Tax on Imported Cars: Tariffs, Fees, and Exemptions

The tax on imported cars starts with a 25% Section 232 tariff plus the standard 2.5% customs duty, which pushes the federal bill on a typical passenger car to roughly 27.5% of its value before you add processing fees, a possible gas-guzzler tax, and state sales tax at registration. That combined rate took effect on April 3, 2025, and it applies whether the car is new or used, bought from a dealer or picked up privately overseas.

The 25% Section 232 Tariff

The single biggest line on your import bill is the Section 232 tariff. Proclamation 10908, signed in March 2025, imposed a 25% duty on all imported automobiles effective April 3, 2025, and extended it to certain auto parts by May 3, 2025.¹ The proclamation states that this 25% is charged on top of any other existing duties and fees.

Age doesn’t help unless the car is genuinely old. A ten-year-old vehicle you buy overseas owes the same 25% as a brand-new one.² The only age carve-out is for vehicles manufactured at least 25 years before entry, which are exempt from Section 232 entirely.

Country of origin matters too. USMCA-compliant vehicles built in Canada or Mexico get an exemption for their U.S. content, which can significantly reduce or eliminate the tariff. The United Kingdom has a separate exemption. Everything else pays the full 25%.³

Base Duty by Vehicle Type

The Section 232 tariff sits on top of the standard rate from Chapter 87 of the Harmonized Tariff Schedule. What you owe at the base level depends on what you’re shipping:

Passenger cars: 2.5% of customs value, bringing the combined rate to 27.5% for most imports.⁴
Light trucks and cargo vans: 25% under the long-standing rate informally called the Chicken Tax, which dates to a 1964 trade dispute over European poultry imports. CBP applies unstacking rules to determine how this interacts with the Section 232 tariff, so the total for trucks may not simply double to 50%.
Motorcycles: either 0% or 2.4%, depending on engine displacement. Smaller engines generally enter duty-free; larger models carry the 2.4% rate.

Duties are calculated on transaction value, meaning the price you actually paid. If CBP considers that price unreliable or unavailable, it will use an appraised value instead. Classification matters enormously here. Mislabeling a truck as a passenger car (or the reverse) can swing the duty by tens of thousands of dollars on an expensive vehicle.

Federal Processing Fees

Two smaller federal charges apply to vehicles arriving by ocean vessel. They aren’t dramatic on their own, but they stack.

The Merchandise Processing Fee (MPF) is 0.3464% of customs value for fiscal year 2026, with a floor of $33.58 and a ceiling of $651.50.⁵ Most imported cars hit the cap. A vehicle worth roughly $188,000 reaches $651.50, and anything more expensive still pays only $651.50. A $4.03 surcharge applies if the entry is filed on paper.

The Harbor Maintenance Fee (HMF) is 0.125% of declared customs value on commercial cargo arriving by water, and the importer pays it.⁶ On a $40,000 car that’s $50.

The Gas Guzzler Tax

If you’re importing a passenger car with poor fuel economy, you may owe a federal excise tax under Internal Revenue Code Section 4064. The tax triggers when the combined EPA fuel-economy rating falls below 22.5 miles per gallon, and it climbs sharply as the number drops:⁷

21.5 to 22.4 MPG: $1,000
20.5 to 21.4 MPG: $1,300
19.5 to 20.4 MPG: $1,700
18.5 to 19.4 MPG: $2,100
17.5 to 18.4 MPG: $2,600
16.5 to 17.4 MPG: $3,000
15.5 to 16.4 MPG: $3,700
14.5 to 15.4 MPG: $4,500
13.5 to 14.4 MPG: $5,400
12.5 to 13.4 MPG: $6,400
Below 12.5 MPG: $7,700

The tax applies only to passenger cars as EPA defines them. SUVs and light trucks fall under a different regulatory category and escape it entirely, which is why a large truck with terrible fuel economy pays nothing while a thirsty European sports car can get hit with the maximum $7,700.

State Sales and Use Tax

Federal duties aren’t the last bill. When you register the vehicle with a state motor vehicle department, most states charge sales or use tax on its value. Rates vary widely. Some states impose no vehicle sales tax at all; others charge more than 6%; a handful use flat registration fees instead of percentage rates. This is separate from anything CBP collects and needs its own line in your budget.

Who Is Exempt

Vehicles 25 Years or Older

This is the exemption that matters most for enthusiasts. Vehicles at least 25 years old, measured by the month and year of manufacture, are exempt from both Federal Motor Vehicle Safety Standards and Section 232 duties.⁸² The 2.5% base HTS rate for passenger cars still applies, but skipping the 25% tariff turns the 25-year mark into a critical date for anyone eyeing a foreign-market car.

Returning Military and Government Employees

Service members and civilian government employees returning from an official overseas assignment can import a personal vehicle duty-free under HTS subheading 9805.00.50, and the exemption reaches the Section 232 tariff.² You have to prove you took possession of and registered the vehicle while stationed overseas. Without overseas registration, the exemption doesn’t apply and full duties are owed.⁹

Non-Residents Bringing a Car Temporarily

A non-resident visiting the United States can bring a personal vehicle in duty-free for up to one year, provided the vehicle arrives with them. It has to leave before the year is up and cannot be sold in the U.S. under any circumstances. There is no extension.¹⁰

Returning U.S. Residents

U.S. residents coming home from abroad can apply an $800 personal duty-free exemption to accompanying goods, and a vehicle can count toward that.¹¹ On a car worth $30,000 or more the $800 reduction barely dents the bill, but it does trim the dutiable value.

The Cost of Getting It Wrong

The tax math is only part of the picture. Every imported vehicle must meet federal safety and emissions standards, and CBP can require a non-conforming car to be brought into compliance, exported, or destroyed.¹² A car originally built for a foreign market that lacks a manufacturer’s FMVSS compliance label can only be permanently imported through an NHTSA-registered importer, which requires a bond equal to 150% of the vehicle’s entered value and compliance work that can run into the thousands.¹³

Filing false information on DOT Form HS-7 carries penalties of up to $10,000 in fines, up to five years of imprisonment, or both.¹⁴ Between shipping, port storage, and re-exporting or destroying a car you already paid for, a compliance failure can quickly cost more than the duties themselves. Running the numbers before you buy, and confirming the HTS classification and any exemption you’re relying on, is the only reliable way to know what the vehicle will actually cost to land.

1
Federal Register. Adjusting Imports of Automobiles and Automobile Parts Into the United States
2
U.S. Customs and Border Protection. Section 232 Additional FAQs – Automobiles and Auto Parts
3
U.S. Customs and Border Protection. New Tariff Requirements for 2025
4
United States International Trade Commission. Harmonized Tariff Schedule of the United States – Chapter 87
5
U.S. Customs and Border Protection. Customs User Fee – Merchandise Processing Fees
6
GovInfo. 26 USC 4461 – Imposition of Tax
7
Office of the Law Revision Counsel. 26 USC 4064 – Gas Guzzler Tax
8
Office of the Law Revision Counsel. 49 USC 30112 – Prohibitions on Manufacturing, Selling, and Importing Noncomplying Motor Vehicles and Equipment
9
U.S. Customs and Border Protection. Non-Resident, Returning Military, and Returning Official
10
U.S. Customs and Border Protection. Returning to the United States With a Vehicle and Household Goods
11
U.S. Customs and Border Protection. Duty-Free Exemption
12
U.S. Customs and Border Protection. Importing a Motor Vehicle
13
National Highway Traffic Safety Administration. Registered Importers
14
National Highway Traffic Safety Administration. Importation of Motor Vehicles and Motor Vehicle Equipment