What is FOB in vehicle imports?
Free On Board — the price of a vehicle at the port of export in Japan, before insurance and freight are added. FOB plus insurance plus freight equals CIF, the base on which Sri Lanka import taxes are calculated.
Also known as: Free On Board, FOB price
What is FOB?
FOB stands for Free On Board — the Incoterm covering the value of a vehicle at the port of export in Japan, before insurance and ocean freight are added. For a used car, the FOB price is typically the auction-house hammer price plus auction commission, plus any pre-export reconditioning work.
The full progression from auction win to landed price:
- Auction price — what the car cleared at on the bidding floor (JPY)
- FOB — auction price + auction commission + pre-export prep + transport to port
- CIF — FOB + insurance + ocean freight to Colombo/Hambantota
- Landed price — CIF + Sri Lanka customs duty + surcharge + excise + VAT + luxury tax + business costs
For Sri Lankan buyers, the FOB number is mostly internal — the figure that matters at customs clearance is the CIF value. But seeing FOB is useful when comparing yards: an honest importer will show you the auction price (with the actual auction-house listing), the FOB after commission and prep, and the CIF after insurance and freight, all transparently.
Related terms
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CIF
Cost, Insurance, Freight — the value of a vehicle when it arrives at the Sri Lankan port, before any local taxes are applied. CIF is the base on which all Sri Lanka import taxes (CID, surcharge, VAT, excise, luxury) are calculated.
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CID (Customs Import Duty)
Customs Import Duty — the first line in Sri Lanka's vehicle import tax stack, set at 20% of the declared CIF value. CID is followed by a 50% surcharge (effectively 10% of CIF), then excise duty, then VAT, then luxury tax where applicable.
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