Insurance and Gray Import Vehicles

SHADES OF GRAY
(Insurance and Gray Import Vehicles)

While the term “gray market” is more often heard in the UK than the USA, in both countries it refers to the practice of individuals importing goods (especially cars) from other countries, generally for personal use. While the phrase may make it seem like an illegal practice, it’s really not. It’s just a way for auto enthusiasts to gain access to models – both new and used – that are not readily available from home-based dealers.

The largest such import market is Japan, with thousands of cars being imported to the UK each year, though there are Japanese imports into the USA as well, generally models like Honda cars (Acura) Integra, which is no longer produced AT ALL, though there was a toned down version of it available in the United States for many years.

Import laws vary widely within the USA, with Federal regulations layered on top of State restrictions, while in the UK there is, at least, less variance from region to region. In both countries, however, the larger issue is this: how do you go about insuring a gray market import so you can legally drive it on the street?

Insurance in the USA

The largest issue with insuring a Japanese (or any other kind) of gray market import in the USA is that in order to qualify for daily driving, the car must meet specific safety requirements. There have been companies that brought over imports and modified them, just for the enthusiasts who were willing to pay the price.

One such company is MotoRex, which has been in operation since 1998, and specializes in the Nissan Skyline. They actually offer a search service, and will, for a fee, FIND the Skyline GTR of your dreams in Japan, import it, and modify it to the required safety specs, then advise you on insurance sources. They also offer replacement parts, and aftermarket modification parts, designed to work with the Skyline.

Once an import has been brought up to required code, you can approach any insurer who handles sports cars, and talk to them about car insurance, but you should plan to pay sports car prices. Making a car safer does not, after all, shrink the engine, or diminish the capacity for speed.

The other option, if you can commit to driving your gray market import only on special occasions or at car shows or races, is to contact a specialty insurer. These companies offer insurance coverage for rare, unique, and exotic vehicles, and while they do have usage restrictions (annual mileage limitations are as high as 10,000 for some, but most max you at 5,000 or lower), and require that the insured parties be twenty-five years old, or older, and have scrupulously clean driving records, they are often less expensive than standard insurance policies. The other advantage of using a specialty insurer is that most base their coverage on “agreed-value,” rather than actual cash value, so any modifications, as well as the uniqueness or rarity of your car will be taken into account (though an appraisal may be required.)

Insurance in the UK

In the British insurance industry, imported vehicles are divided into three classifications:

• 4×4 Imports such as the Isuzu Big Horn, Mitsubishi Pajero, Toyota Prado, and Toyota Surf
• Grey MPV Imports including Mitsubishi’s Delica, Nissan’s Largo and Serena, and Toyota’s Estima, Hiace, and Lucida

• Performance and Sports Imports like the Mazda Eunos, Nissan Skyline, Subaru Impreza and Legacy vehicles, and Toyota’s Celica and Supra

As in the USA, there are car importers who will do all the paperwork, including finding the car to be imported, for you, but most don’t offer much assistance with arranging insurance. There are two options for you to consider:

1. Parallel Imports: These cars are modified (but not highly so) versions of vehicles already available within the UK, and are right-hand drive. They’ll have to have either a category one or two Thatcham security device installed, but since the base versions of such cars at least appear in the insurance databases, finding coverage will be possible.

2. Specialty Brokers: While some larger insurance companies are now insuring some Japanese gray imports, it’s still extremely difficult to do so without contacting a specialty insurance broker. Fortunately, as the demand for imports increases, so, too does the number of brokers who handle these cars.

Whichever country you live in, insuring a gray import vehicle, whether it’s from Japan, or anywhere else, is possible, but challenging. Be prepared to spend time researching specific carriers, and asking probing questions, and don’t be surprised if appraisals or documentation of any and all modifications are requested.

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