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So you’re moving to Barbados, or perhaps you’ve purchased a second home here. Then chances are you’re toggling between whether you should import a vehicle or purchase one locally.
You ask yourself: should I send my current used vehicle to Barbados or would buying a new one and shipping it in be a better option? Should I just spare myself the hassle and purchase one when I get there, or should I rent a vehicle on island for the period of my stay? And what makes the most financial sense?
These questions are all worthy of deep thought, especially when bearing in mind the fact that vehicles generally attract a high level of duty and taxes on import, making it a very expensive undertaking. Here are five key considerations that you need to incorporate into your thought process when weighing up costs and ultimately making a decision on whether to import a vehicle into Barbados or buy one on the local market.
1. Imposts
In addition to the import duty and value added tax (VAT) normally levied on goods, your vehicle will also attract an additional excise tax. Excise tax varies depending on the engine size and value of a vehicle, and in the presence of import duty and VAT, accounts for a hefty tax imposition. In some instances, the imposts can be as much as 200% of the customs value of a vehicle.
Let’s take for example that you choose to import a conventional small car with a customs/CIF value (Cost of Vehicle + Cargo Insurance + Freight) less than $45,000.00 BDS. The import duty would be 45%, VAT 17.5% and the excise tax would amount to 46.95%. Therefore, the total percentage to be paid in duty and taxes would be a whopping 150.37% of the CIF value of the car.
A pleasant compromise in this case would be getting access to the established renewable energy and energy efficiency incentives, which grant reduced impost rates on hybrid, solar-powered and electric vehicles.
Let’s take for example a real-life scenario where the total percentage paid in import duty and taxes by an importer for a Nissan Serena hybrid van was 81.3% of the CIF value. Comparing this to the 150.37% tax imposition on the conventional small car in the previous example, illustrates why it may be to your benefit to consider a hybrid, solar powered or electric vehicle if you are set on purchasing a new motor vehicle and importing it into Barbados.
2. Concessions
Before you consider whether the import duty and taxes you will have to pay on import outweigh the cost of renting or buying a vehicle locally, you should first investigate whether you qualify for an exemption.
Are you a Barbadian returning national who qualifies under the Barbados Networkers Programme? In this case your vehicle, whether used or new, will be allowed into the country free of all the import duties and taxes normally applied. As a qualified returning national you are also given the option to purchase a duty-free vehicle from a local car dealer after you have relocated to Barbados.
Diplomats are another category of individuals that are allowed to import vehicles free of duty and taxes.
If neither of the above two apply in your case and you have purchased a property on a real estate community development project, you should investigate whether the particular project carries a concession for one vehicle per household. Similarly, if you are an expat coming to Barbados to work on a project, you should also explore the possibility of the project having been awarded a duty concession for the import of vehicles to be used by foreign managerial staff during the period that the project is active.
In these cases, whether or not you intend to sell the vehicle is worthy of consideration since with such concessions you may be given a specific period, for example three or five years, during which you are prohibited from selling the vehicle. And if you decide to make the vehicle available for sale during the restricted period, you will be required to pay the duty on the vehicle’s residual value at the point at which you are selling it.
3. Vehicle Age
Your vehicle must be four years or under with an odometer reading of 50,000 kilometres or less. Vehicles outside of this range are not allowed entry into Barbados, unless classified as vintage, antique or classic. There are clearly defined age brackets for these three classifications and the vehicles must also meet a number of other requirements in order for importation to be allowed. See the rules governing the importation of vintage, antique and classic vehicles here >
There are no vehicle age or mileage restrictions for qualified Returning Nationals or diplomats.
4. Vehicle Specifications
Is your vehicle a right or left-hand drive?
Although some may argue that since Barbados drives on the left side of the road, using a left-hand vehicle will call for quite an adjustment, you should give more merit to the fact that left-hand vehicles are not popular in Barbados—the vast majority of vehicles are right-hand drive. Therefore, if you imported a left-hand vehicle you more likely than not will run into difficulty having it sold if you had plans on doing so in the future.
Will parts be available for your vehicle on island?
Consider that in a small marketplace like Barbados, the range of vehicle models is significantly less when compared to larger countries. Furthermore, vehicle specifications are usually differ from market to market. So if you bring your car in from abroad, you may have an ongoing challenge of trying to find parts on the local market especially as the vehicle ages. Having said that however, on the flip side of the coin is the fact that in Barbados the cost of motor vehicle parts can be astronomically high. Therefore, in order to cut costs, you may still end up having to purchase your required parts overseas and have them shipped in.
If you anticipate that this will be a stressor for you, it may be best to default to the place where you can get warranties taken care of, or consider buying a second-hand vehicle on island where you can be certain that the parts would be available albeit expensive.
5. Period of Residence
How long do you intend to stay in Barbados?
If you will only stay for short, week-long periods of time, which may be the case if you’re a second home owner, it may be more cost effective to work out a rental agreement with one of the many rental car companies on island. On the other hand, if you are staying for longer periods or indefinitely, it is in your best interest to determine if the import fees for the particular vehicle you are considering outweigh the cost of buying or even leasing one locally.
Determining whether to bring a vehicle to Barbados or buy one locally depends on your individual needs; there is no one correct answer for the lot. Before you make a definitive decision, take a look at your cost tradeoffs. If you are leaning more towards importing a vehicle, pay close attention to the age restrictions and the heavy import duty and tax imposition that you will most likely face.
And if after weighing up everything you do decide to ship a vehicle in, be mindful that you need to apply for an import permit from the Barbados Chamber of Commerce before shipping and you also consider purchasing marine cargo insurance to safeguard against any loss of your vehicle in transit.
WRITTEN BY DR. NAKITA HAYNES
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