How to start buying and selling Cars in Nigeria is a good business any one can do, because Nigeria has a large population with purchasing power.
Secondly, the different ways we use Cars in modern homes show that they are necessary and not luxuries.
In this article, you will learn how to import Cars, clear and sell them for profit to enable you start your own Car selling business.
Ultimate Guide on Car Importation Business: How to Start Buying and Selling Cars in Nigeria
Okay, enough talk. Let us see how you can start this business.
Is there a Market for Imported Cars?
I started by telling you Nigeria has a large population. If we use that as a basis the market for Cars exists.
In addition, Nigeria does not manufacture Cars hence we import all the Cars we use, except for a few assembled locally and those Innoson Motors is fabricating at Nnewi in Anambra State.
Buying and Selling Cars – Do a Market survey
To begin this business, do enough research to find out the kind of Cars Nigerians love, buy and use.
This one is easy to do. Just become a traffic warden for a day in the central business districts of your city, with a pen and a note-book and count the different brand of Cars that would pass in an hour.
After a while, you will discover the most popular and the second brand people prefer.
To verify your findings, carry out a sample survey of different sections of the society made up of Teenagers, Adults, Entrepreneurs, Employed people in Public and Private Enterprises, Traders, Artisans, Farmers, etc and ask them the brand of Cars they prefer and why, to get a clear choice of the two types of Cars you can start importing.
What Are the Brand of Cars People Love?
As you do market survey for how to start buying and selling Cars in Nigeria, what should concern you is to find out the brand of Cars people love, and wish they had, and sell it to them.
From Survey, I have discovered that Nigerians love Japanese cars such as Toyota and Honda Cars.
For Toyota Cars you have Toyota Sienna, Camry, Big Daddy, Envelope, etc.
For Honda Cars, you have End of Discussion, Honda Baby Boy, Honda Ala and Bullet.
For high-end Cars, they prefer Mercedes-Benz, BMW, Range Rover Sport and Ford.
Why Do People Buy Cars?
To build a profitable business importing cars, ask yourself this question. Why do people buy Cars?
People get Cars for different reasons but mostly for comfort, transportation, for moving goods, for prestige, due to easy access to spare parts, because they are strong models, fuel economy, because they are easy to repair and for pure luxury.
How to Source Cars Cheaply For Importation
You can buy direct from online Car Dealers Websites, e-bay Auctions, Auto Auctions, Yahoo Autos, etc. Use their Websites to get the exact amount it will cost to buy and Ship Cars to Nigeria.
What are the Costs You Pay to Import Cars into Nigeria?
As you think about how to start buying and selling Cars in Nigeria, note that the costs you pay to import Cars will decide how profitable the business turns out.
Secondly, the costs for importing Cars into the country differ according to the brand of Car, year of manufacture, model and engine size.
The costs you will incur from country of origin to Nigeria for importing Cars include:
auction fee if you buy through an Auction process abroad
shipping cost of Car to Nigeria payable to the foreign country
clearing and port charges
custom duty, custom levy, and VAT
commission payable to Shipping and Clearing agents
charges you will pay to the Shipping Company at delivery point
Rules for Importing Goods into Nigeria
The Nigerian government insists that to import goods into the country you must first open e-Form M.
Secondly, e-Form M is valid for 6 months except for the one you open for importing plants and machinery which is valid for 1 year.
Thirdly, you should mark supporting documents as Valid for Forex or Not Valid for Forex remittance.
Fourthly, all applications for goods subject to destination inspection shall carry a prefix “BA” to the Form M, and those exempted from destination inspection “CB”.
In addition, “Any person intending to import physical goods into Nigeria shall in the first instance process the e-Form M through any Authorized Dealer Bank irrespective of value and whether or not payment is involved”
Nigerian Import Duty and Levy
As you start your Car buying and selling journey, note that importation of new and used Cars attracts Import Duty and Levy. Duty increased from 20% to 35% while Import Levy has gone up from 2% to 35% making a total of 70%.
Car Importation Process – How to Import Cars in Nigeria
Your importation of that Car starts here. Go to your bank and open an e-Form M.
Note that there is prohibition from importing used Cars manufactured more than 15 years ago. This means you can only import Cars that are fifteen years or less.
Requirements for opening e-Form M.
Documents Needed for Getting the e-Form M in Nigeria
Submit these documents to an Authorized Dealer Bank for processing. They are:
registration of business name and certificate of incorporation
tax clearance certificate
tax identification number (TIN)
registration with Federal Inland Revenue Service
valid email address linked to your Tin number
authorized dealer bank to process the e-Form M
When you present these documents, the bank will process it to find out whether they are complete, authentic, meet the set standards, to enable them accept and open the Form M or reject it and return it to you for rectification.
If the bank accepts your Form M application, they will send it to the Scanning Service Provider and the Nigerian Customs Service for approval with the following documents: Pro-forma Invoice, NAFDAC and SONCAP Certificates were applicable, etc.