CAA: Carnet
 

I just went on the CAA website to look up infor for a carnet. The cost calculator returned the following results:

If I choose the guarantee option, do I need to put up the entire $27,000???

I'm not sure how this Carnet thing works.

Well...I read the Carnet FAQ. Seems I will have to pay $2,650, if I understand what I have read.

Still, doesn't this seem pricey?

If it will cost me over $2000 to travell in these countries on my bike, i'll stick to the ones that don't require a carnet, thanx! :thumbdown:
I'll be reaserching this whole carnet thing when i get home for my next trip, but it all seems rediculously expensive!

i think i understand this correctly. i have a choice of either the two option; which means i will have to either pay $9,290 or $27,650 upfront. if i choose the first option, i'll end up paying more overall after the discharge of the carnet.

regardless, either one of the two options i not possible. this is far too much freaking cash; and this puts my plan in serious question. is this some sort of joke?

I've had two carnets from the RAC in the UK over the years and both times the cheapest route to cover the non export liability was an insurance policy. On both occasions the total amount for the carnet (after refunds etc) was around about £300.

Ok, I had cheaper bikes (valued around £1500) and I wasn't going to countries with 800% import duty but that's a hell of a difference from the figure you've posted. Can't you sell your bike to your next door neighbour and buy it back with a receipt for $1000.

Unfortunately, I don't think selling my bike for a neighbour and buying it back for $1,000 would work. This is from the CAA FAQ:

Q: How do you figure out the value of my vehicle?
A: We have all kinds of books, we have on-line memberships and if we cannot get an accurate value, we will ask the client to bring his or her vehicle to an appraiser and have the vehicle appraised.

All this carnet stuff seems little confusing. I also got this from the CAA FAQ:

Q: What do you mean by purchase a bond indemnity?
A: Instead of providing the CAA with a huge sum of cash or going to your bank and getting a letter of credit issued you can purchase a bond amount for 10% the value of your vehicle plus taxes and you get 5% back when you return the discharged carnet to us.

Based on this, I would have to purchase a bond for $1,000 + tax. After returning the discharged carnet, I would get $500 of it back.

The $1,000 + tax + the CAA fee of $650 would bring the cost of the carnet to roughly $1,750; which is a lot more reasonable amount to put upfront. This amount wouldn't ruin the trip I have been planning for two years (and dreaming about for 6).

My expected departure date is August of 2011. Even before I found out about the cost of a carnet, hitting my target savings was going to be tough. A 2011 departure is already 2 years delayed from my original plan (which was really too ambitious), and I don't want to have to delay it by another year!

Those prices sound about right. If you go the garauntee, you HAVE to give them a 200% deposit, which they hold onto until you give the carnet back. If you go with the RAC in the UK, it's 800% of the value for Egypt. So you should be glad your deposit isn't $80,000.

The insurance indemnity just means you pay upfront, like normal insurance. If things go pear shaped, it just means the insurance company will front the $20,000. They will still chase you for the amount after wards though. That insurance is very high though, the RAC one is quite a lot less.

But yeah. Go insurance and you pay more overall. Go guarantee yourself and you pay more upfront. If you factor in interest of the deposit though, you actually end up paying more than you think.

FYI, RAC won't let foreign registered vehicles get a carnet. I only found that AA in South Africa would let foreign owned vehicles get carnets, and they only have the guarantee option, no insurance indemnity. I had to re-mortgage my house to get the carnet deposit... seriously. But, they don't check the cars value. We just said it was 3,700 pounds (which is what we bought it for), but they never asked for any verification.

It is a VERY expensive thing, no matter which way you do it. Maybe try source your own insurance company for the indemnity and get a better price.

2 things:
CAA uses 'blue book' values - so try Kelly Blue Book (New Cars, Used Cars, Blue Book Values & Car Prices - Kelley Blue Book) to find out what its worth. You don't have to tell them about the extras you added on.

you'll also get some of the $650 back. They charge a lump sum fee up front to cover their processing fee plus express mail and other such incidental costs that handling your application may require (maybe express costs incurred between CAA and your bank/insurer) - so whatever they don't use (they'll provide receipt of their expenses) you should get back when you return properly completed carnet at end of your trip.

Guarantee Option (Highest Priced Country for this Option: Iran)
CAA Fees
$650.00
Guarantee Required
$25,000.00
Estimated Bank Fees
$2,000.00
Total
$27,650.00
Returned on Discharge
$25,000.00
Net Cost
$2,650.00
...:thumbdown:
So, let me get this right. My bike is worth $10,000, i need to come up with $25,000 for the privlige to go ride in Iran. Then i give this $25,000 to some joker who spends a day typing up some papers, making a few phone calls and send out a couple packages through the Fed-Ex. THEN, after i return with my bike and fufill my part of the aggreement, he keeps $2650 which he splits with a BANK ???
What does the country i'm entering get? $2000 in BANKING FEES! :stormy:
This is a rip off joke! Even if the bike is worth half the value, it's still a rip-off! Why should CAA and the banks make money off another countries backwards rules?? and honestly, how can any of you guys afford to travel around the world having to front all that money??? I know your not that rich? There has to be another way...
When i enter Mexico, i pay around $32 for my permit, plus i need to front $400 as a guarantee, which i get back when i leave. This is fair, no? Same in Honduras, more or less. All the other countries in L.America require nothing more that a leap of faith :angel: Please tell me there is another way, don't some of these countries have this option at the boarder. At least i'm not paying some greedy bastard in the first world for the privlge to ride in 3rd world countries.

My sentiments exactly.

I have been gradually planning this trip for over two years now; and then I find this out!

It will be close for me to hit my target savings of CAD$30,000 for my trip, and now, after researching carnets, I find out I need to front this amount of money in addition?!?!? It will be impossible.

Now my only option seems to be to restructure my entire route to avoid the high % countries, such as Iran, Egypt, and India.

What a complete monkey-wrench.

I've already had to eliminate mainland China from my route due to the restrictions there; now this!

quastdog: I used that site that you posted last week to find the value of my bike. They listed the 2007 KTM 990 Adventure at USD$9,500.

My main concern is having to front over $9k, for the cheapest option upfront; not to mention that this option will cost me over $5k in the end just to ride my own bike through some countries.

It does seem like a big joke.

Rockwell, you're confusing me with this.
You got the cost down to 1750$ and now you're saying -
My main concern is having to front over $9k, for the cheapest option upfront; not to mention that this option will cost me over $5k in the end just to ride my own bike through some countries.

I didn't get the cost down to $1750. I came to that number only after reading the following question/answer from the CAA carnet FAQ:

BASED ON THIS, a calculate that I would have to pay:

$650 (CAA carnet fee) + $10,000 (bike value) x 10% + tax = $1650 + tax

Unfortunately, this does not agree with the cost estimate provided by the same CAA website (in my first post).

I am also trying to understand how this works. I think I either have to front $27,650 (and end up paying $2650 after carnet is returned) or $9,290 (and end up paying $5,750 after carnet is returned).

I think there is a mistake in the question/answer posted above.

It should read:

This is exactly what it says here: Carnet de Passages en Douane - Canadian Automobile Association | Association canadienne des automobilistes

The country with the highest requirement on my route is Egypt, at 800% of the vehicle value. So the calculation should be:

$650 (CAA carnet fee) + $10,000 (bike value) x 800% x 10% + taxes (excise and retail) = $8,650 + taxes

I was confused in my first several posts, but I think I have it clear now. Either way, it's too much money.

It seems my only option is to remove the high % countries form my trip, which include Egypt (800%), Iran (500%), Nepal (500%), and India (500%).

Ok, I geddit now. Don't forget to scrub Pakistan off your list as well.

The CAA doesn't get all that money.

If you can post your own bond - take your own money, put it into an interest bearing savings account, get your bank to issue a letter of credit to the CAA (which essentially freezes your access to this money until CAA releases it) you get all the money, with interest, back in your hands. My bank charged 1% ($89.00) of the value of the bond for their 'nominal cost' of issuing letter of credit. Interest on the savings account was a tad over 1%, so I made a few pennies on my money being tied up for a year.

But since you don't have the money, you have to use a 3rd party money lender - that lender charges 10% for you using (tying up) their money to cover your bond. You many consider that excessive, but its not the CAA extracting this money from you - its the loan shark getting this money. Whine all you want about the loan shark, but don't complain about the CAA. (you are free to try to borrow this money any way you can - at less than 10% interest - doesn't matter to CAA where the money comes from - put it on your credit card if you want, but then again, that's a true loan shark interest rate - just has to be 'guaranteed', as in, CAA controls access to the money.)

I think my CAA issued carnet cost just under $300 when all was said and done.

BTW - I traveled through Egypt with my 650 BMW - valued at $8,900 - and my bond was $8,900 - so don't freak, submit app form and see what they say. And yes, if you want to do Iran - your choice - it may cost you way more. (actually, I think India is most expensive country).

I am not complaining about the CAA; I'm complaining about the fact that this has to be done at all, especially at the cost involved. The complaint should be directed at the foreign countries that require a Carnet for entry. Also, money lenders are as crooked and predatory as they have always been; so no change there. I think it's somewhat of a misconception to say that lenders (big banks) are tying up their money. I have a decent understanding about how the fractional reserve banking industry works, and it does really madden me, as it should everyone, that they charge such exorbitant rates to borrow money that really doesn't even exist.

See all 5 parts:
YouTube - Money As Debt (1 of 5)

I could go on about how the entire financial industry, as it exists today, should disappear and be replaced by true credit unions, but that's an entirely different thread all together.

Although, the CAA, in providing the indemnity option, are acting as lenders. The amount that they charge is also criminal, in my opinion.

I do not have the capital to put up for the Carnet. I might think about putting it on my credit card. I have a Visa with an interest rate of prime + 1.5%, which works out to be somewhere around 3.5%. If I could put this on my card, that would be great. But, the banks will likely look at this as a cash withdrawal and likely charge the 19.95% for that. Besides, I prefer not to live off of credit. I generally make it a rule not to make purchases unless I can pay for them outright. Credit cards are for internet purchases, convenience and emergencies.

Most likely, I will have to remove Egypt, Pakistan, Iran and India from my route. This leaves me with no real choice but to stay north into Kazakhstan, Mongolia and Russia (which is not a terrible option). I have already looked into a plan to cross from Djibouti into Yemen to avoid Egypt (hoping that the US doesn't decide to invade Yemen any time soon). All this does pose a problem due to the fact that my time-line put me south in the Norther Hemisphere's winter months, but I am going to have to work around this somehow.