Consider this before buying a car at an auction

On June 11, Hong Kong will host its first classic car auction. On the block is a wide variety of cars from the sleek 1960 Mercedes-Benz 190SL to the 1981 Ferrari 308 GTB. This auction will surely bring a fair amount of interest to classic and antique car lovers and collectors. The impending auction highlights an emerging trend in the city that is seeing an increasing number of car lovers seeking out their dream cars at auctions around the world. If you are considering buying a car at an auction in Hong Kong, or overseas, here are some important things to remember.

Buying a car at an auction in Hong Kong

First, it is important to note that in order for any car to be considered road-worthy in Hong Kong, it must be a right-hand drive. If you are at an auction and see a left-hand drive car you will not be able to register it with the government and then secure insurance to drive the vehicle without modifications being made to the vehicle first. You can still own a left-hand drive car, but you just won't be able to drive it on Hong Kong roads.

Secondly, it is important that before you start to bid on a car you ensure it is roadworthy, if you plan to drive it. Most auctioneers will publish the information on the cars that will be on the block well ahead of time. If you are serious about a car be sure to look into details like:

• The condition of the engine, parts, and body - Because many car auctions are for classic cars, or cars that have been impounded it is important to know ahead of time the condition of the car and parts.  

• The history of the car - While this is extremely unlikely, we have seen cases in other countries where a car goes up for auction only for the new owner to find out that there were outstanding tickets against the car. If this is the case in Hong Kong, the new owner will be liable for the tickets or fines. To avoid this, it would be advisable to ask either the auctioneer if they have secured a Certificate of Clearance, or to secure one yourself. These are free, you just need to fill out this form and take it to a Transport Department location.

• The status of the car - What we mean here is that some auctions include classic cars that have been restored. If this is the case, and you are looking at a car that has been completely restored with new parts, it may be technically deemed as a new car, which could leave you open to the First Registration Tax. The auctioneer or current owner should be able to confirm this.

Finally, once you purchase the car, you are going to need to get it registered with the government should you want to drive it. This process is exactly the same as buying a used car in that you are going to need to get the vehicle examined by the Transport Department to ensure it meets Hong Kong's road rules and you will need to sign and file the Transfer of Ownership documents.

If you don't plan on driving the vehicle, it is advised that you still file the relevant paperwork including the transfer of ownership documents. One thing to be aware of in Hong Kong is that if you purchase a classic car, older than 20 years, you can apply for what's called a Moving Permit. This permit, available here, essentially states that you can move the car from it's storage location to a classic car club location and back. It is important to note here that you will need third-party insurance in place before moving the vehicle for the permit to be issued.

It would also be advisable to contact the Transport Department should you have any questions.     

Buying a car at an auction overseas

Hong Kong is not exactly overrun with car auctions which means that some people have turned to auctions in neighboring countries, or even overseas to source their vehicles. For example, we have seen people going to Japan to secure classic or rare Japanese cars that are not available in Hong Kong. If you are planning to do this, there are a number of things you should know.

Unlike buying a car in Hong Kong (new, or second-hand) there are a few extra steps that are required for purchasing cars overseas. Before we look at these, it is important to note that all cars imported into Hong Kong are required to be right-hand drives. Left-hand drives are allowed into the country, only if the vehicle will not be driven.

Before you attend an auction overseas it would be a good idea to be aware of the requirements for cars in Hong Kong. What we mean by this is that the city has certain safety requirements that must be met in order for a car to be deemed road worthy and allowed to be driven.

There are a lot of things to be aware of here, some are quite quirky. For example, Chapter 374 F of the government's Road Traffic Safety Ordinance states that cars manufactured before 1964 are exempt from having seat belts. But, it goes on to state that all cars registered in Hong Kong after 1996 with back seats must have seat belts. This essentially means that you don't legally have to have seatbelts in the front of a car made before 1964, but you do in the back (Kwiksure strongly implores wearing a seatbelt at all times in any case).

Our staff generally recommend that if you are going to purchase a car at an auction overseas you either contact a third-party or friend who knows the Hong Kong road ordinance and examination process backwards and forwards. They will be able to advise you on whether the cars you are considering will be deemed roadworthy, or whether modifications will be necessary in order to ensure the vehicle passes inspection in Hong Kong. For more information, check out the Transportation Department's website.

Once you get the car into Hong Kong and clear it through Customs you are going to have to pay taxes. Because your car is coming from another country there is a good chance it has not been registered in Hong Kong. This means you will have to pay the First Registration Tax along with any other taxes or duties.

You will also need car insurance if you are planning on driving the vehicle. We recommend talking with our  experts here at Kwiksure. They can help you find a plan that meets your coverage needs.