Legal Question in Business Law in California
Importation and Sale of Classic Cars
I want to start a business focusing in the sale of classic cars (range 1960's to 1985). Can I import those cars to the US (more especifically CA) and re-sell them? Do I have to pay import taxes? Is there any safety measures I should be aware of?
2 Answers from Attorneys
Re: Importation and Sale of Classic Cars
I suggest you interview customs brokers and agents to work with you; they are the professionals who know how to do dockside paperwork and get your cars into California without too much grief. If the cars are not to be operated on the highway, i.e. won't be licensed, the State of California will not have much to say about the process, but since you have 1960s to 1985 in mind, you probably want to operate them rather than stash them in museums, so a contact with the California Department of Motor Vehicles will be important.
As for payment of duties, re-importation of cars originally built in the U.S. should be duty-free unless they have been extensively modified overseas. Foreign-built cars will be subject to duty, possibly with exceptions for antiques which your cars probably aren't.
You'll need a state license to deal in secondhand motor vehicles.
In terms of safety, the vehicles will have to meet California road-worthy requirements and, in terms of air pollution, many will require approval or exemption from California's stringent smog-reduction laws. This is probably your toughest area of compliance.
If you are serious about this business you should line up some experts to coach you - not just a lawyer, but also a customs broker, a DMV/antique cars specialist, and an insurance agent.
Re: Importation and Sale of Classic Cars
You face substantial time and money doing what you think you want. You will have to bring them into the country under customs bond, pay all the import duties and use taxes, modify and bring them into full compliance with all DOT and EPA crash worthiness, safety and smog rules and have them officially engineered, tested and certified as such. If you can't get them certified after spending the money trying, they have to be destroyed or re-exported out of the country [violation of those rules can land you in jail]. You'll have to get a vehicle dealer's license, business licenses, etc. In the 70's and 80's when we were doing this, it cost $15-50k per car to do so on desirable cars like special edition MB, BMW, Ferrari models not available in the US. Labor, parts and certification engineering are considerably more now. A company I am familiar with spends $50k to get each of its Japanese limited production high performance cars modified and certified. Depending upon the car, whether there are similar models that already have US spec safety and smog compliance like modern Euro and Asian cars do, it could be cheaper because you might be able to use factory spec parts for the conversion instead of custom fabrication. For vehicles never certified here, expect to spend $$$. You should plan on doing one to start. How much are they going to be worth to a buyer when done? Do your research without delusions of grandeur. If you're still serious and have the funds to carry the operation for 6-12 months before first sale, paying all the legal fees, overhead costs and salaries involved, feel free to contact me for the legal help you'll need.
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