If you are considering importing a vehicle from another city or country, you must take some necessary steps. One of them is a pre-shipment inspection. This ensures that there was no damage to your vehicle during the shipment. It also allows you to sell your vehicle afterward if you want. An inspector will check your vehicle’s age limit, roadworthiness, odometer readings, and radioactive contamination. But why is there a need for pre-delivery inspection, and what does it entails? This article will explain the automotive pre-shipment procedure to you in detail.
Overview of pre-shipment inspection
Pre-shipment inspection (PSI) is a quality control procedure carried out by agencies, buyers, and suppliers. This step ensures the vehicle imported or exported meets quality and safety standards. An inspector checks newly manufactured vehicles before shipping, as the law also requires these inspections.
The purpose of pre-shipment inspections includes checking the vehicle for defects and quality. It also ensures the car meets the destination market’s safety requirements and helps prepare import and billing reports.
Typically, pre-shipment inspections include vehicle performance, functionality, durability, dimensions, appearance, and an inspection report.
Introduced in 1994, the pre-shipment inspections agreement improved international trade standards under the General Agreement on Tariffs and Trade (GATT). The World Trade Organisation (WTO) later replaced the GATT.
An Agreement on Pre-Shipment Inspection includes several obligations stating inspection should follow the following principles:
- Protecting confidential business details.
- Avoid delays.
- Price verification is based on identical vehicles’ prices in the country of exportation so the exporter can explain the charged price.
- The appeal procedures results by inspection agencies should help other exporters.
Why is there a need for a Pre-Shipment Inspection?
The pre-delivery inspection takes place before the vehicle ships to learn if there are any damages to it during the manufacturing process. An accredited agency will perform a review when the manufacturing process is 80% completed.
This helps take the right action before shipping the vehicle. Repairs will be made if there are any defects before the vehicle gets to the buyer. This aids in avoiding costly import risks.
This also ensures the proper functioning of the vehicle before delivery. Pre-shipment inspections are also necessary to help get warranty claims and enhance customer satisfaction. After a successful examination, the inspection agency issues a report which will accompany the vehicle to its destination.
How does automotive pre-shipment inspection work?
The automotive pre-shipment inspection involves carrying out a vehicle inspection in the country of export before shipping. You’ll have to schedule a PSI and get the price quotation. The inspection agency will provide a qualified inspector to examine your vehicle. Once the inspection completes, they will generate a pre-shipment report.
A PSI also includes an assessment of the vehicle invoice and documentation before getting an accurate valuation and customs tariff code. Combined with the valuation and customs tariff code, the destination country’s duty rates will help calculate the correct taxes payable and duty rates.
Next, the inspection agency will issue an inspection certificate to validate the full duty payment before clearing your vehicle.
Checklist for Pre-Delivery Inspection
An inspector will check your vehicle for legal compliance during a pre-delivery inspection. If done correctly, this can save you money and prevent other issues down the road.
To go through your vehicle assessment, the inspector will review a checklist. You’ll also have to sign a document confirming the inspection. Following are the components for automotive pre-shipment inspection.
Interior of the vehicle
The inspector will check the vehicle’s interior to ensure the inside functions and components work correctly. Inspection will include:
- Check whether the vehicle brake and gas pedals function correctly.
- Assess wheel alignment.
- Make sure the audio, video, and Bluetooth functions operate correctly.
- Check for fuse installation for electronic functions.
- Ensure lubrication of locks, hinges, and latches.
- Look for clock presets and radio station adjustments.
The exterior of the vehicle
The inspector will check the vehicle’s exterior to ensure its body and components are in good condition. Inspection will include:
- Check for scratches, dents, rust, and loose trim.
- Look for paint condition, weatherstrippings, and bumper molding.
- Inspect washer fluid level and windshield wipers.
- Ensure tire pressure settings are according to the manufacturer’s recommendation.
- Examine whether brake, tail, head, and fog lights have the correct aim and operate well.
- Ensure the windshield has no cracks.
The inspector will check for the vehicle’s underside to ensure its exhaust system and brakes function correctly. Inspection will include:
- Examine suspension, exhaust system, lines, and hoses.
- Ensure brakes function well.
- Ensure oil examination for all-wheel drive vehicles.
Vehicle engine compartment
The inspector will assess the engine compartment for lubrication, battery, and issues. Inspection will include:
- Ensure that the fluid level for coolant, brakes, transmission, and power steering is correct.
- Make sure the hood latch has lubrication.
- Examine the battery to ensure it has full charging.
- Look for visual defects and abnormal noises.
The inspector will check the roadworthiness of your vehicle by test-driving it for five to fifteen miles on the roads. He will look for any defects in the following components:
- Wheel alignment.
- Lane departure warning.
The inspector will also check the error diagnostics on the computer.
Pre-shipment inspection document
After the inspection, the inspector will write a comprehensive report on the vehicle examination results. The information will determine whether there were any defects in the vehicle during the inspection and, if there were, how they were fixed. Further on, the vehicle buyer and the salesperson will both receive the inspection report to sign.
Advantages of Pre-Shipment Inspection
In most countries, the local customs require pre-inspection certificates to allow the import of vehicles to protect the safety of consumers. Whether you are importing or exporting vehicles, pre-shipment inspection offers several benefits. They include:
Avoids regulatory hassles
A pre-shipment inspection eliminates the hassle of last-minute checks. Furthermore, with the help of inspection reports and certificates, you can adhere to regulatory laws and avoid costly fines.
Avoid costly reworks
The manufacturers only conduct a pre-shipment inspection after completing 80% of vehicle production. This ensures there are no costly reworks required.
Reduces illegal imports
PSI reduces illegal imports of vehicles in the country of export before shipment. For instance, if a car doesn’t comply with the destination country’s emission rules, the inspection will expose that issue.
Aids economic decision-making
PSI helps create a vast database of information, which, if supplied to the Client Government, aids in economic decision-making.
Protect business reputation
Pre-shipment inspection will protect your business reputation if you are a vehicle supplier. It will ensure you only send your clients a safe and quality vehicle.
Prevent monetary loss
Once you conduct a pre-shipment inspection, you can reject low-quality or defective vehicles, preventing monetary loss.
Rapid customs clearance
Failure of importers to comply with import regulations can hinder trade facilitation. But a pre-inspection certificate will ensure the importer complies with rules allowing for rapid customs clearance.
Maintain duty revenue collection
Compliance with WTO is mandatory, but without PSI, countries with a PSI Agreement experience trouble maintaining duty revenue collection. But pre-shipment inspection ensures complete implementation of the PSI agreement and maintains the duty revenue collection.
How much does a pre-shipment inspection cost?
The cost for PSI varies based on the inspection scope and level. A basic inspection price can range between $100 and $200 and involves hoisting the vehicle with hydraulic lifts and checking for leaks and damages.
A thorough inspection will cost thousands of dollars, especially if your vehicle is a luxury car. It will involve a complete mechanical and safety assessment of your vehicle, including checking engine compression and computer engine analysis.
A thorough inspection can also include a road test to evaluate the steering wheel and brakes.
Automotive pre-shipment inspection is essential because it guarantees the vehicle you buy complies with international regulatory and quality standards. Whether or not the state law makes PSI mandatory, pre-shipment assessment is still critical because it prevents warranty claims and costly import risks.
AFL offers export consultant solutions to address all customs clearance requirements and reduce costly delays. With a vast knowledge of current regulations, we can help prepare, revise, and correct export paperwork and get your cargo’s approval from customs.
To make your shipment process seamless, we can submit your documents to States Customs and Border Protection (CBP) on time. We can also rectify the rejection from CBP.
Our car shipping company offers both local and international services, including door-to-door pickup and delivery and insurance coverage. To learn more about our vehicle shipping or custom-clearance services, please contact us today!
Pre-shipment Inspection: Frequently Asked Questions
Where can I get my vehicle inspected?
If you buy a vehicle from a private seller, you can ask for an inspection from a qualified mechanic. Or you can also ask for an examination from a trusted automotive specialist familiar with your vehicle type. Additionally, an inspection company can conduct vehicle inspections in any country.
Can I get an inspection if I am buying a used car?
Yes, this is a pre-purchase inspection. But if you buy a pre-owned car, you’ll have to pay for its inspection costs.
Who carries out pre-delivery inspection?
Contracted private organizations perform pre-delivery inspections, with one inspection company carrying it out for a specific country. Usually, the exporter doesn’t pay for the examination. However, it is possible that the exporter may incur some costs associated with the inspection.
When should I get a pre-shipment inspection?
Getting a PSI is much more critical if the vehicle you buy is in another city or state and you cannot test drive the car. You can set up an inspection in the nearest place to the seller where they can leave the car for a few hours.
This will guarantee the quality and safety of your shipment transaction. If you are buying a used vehicle or one that doesn’t have a warranty, you’ll assume the risk in case of mechanical failure of the car. Therefore, having a PSI is necessary.
What does the automotive pre-shipment inspection process entail?
The importer arranges for the PSI process, but the exporter should also make the vehicle available for inspection at the origin country. An inspection company will start the assessment as soon as it gets the inspection order from the importer.
The inspection order will include the vehicle valuation, name and address of the importer and exporter, country of supply, and importer’s customs code declaration. Following are some steps of the PSI process:
- An import license is opened by the importer.
- The inspection service is informed by the importer about a pending shipment. He makes an upfront payment for the inspection or a % based on the import country’s inspection contract terms.
- In the export country, the inspection company receives an inspection order.
- After contacting the exporter, the inspection company arranges the date, time, and location.
- If the inspection is successful, the inspection company will issue a CRF (Clean Report of Findings).
- The consignee has to get the report from the inspection office. The relevant local authorities need this report to clear the shipments.
- Next, the vehicle is shipped to the import company. With the help of the CRF report plus the shipping documents, the importer clears the consignment from customs.