guy saying, ‘I’m buying a car from Jakarta, and the ad is using the same pictures of an Aston-Martin DB5 that you sold in 2008, and it seems like a really good price,’” Trenery tells us.

Are there people in Europe that Trenery trusts to inspect a car and report back? “Yes, there are,” he replies. “Europe is a small place compared to here, but travel from place to place can be difficult. It’s hard to ask someone based in London to go look at a car in Bavaria.”

So what can you do? “Say you’re buying a BMW 3.0 CSL in Germany,” Trenery explains. “Go online and find a 3.0 CSL club that has a chapter in Germany. Then reach out to the members and ask them if they are familiar with the car. They might say, ‘Sure, that owner is a member, that’s a great car’ or, ‘Stay away from that one, it has rusted shock towers,’ or something. If they recommend it, at least you feel better about sending the owner your money. There’s generally a club for most everything, so there’s a good chance you can find a source.”

If you’re shopping for a premium-brand car, he adds, you may want to hire a marque-specific historian to check out your potential purchase.

An expert may also know someone who lives relatively close to the car you’re considering and, for a fee, will go inspect it for you. “Spending a little money as kind of an insurance policy is worthwhile,” he adds. 

Titles, Bills of Sale and Other Such Paperwork

Once the car is here, you’ll still have a couple of hurdles to jump: obtaining all of its proper paperwork from the seller, and then dealing with your particular state to get it on the road. Buy a car from Japan, Trenery says, and you get an odd little document that “looks like a credit card receipt.”

It’s unlikely your local DMV has an employee who reads Japanese, so you’ll need to find a translator to give you a copy in English, and it likely needs to be notarized. Some countries don’t even have titles: England has a sort of logbook that says, in so many words, “Not a title,” but that’s all you get, and hopefully someone at the DMV knows that. And sometimes you must have a bill of sale, signed by the person who last held the title. But if you’re buying it through a broker, and that last owner signed it over to them, having the broker sign the bill of sale won’t fly.

Some states are far easier to deal with than others. It’s legal (but we aren’t saying you should do it) to get the car titled in an easy state, then “sell” it to someone in a more difficult state.

Shipping specialty cars typically involves specialty shippers. They’ll stick the car inside a box and get it on a ship. But first, some due diligence will ensure that the car matches the dream. 

And, of course, there’s California. Generally speaking, in the other 49 states, a car that is 25 years or older does not have to be converted to a U.S.-spec car. In California, a car that is a 1967-or-later model has to match the specs of when that car was imported new into California. But what if the car wasn’t imported new to California? Then you have some work to do.

And then, insurance. You can try your usual insurance company, but most often the business goes to a company that’s used to dealing with exotics and oddballs. It isn’t usually that expensive, even for a pricey car, unless you want to claim it as your sole daily driver.

And then—enjoy your classic car. And don’t tickle sleeping dragons.

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