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Blacks & Whites of Grey Imports

Blacks & Whites of Grey Imports

Pitfalls of importing your own boat

 

With shipping costs at rock bottom, importing US boats remains an attractive option even with a stronger US dollar. In this digital age, it has never seemed easier to buy a boat abroad. Peer-to-peer, auction and broker websites are teeming with new and second-hand boats for sale at seemingly unbeatable prices. Most Australian shipping experts now advertise specialist boat import services to try and ride the wave of what is known as “grey”, or parallel, imports. But is there really any such thing as a cheap boat? Let’s find out.

 

Realistic budgeting

You will need to factor in a number of additional expenses before deciding if that cheap boat really is a bargain. Shipping costs, transit insurance, 5% import duty, port dues, quarantine inspection fees, and possibly the cost of a custom-made shipping cradle all have to be included, as well as 10% GST on the price of the boat and on all the costs above – that’s right! Although there is no import duty for boats both made in and shipped from the USA or New Zealand, you still have to pay GST on the total cost, irrespective of the boat’s provenance. Trailers, refrigeration and air conditioning systems all require separate import permits, further adding to the expense. There is also the risk and expense of having the boat detained and sanitised by the Australian Quarantine and Inspection Service (AQIS) after a failed quarantine inspection. (Renewing the anti-fouling and getting the boat cleaned inside-out and shrink-wrapped before shipping is a good investment!)

All in, your pride and joy may end up costing you a whole lot more than you thought – up to three times the purchase price for smaller boats, according to industry experts. Unfortunately, these hidden costs are not the only catch.

 

The dark reality of grey imports

Grey imports are not covered by factory warranties because they bypass manufacturer’s Australian distribution channels. Accredited dealers may not service these boats or even supply spare parts. These issues may affect not only engines, but also other critical and expensive equipment, such as electronic navigation systems. This negatively impacts how these boats hold their value over time and makes them potentially difficult to resell.

As the importer of the boat, you will also be personally responsible for its compliance with Australian regulations on safety, emission standards, and shipbuilding specifications – only to list a few – for the lifetime of the boat. Unless you are an expert in those fields, it is best to avoid this Pandora’s box of potential liability. In extreme cases, you may have to indemnify persons injured in an accident involving the boat.

 

Buyer beware

In many respects, buying a boat is very much like buying a car. You want to make sure it has not previously been stolen, mortgaged or scrapped, and that it is reasonably road- (or sea-) worthy. Unfortunately, there is no equivalent of the Personal Property Securities Register (PPSR) certificate for boats purchased abroad. The online boat market is notoriously full of scams, and most P2P and auction sites offer only scarce buyer protection.

The risk of unknowingly buying a storm damaged boat should not be underestimated, as is the risk of buying a repossessed boat that has been poorly maintained by a cash-strapped owner.

Cheap does not mean value, and buying “sights unseen” is not advisable. You should allow for travel expenses in your budget, as well as the cost of appointing an independent surveyor at the boat’s original location.

 

Insurance and safety

Insurers limit the maximum insured value of a grey import compared to a locally purchased boat, so you may not be able to insure it for its full replacement value.

Boats should also comply with Australian standards for fuel, electrical and LPG installations. Some equipment, such as foreign VHF radios that use different frequency bands, is illegal to use in Australia. The cost of replacing these systems can be significant, and a new survey may be required after the refit is completed. Failing this, you may be denied insurance, or worse, put yourself and your family at risk.

 

Get expert advice

Before committing, make sure you hire a professional agent to navigate you safely through the importing minefield. You may also ask your local boating associations for advice.

 

The Boating Industry Association has a free leaflet available for download at https://www.bia.org.au/documents/item/37.

 

A note on trailers

Australian customs regulations require separate import permits for the boat and its trailer. All trailers must meet Australian Design Rules (ADR) requirements to be allowed on our roads. Most US-approved trailers do not comply with the ADR, and bringing them to compliance can be a costly exercise. Plan to buy one here rather than to import it with the boat.

 

By Celine Flamain

*Celine is a qualified marine surveyor for small leisure and commercial craft and a commercially endorsed Yachtmaster Offshore and RYA Cruising Instructor. She also holds a post-graduate diploma in Marine Insurance and has logged many miles as a professional and recreational skipper.

 

 

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