How the exchange rate moves your customs bill

The exporter quotes you in US dollars. Jamaica Customs bills you in Jamaican dollars. Somewhere between the two, a conversion happens, and the rate it happens at is not one you choose. It is the Bank of Jamaica rate on the day the vehicle is cleared, which may be weeks after you paid the exporter and months after you first priced the car. This guide explains which rate is used, why it matters more than it looks, and how much room to leave in the budget.

Which rate Customs uses

Customs values the vehicle at its CIF price, meaning cost plus insurance plus freight to Kingston, and converts that price to Jamaican dollars using the Bank of Jamaica rate on the day of clearance. Not the rate on the day you paid the deposit. Not the rate on the day the vehicle shipped. The day the entry is assessed.

The Bank of Jamaica publishes the counter rates that authorised dealers post, once a day, on working days. Because the table is published daily, a Sunday shows Friday’s rate, and a public holiday can leave a gap. The table carries a buying rate and a selling rate for each currency. An importer buys foreign currency to pay for a vehicle, so the selling rate, the rate at which the bank sells you a US dollar, is the one that matters. That is the rate this site reads from BOJ’s own table and the rate the calculator starts from.

Why the rate matters more than it looks

A move of a dollar or two in the exchange rate sounds small. It is not small, because every customs charge except the flat administrative fee is a percentage of the CIF value in Jamaican dollars. If the rate rises, the J$ value of the vehicle rises, and the duty, the SCT, the GCT and the levy all rise with it in proportion. The exchange rate does not move one line of the bill. It moves the whole bill.

The arithmetic is direct. At today’s rate of J$158.88 per US$1, a J$1 rise in the rate raises the CIF value in Jamaican dollars by about 0.6%, and because the charges are proportional to CIF, it raises the customs charges and the landed cost by the same share, less the flat fee. Over a J$5 move that is roughly 3.1% of the J$ total.

A US$10,000 car at three rates

Here is a used 1.5 litre petrol car at US$10,000 CIF, priced at today’s Bank of Jamaica selling rate and at two higher rates, using the same calculation the calculator runs:

• At J$158.88 per US$1, the CIF value is J$1,588,800, the customs charges are J$1,004,803 and the landed cost is J$2,593,603.
• At J$160.88 per US$1, the CIF value is J$1,608,800, the customs charges are J$1,016,583 and the landed cost is J$2,625,383, a rise of J$31,780.
• At J$163.88 per US$1, the CIF value is J$1,638,800, the customs charges are J$1,034,253 and the landed cost is J$2,673,053, a rise of J$79,450.

Read the last figure again. A J$5 move on a US$10,000 car is a difference of J$79,450 between the estimate you made and the bill you receive, and nobody at the wharf will treat that as a reason to reduce it. The customs charges are a percentage of CIF, so the more expensive the vehicle, the larger the difference in dollars.

Which currency you pay in

Most Japanese exporters quote in US dollars, but some quote in yen, and a few in pounds if you are buying from Britain. The Bank of Jamaica table carries a selling rate for each currency, and Customs converts the CIF in whichever currency the invoice is written. So an invoice in yen is converted at the yen rate, not at the US dollar rate via some cross-calculation. The calculator lets you pick the currency for exactly this reason, and reads the BOJ rate for that currency rather than assuming US dollars. If you are choosing between paying in yen and paying in US dollars, price the vehicle both ways and remember that each currency moves on its own.

Typing your own rate over BOJ’s

The calculator starts from today’s BOJ selling rate, but the rate field is editable. That is deliberate. A dealer or broker will often quote you at a rate of their own, and the useful comparison is the one that uses their rate, not today’s. Type theirs over the field and the whole estimate re-prices, so you can see whether the difference between your number and theirs is the rate or something else. A shared estimate link carries a typed rate with it, so the dealer sees the same figures you did.

Budgeting for a rate you do not know yet

Since the clearance-day rate cannot be known when you pay the deposit, the sensible approach is to budget at a rate somewhat above today’s and treat any difference as a bonus. How much above depends on how long the vehicle will take to arrive and how the rate has been moving, and this site does not forecast either. What it can do is show you the cost of being wrong: use the calculator with today’s rate, then again with a higher one, and keep the higher figure as the budget. Today’s BOJ rates for the US dollar, the pound and the yen, with the move from the day before, are on the exchange rate page.

Before you settle on a budget

• You know which currency the invoice is in, and have used that currency’s BOJ selling rate.
• You have priced the vehicle at today’s rate and at a higher one, and budgeted for the higher.
• If a dealer quoted you a rate, you have typed it into the calculator and compared.
• You have remembered that the rate is applied on the day of clearance, not the day you paid.

Open the calculator, price the vehicle at today’s rate, then raise the rate a few dollars and watch what happens to the total.