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CAA: Carnet
I just went on the CAA website to look up infor for a carnet. The cost calculator returned the following results:
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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:
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$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: Quote:
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.
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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. |
I'm curious how these guy's driving Landrovers around the world can afford it. A $10,000 bike if quite cheap in comparison. I too will scrub those carnet seeking countries off my list. Too bad, really, and if they got the money, i might consider for a moment saving up an extra couple thousand dollars, but it sounds like its not them getting the money, instead banks and third party thieves are getting it. Complete BS!! :thumbdown:
So, i would like to know what happens if you show up at the boarder without a carnet? Any other way around? Please, no answers based on assumptions, but people who have done this and their experience. I read about a guy who traveled through Africa without a carnet and claims you don't need it. Sorry, i need to search for this thread no, i'll be back later. |
Yeah...please post that thread. I'd like more info.
I can only (reasonably) ASSUME that you'd be turned away at the border if trying to enter a country that requires a Carnet, without having a Carnet. |
Carnet good
We did Germany to South Africa a couple of years ago and our most expensive country was Tanzania at 100% of the value of the bike. Egypt was actually a bit less. Total cost was near $300 plus the lost opportunity for collecting interest on the $11,000 for both bikes. That is, we paid for the carnets up front out of our trip savings and then dipped into the line of credit near the end of our trip. The fact that the CAA is now offering an insurance type option is totally new. This has been available through the RAC for ages but not here in Canada. We've always had to put out the money up front.
A carnet is really only there to make your life easier. It is a method to prove to the country you are entering that you don't plan to sell your bike there. What you could do is pay the taxes and duties when you enter the country and then try to get those funds back when you exit. So to enter Tanzania for example you could pay $10,000 at the border and when you exit you could get your money back so that you could enter Malawi and pay their duties. Perhaps, if you are a good talker, you could convince the border authorities that you have no intention of selling your bike and they'll let you enter without paying duties or having a carnet. Or maybe with a little baksheesh or a "bond"? Anyway, a carnet is really much easier. To be honest, most travellers take old or cheap bikes simply for the cost of purchasing the carnet. It certainly played a factor in my choice to take the old R100GS rather than the 1150 Adventure I had sitting in my garage at the time. I think it is unfortunate that you found out about the carnet costs so late in your research since, as you've found out, it is one of the big factors in planning for "the big trip". It affects everything from which bike to take to which countries to visit to how long you can travel to how much money to save. |
Take a KLR, DR650 or something cheaper than your KTM990.
Your route does sound amazing, seems a shame to change these plans. Cheap bikes can be easily found and parts and maintenace alot cheaper; however I am sure you researched this already as well.:scooter: |
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I wouldn't say that it's very late in my planning. I have been thinking about this for 6 years, my plan started to take shape about 2 years ago, and I still have 18 months until I plan to depart. I still have time to restructure, if needed, or figure out a way to get money down on a Carnet, or just cut out the most expensive countries to lower the indemnity cost. I have run into a number of frustrating roadblocks in my research - the Darien Gap, the inability to enter Israel (if I want to enter most Middle-Eastern countries), and the inability to cheaply enter into mainland China. Now, this Carnet issue arises. All of these things seem ridiculous in this world of what are really just imaginary borders. |
Had a chat with Suzanne Danis
I phoned the CAA after doing the online calculation for our next trip and found out some interesting information.
The bond indemnity being offered by the CAA uses the same insurance company that has been offering the bond indemnity for the RAC. This means that the bond for Egypt is now the same as for UK residents at 800% of the value of the vehicle if you opt for the Indemnity option. It is still 55% if you chose to go with the Guarantee option. I guess the insurance company has been paying out too many claims for vehicles being left in Egypt. So while the duty into Egypt is only 55% the insurance company charges 800% to recover their costs. That explains why you get two different amounts when you do the calculation, one for the insurance company and one for the true duty cost. Note that if you extend an Indemnity Bond you'll have to come up with the total cost again whereas with the Guarantee you'll only be charged a small renewal fee. In the Guarantee estimate there is a $2000 cost associated with "estimated bank fees". This is an estimate for how much a bank (not the CAA) will charge you to issue a letter of credit. This will vary depending on your relationship with your bank but $2000 should pretty well be the maximum and the minimum is probably around $100. If you send cash (or a certified cheque) to the CAA there will be no bank fees. The cost of your carnet will then only be the $550 administration fee plus the lost interest that your money could have been earning while you were travelling. I really love the new calculator. It sure beats writing Suzanne Danis and having her look up all the countries you'll be travelling through and sending a note back. The calculator is perfect for doing the trip planning and playing "What if?" scenarios. Now you can look at a map and say to yourself, "How do I go around Iran and how much would that cost?" I'll definitely be including this in a session at the 2010 HU Canada West meeting so if you still have questions, come out to Nakusp for the weekend of August 12 to 15 and we'll do our best to answer them. :D |
Here's my route, if anyone's is interested in looking at it or giving me some feedback.
Google Earth File: https://docs.google.com/leaf?id=0B9j...MmM1Mzlh&hl=en |
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I have only been looking at the percentage from the CAA indemnity fee table here: Carnet de Passages en Douane - Canadian Automobile Association | Association canadienne des automobilistes I had no idea Egypt was really only 55% if you put up your own cash. I've been adding all Carnet % requirements to my Google Earth file so that I can look at it and come up with the best solution if I cannot cover the cost of a Carnet for my desired route. Yes...the calculator is really good. I have been using it, but it doesn't reveal certain information, so I didn't fully understand how the calculations were being made. |
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By the way, the borders aren't imaginary. On the other side of that imaginary line you'll find a whole different world of cultures and people. It's the reason we travel. And every individual needs to make a decision on how badly they want to travel to that country. That country isn't obliged to let you in so they in effect have a monopoly on themselves. Iran has a monopoly on visiting Iran. You can't very well visit Kansas and say you've visited Iran. :) If you want to visit Iran then you'll have to pay what they're asking and you'll need to jump through their hoops to get in. You're in the right place (the HUBB) to do all that research that needs to get done before you go. If you want to really pick some people's brains (people who have done what you're planning) then try to make it to an HU Traveller's Meeting. You'll definitely be: :welcome: |
I guess it's a matter of perspective, and really comes down to one's personal philosophy of the world.
I have done quite a bit of traveling in my life; just not by motorcycle. Here is a quotes that I like: Quote:
I was only frustrated that these obstacles exist; but I know that there will be a day when they do not (just not likely in my lifetime). What goes on at these travelers meetings? |
I feel your pain! I have been doing similar research as a Canadian for the Middle East and Northern Africa which is how I found this forum. I've done my VISA research and got that under the belt, looked at shipping, and finally thought I was getting a hold on all the elements of this type of motorcycle travel in this area after reading about the green card and insurance info.
Then I stumbled on the Carnet de Passage info. At first I figured no biggie, but going to CAA I found out it is over $600 just for the Carnet not to mention the money you have to put up. My first reaction was 'is this a joke'! How can they be f___ing you like this... Insurance costs, shipping, visa's, temp insurance, all these costs are already adding up. I am now removing Egypt and Northern Africa route from my trip and planing to loop into the middle east and back out again, which is a shame, but I really can't afford a Carnet unless I can figure something better out. PS I like your philosophical ramblings above. Couldn't agree more. It can just be so frustration that you or I may have this vision of the world, this thought and this belief, and yet we have to work within a system that is the opposite. Aside from taking drastic measures, it doesn't seem that we have a lot of choice. |
What are you guys complaining about?
I'm getting a carnet for a vehicle that is perhaps undervalued a bit at $120,000. I'm putting up the cash for the CAA to deposit in their bank. I'll get it back, and since interest rates are so low I won't "lose" much interest over a couple of years. "Pay to play" - you can't expect to have it handed to you on a silver platter. Every country is a sovereign entity and you have to follow their rules! As travellers we find borders highly inconvenient and they cause anxiety, at least on my part. But the inhabitants of some countries like having borders, very much. Charlie |
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A lot of us work hard, but don't have that sort of money. Of course inhabitants of some countries like having borders. These are usually countries like the USA and Canada; in which we have hoarded (historians would say stolen at the barrel of a gun) vast amounts of land and resources for ourselves. We have "claimed" this land as if we have more privilege to it than any other; and the passing of time makes the claim to this land seem more official. Because of this, we have become very rich and very powerful; and we want to put up walls to keep outsiders from getting a piece of the pie. Other countries need to maintain their own borders, in part, to protect their own small share of land and resources from exploitation by the richer, more powerful countries. The system never seems broken if it works for us. |
My goodness, what rhetoric!
I was in your situation 30 and 40 years ago. I have been working most of that time. But I didn't have aspirations of abolishing borders. It does seem that there are a few more countries than the ones you named that are particular about their borders. Including some post-colonial ones. Charlie PS: don't jump to conclusions about people you know nothing about; it's not a good pre-requisite for good travelling experiences (the "silver platter" comment) |
I guess it's easier to dismiss it as rhetoric.
I don't think it was a big jump to come to the conclusion that, since you own or have access to a vehicle undervalued at $120,000, and you are able to put up the money for a Carnet for that vehicle, that you have money. It's a pretty reasonable assumption. I agree that it's not good to travel and have preconceived notions of an entire country of individuals, but this is completely different than making a reasonable assumption about someone based on information provided. If, for some reason, I am way off in my assessment of your financial situation; and you are offended by that, I do apologize. My main point is that, people who have the money to easily function in the system don't see a problem with the system. |
I just did a calculation on a bike worth $4000, skipping Iran and Egypt. The minimum guarentee that CAA will accept is $5000. Based on that, if you put up the cash, this works out to around $550, a little more reasonable i guess. Ekke, thanx for the explanation, it puts things more into perspective, although i still think that even at the cheapest option its still pretty expensive for a guy who budgets $50 a day. Forking out an extra $5550 would require some careful planning, but is much more manageable than the previous numbers. Reguarding the "Pay to Play" comment, i think the point was missed. Who are we paying to ride into these carnet countries? Does CAA send a cut to Iran for their share of the Carnet fee? If i come up with $5000, the cheapest option available, i'm paying someone $550 to hold onto it for me and write a piece of paper saying so, where as the bank pays me a small percentage for providing nearly the same service. Also, in this day of easy, fast and reliable communication, how much does it cost to do the communications and paperwork for a carnet for a trip around the world?
In Mexico, you pay around $32-$36 (can't remember now) for your permit, and then put down a deposit of $400 in either cash, or on your credit card. Your card isn't charged unless you don't leave within the alloted time. You can NEVER enter the country with another vehicle until you leave with your permitted vehicle and cancel your permit. I prefer this system to the carnet system as you pay per country, and the visited country gets the money, not a third party. There is enough incentive to leave with your vehicle, and if you do sell it. you can only ever do it once, making it hardly worth it. Maybe i should get into the carnet business to fund my travells :mchappy: ...although, if i could afford a $120k Unimog (WTF is a Unimog??), i wouldn't be worrying about all this trivial rubish, would i :blushing: BTW... i couldn't find that post i mentioned earlier about travelling in Africa without a carnet, sorry. |
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Repeat the same process at the next border. 10 countries (100% duty- try Egypt!) - $5000 bike or vehicle - you might be out $50000 and waiting a long time for 10 checks. I'd rather pay the duty bond money once, to the CAA, to be deposited in a bank in Ottawa. Charlie |
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i just calculated how much it would cost you to drive your $120,000 vehicle through Africa, avoiding Egypt. Using the indemnity option, your cost would be $15,410 :eek3:... ouch! This is unless you happen to have an extra $120,000 laying around, in which you would only pay a mer $650. Or you can mortguage your house, etc... i think you get the point. If your happy with this, so be it, to each their own. But i am not happy with forking over thousands of dollars more than my bike is worth for the privlage of riding through another country :9898: although it looks like i won't have a choice. :frown: BTW, i googled Unimog. Wow, that thing is cool! |
Yes Mexico is easy.
But many countries aren't easy. If you have just 2 choices: 1) put up a bond with the CAA once for your trip and reliably get the money back at the end of travel thru the bond-requiring countries 2) Wheel and deal at each and every border, being required to put up a bond at who-knows-where giving lots of money to who-knows-who in a uniform and trying to get it back 3 weeks later Which would you choose? Wishing it weren't so won't work faced with a guy in a uniform with an AK47. Where one gets the money for the bond depends on one's circumstances. You can come up with it in cash, "hypothetically" borrow it (with a letter of credit), or buy an insurance policy for it (indemnity option). The latter is of course the biggest rip-off. But the villain isn't the CAA; it's the insurance companies. You might argue that the guy with the $120K vehicle should pay >$550 and the guy with the $1000 old bike should pay <$550. But the amount of Suzanne Danis' time doing paperwork is the same. [url=http://www.unicat.net/en/pics/TC49compact-2.html]UNICAT I admire the bravery and audacity of you guys taking off on a rtw trip with what you can carry on the back of a bike. It's easy for me to pontificate with flush toilet, hot shower, kitchen, comfy bed... These expenses for pieces of paper must be aggravating and painful when travelling on a "shoestring". |
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http://www.horizonsunlimited.com/hub...rn-route-44089 It's a good read and recently updated. All my suspicions on the carnet system being an unnecesary, exploitive rip-off are slowly being confirmed. Now, i would like to know if Asia is possible without a carnet? |
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