Gray Market Vehicle Importing

Buyer Beware or Legal Import?

Tim Esterdahl
Nov 13, 2015
Photographers: Courtesy of Toyota
In 2009, Jesus Escobar brought his truck to a Georgia Department of Motor Vehicle office in Atlanta to have it registered. Having a truck registered, by itself, is nothing special. What is special is Escobar’s truck is an ’03 Toyota Hilux he bought in Guatemala, Central America. According to federal standards on imported vehicles, the Hilux should have been rejected. Instead, Escobar walked off with a U.S. registration and plates. How is this possible? While it is hard to exactly pinpoint, it looks like a smattering of red tape and state laws overlapping Federal standards.
For Escobar, he has been lead to believe he has a legal truck. He says there really wasn’t much to the registration process.
“I took the truck to the import department at the airport and handed all of my paper work from Guatemala to the officer on duty. He looked at it, checked the VIN number in a computer, and checked the average price of the truck to another one just like it on the computer. Then he told me I had to pay some taxes and I did, Escobar explains. “I went to the DMV in Atlanta and they did a safety check. Also, they checked to see if it was on the stolen list. Then, they gave me all the paper work for plates and title.”
Since the DMV visit in Georgia, Escobar moved to Texas. He says he did the same process. All he had to do was pass a similar safety inspection as the one in Georgia to get it registered.
Photo 2/15   |   Toyota Hilux Diesel 013
Gray-Market Vehicles
Escobar’s story doesn’t seem too outlandish, and on the outside, it looks like he followed all the applicable rules and laws. Yet, it is far from black and white.
The gray market, as it is called by most everyone, is term used for when talking about imported used vehicles that were not originally intended for sale in the United States. Such examples include diesel-powered Land Cruisers, Nissan Skylines, and Mercedes-Benz Gelandewagens. Thanks to NHTSA and EPA regulations, imported vehicles undergo intense scrutiny, with many models being outright rejected by U.S. Customs officials. In many cases, most people don’t bother dealing with the regulations. However, imported vehicles aren’t that rare.
How often do vehicles get imported? While national records are hard to obtain, state records are easier to find. According to Adam Shaivitz, public information officer for the Texas Department of Vehicles, 343 vehicles were imported into the state in July 2015. A total of 83 of those were for members of the military – importing vehicles is pretty common for them. The rest (261 of them) were from a category called “Foreign Evidence”—imported from another country.
Many truck fans will remember the Federal Government crackdown on Land Rover Defenders. These SUVs were being illegally imported and sold for a profit. Since they were virtually indistinguishable from their American counterparts, they slipped through the cracks. Finding these SUVs and confiscating them was the result of a collaboration effort between Customs and Border Protection and several federal agencies. These agencies have a variety of different missions and rules regarding imported vehicles. Sifting through them and figuring out the best way to enforce them is a big task for Customs and Border Protection folks. Since there is a variety of rules and regulations (see: red tape), every once in a while a vehicle slips through like Escobar’s Hilux.
Photo 3/15   |   Toyota Hilux Diesel 010
How the Process Works
Officially, imported vehicles must pass several barriers to be legally imported into the U.S. The Texas DMV manual has an entire chapter devoted to these rules and they basically boil down to:
• Passing EPA Emissions Testing
• Passing Federal Motor Vehicle Safety Standards (FMVSS) developed by the National Highway Safety and Transportation Agency
• Paying a Gas Guzzler Tax (if applicable)
• Proving Legal Ownership
On a side note, EPA emissions and FMVSS tests only apply to vehicles less than 25 years old. Once a vehicle passes that age threshold, it can be imported on a permanent exempt basis.
Escobar says his truck passed all of these steps. Let’s take a closer look at how he was able to do this:
EPA Emissions Testing – It is pretty common knowledge that the U.S. has some of the strictest air quality standards in the world. While the rest of the world is catching up with the latest round of Euro 6 air quality standards, they have been well behind for quite some time. How then could an ’03 Toyota turbodiesel engine intended for Central America pass emissions testing? Simple: state law. In Texas and in Georgia, they exempt vehicles with diesel engines.
FMVSS Standards – The next hurdle would be FMVSS standards. These standards are minimum safety performance requirements for motor vehicles. Items like bumpers, seat belts, proper safety glass, headlights, etc. These standards differ from International UN safety requirements and are a significant hurdle to overcoming the importation of vehicles.
Frankly, we don’t really have an answer. For this story, we reached out and contacted the NHTSA, the state of Texas DMV, and several other sources. Everybody said the Hilux has a litany of items that don’t meet FMVSS. Simply put, it should not have passed.
Gas Guzzler Tax – This was the tax Escobar referred to paying.
Proof of Ownership – These are the documents Escobar provided to the import official.
Is Escobar’s Truck Legal?
The question then remains: Is Escobar’s truck legal? From Escobar’s point of view, he followed the rules and was given a title. Yet, if you dig closer into the rules, the truck doesn’t pass the FMVSS and therefore isn’t “legal.” How does a non-legal truck get a registration?
“Just because it has a title doesn’t mean it is legal,” said Matthew James Scott, an Australian who unsuccessfully tried to import his vehicle into the U.S.
Scott spent quite a bit of time looking into how to import his Australian vehicle into California and ultimately figured it couldn’t be done. After going through the process, doing extensive research, and learning first-hand from friends who had their Land Rover Defenders impounded, he is well aware of the various import laws.
He says it seems like Escobar’s truck slipped through the cracks and was likely titled either due to clerical error or oversight.
“The key thing here is that issuing a title does not mean it is legal, nor does it constitute an official import,” Scott says. “That vehicle is technically not legal and the EPA/DOT will crush or demand export if they get wind of it.”
Photo 4/15   |   Toyota Hilux Diesel 016
Making It Legal
While the FMVSS regulations put a stop to the importation of many vehicles, there is a way around them. In order to do this, you will need to find a NHTSA-licensed vehicle importer and spend the thousands of dollars to bring the vehicle up to minimum specifications. This could mean replacing bumpers, moving lights, and a host of other things. Importers like these are how many mid-’90s G-wagens and Laforzas got into the hands of Palm Beach’s elite. While those customers do this, many people can’t or won’t.
The cost is the biggest factor working against this idea, as you may still encounter a Customs official who doesn’t agree with all of your modifications. Spending thousands without a guaranteed outcome is beyond risky.
Another way around this requirement is to get a letter from the manufacturer stating the vehicle meets FMVSS. We talked with numerous people who all said, “Good luck with that.” Asking a manufacture to put their reputation on the line for you to import a vehicle just doesn’t happen.
Photo 5/15   |   Toyota Hilux Diesel 008
Buyer Beware?
Escobar currently has his Hilux listed for sale for $15,000. It has a 2.8L turbodiesel engine, five-speed manual, fully boxed frame, manual locking hubs, RS5000 Rancho shocks, a Warn 8,000-pound winch, and new tires. In short, it is an off-roader’s dream rig. Yet, is it a safe buy? The facts are nobody could give us a straight answer. It is certainly risky since a phone call to a customs agent could result in it being crushed like those sting-operation Defenders. However, Escobar has owned it for years in the U.S. It is certainly a “gray” area.

POPULAR TRUCKS

MOST POPULAR

Subscribe Today and Save up to 83%!

Subscribe Truck Trend Magazine

Subscribe to:

Truck Trend
Magazine

PRINT DIGITAL
Subscribe Diesel Power Magazine

Subscribe to:

Diesel Power
Magazine

PRINT DIGITAL
Subscribe Truckin Magazine

Subscribe to:

Truckin
Magazine

PRINT DIGITAL
SUBSCRIBE TO A MAGAZINE
CLOSE X
BUYER'S GUIDE
SEE THE ALL NEW
NEWS, REVIEWS & SPECS