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INCOTERMS (International Commercial Terms)

Standardized trade terms defined by the International Chamber of Commerce (ICC) to clarify the responsibilities of buyers and sellers in international trade. These terms specify who is responsible for transportation, insurance, customs clearance, and other logistical tasks. In car export and import, Incoterms play a crucial role in ensuring smooth transactions by reducing misunderstandings about costs, responsibilities, and risks. Understanding the appropriate Incoterms helps streamline operations, manage expenses effectively, and ensure legal compliance during the transportation process.

FOB (Free on Board)

Indicates that the seller is responsible for delivering the vehicle to the port of departure and loading it onto the shipping vessel. After the vehicle is loaded, the buyer assumes all risks and costs, including ocean freight and insurance. Why It’s Used: FOB is common when the buyer prefers to control the shipping and insurance arrangements.

 

CIF (Cost, Insurance, Freight)
Under CIF, the seller is responsible for the cost of the vehicle, insurance, and freight until the car reaches the destination port. However, the risk transfers to the buyer once the vehicle is loaded onto the vessel. Why It’s Used: This term is convenient for buyers who want the seller to handle insurance and freight arrangements.

C&F (Cost and Freight)
C&F (also known as CFR—Cost and Freight) means the seller covers the cost of the vehicle and shipping to the destination port. However, insurance is not included, and the buyer bears the risk once the vehicle is on board the vessel. Why It’s Used: Buyers who prefer to arrange their own insurance often opt for C&F.