FOB vs CIF for Used Truck Imports: Read Your Quote Correctly
When a seller writes "FOB" or "CIF", two letters change who pays for the ship, who pays for insurance, and at what point the truck stops being the seller's problem. Most used-truck enquiries ask for "a quote" without naming the term — and that omission is where surprise costs enter. This page explains the two terms in plain language and shows how to turn a quote into a landed cost you can plan against. Both are sea and inland-waterway terms under Incoterms® 2020 (ICC); if your truck moves by air or overland, different terms apply.
FOB — Free On Board
Under FOB (Free On Board) the seller delivers the truck by placing it on board the vessel nominated by the buyer at the named port of shipment. The seller bears the cost of bringing the unit to that port, the loading, and completing export clearance. Cost and risk both pass to the buyer once the truck is on board at the shipment port.
From the point the truck is on board, the buyer takes on the main ocean freight and arranges any insurance it wants (under FOB the seller has no obligation to insure), plus the destination-side charges, import clearance, duty and inland transport.
CIF — Cost, Insurance, Freight
Under CIF (Cost, Insurance and Freight) the seller pays the ocean freight and contracts marine insurance to the named port of destination, and builds both into the quoted price. The buyer still handles import clearance, duty and inland transport at the destination.
Two points are widely misunderstood. First, risk still passes to the buyer when the truck is loaded at the shipment port — the same trigger as FOB; CIF is about who pays, not about who carries the risk until arrival. Second, the insurance the seller must arrange is only the minimum cover the CIF rule requires, unless the two sides agree otherwise in the contract. If the truck's value warrants broader protection, agree a higher insurance clause explicitly rather than assuming the default covers it.
The difference that actually hits your budget
- An FOB quote is lower because it excludes freight and insurance. Your comparison cost is FOB + the freight you negotiate + the insurance you buy.
- A CIF quote is higher because freight and minimum insurance are inside it. You still add duty and inland costs.
- Neither term fixes every cost on its own. Which side pays destination port handling, terminal charges, and any pre-shipment or conformity inspection is not settled by the term alone — it follows from the specific contract, the carrier's tariff and the destination's rules. In practice the buyer usually arranges the destination side, but confirm the exact split in writing before you commit.
- One practical note: some sellers and forwarders prefer FCA for cargo handed over as containers, since the handover can happen before loading — confirm which term suits your shipment rather than assuming. Roll-on/roll-off truck shipments are where FOB and CIF apply most cleanly.
What a proper pre-purchase inspection coversThe full selection sequence, from market rule to model code
Building your landed cost
Start from the quote, then add, on the buyer side, the costs the term does not include:
- Import duty and any levy specific to your market — see the country pages for the duties and certificates that apply, and confirm current requirements with your licensed clearing agent and the official issuing bodies, since these change.
- Clearing-agent fees and any conformity or pre-shipment inspection your market requires. Who commissions and pays for a pre-shipment inspection is set by the destination's rules and by your contract, so confirm it rather than assume.
- Destination port handling and inland transport to your yard. The exact split of port and terminal charges depends on the contract and the carrier's tariff.
Destination-market requirements by countryGhana: certificates, age rules and pre-shipment inspectionNigeria: levies, certificates and registration rules
The total — not the FOB or CIF number — is the figure your business case should use. We do not publish duty rates, because they depend on engine size, vehicle category and the valuation your agent obtains, and they differ by market.
What no quote term can promise
Incoterms set cost and risk, not outcomes. No term guarantees customs clearance, and none makes a used truck arrive in the condition it left in — which is why the insurance cover and the bill of lading matter as much as the truck. Inspect the unit before you commit, agree the model, year and terms in writing, and confirm the unit against your market's age and steering rules before you pay.
Contact us for an FOB or CIF quote to your named port
Frequently asked
Is CIF safer than FOB?
Not automatically. CIF includes insurance paid by the seller, but risk still passes to you at the shipment port, and the default cover is the rule's minimum. Real protection is the right insurance clause and a clean bill of lading, under either term.
Which should I ask for?
Ask for both, to the same port. The gap between them is roughly the freight and insurance, and seeing both tells you whether the seller's freight rate is competitive.
Does the quote include import duty?
No. Duty, destination charges, conformity inspection and inland transport are buyer-side under both terms, though the exact split depends on the contract and the destination's rules.
Can TANAN quote FOB and CIF?
FOB and CIF quotes are available on request — ask for the term and your named port, and what the figure includes.
Does CIF cover the truck's full value?
Not by default. The rule sets a minimum cover unless the parties agree otherwise; ask for the insurance clause in writing and negotiate broader cover if the unit's value warrants it.
Sources
- Incoterms® 2020, International Chamber of Commerce — CIF is reserved for maritime (sea and inland waterway) trade, and Institute Cargo Clauses (C) remains the default cover, with parties free to agree a higher level. https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/ (verified)
- Zhejiang Sub-Council for Promotion of International Trade (CCPIT Zhejiang), "A 2020 guide to Incoterms" — FOB is limited to sea and inland waterway transport; the Incoterms 2010/2020 change replaced the ship's-rail line with the point at which the goods are loaded on board, at which risk passes from seller to buyer; the CIF and FOB delivery and risk points are both on board at the port of shipment. https://www.ccpitzj.gov.cn/art/2020/8/17/art_1229557691_11515.html (verified)
- United Nations / UNCITRAL endorsement of the Incoterms 2020 rules — https://documents.un.org/doc/undoc/gen/v20/020/18/pdf/v2002018.pdf downloaded successfully but its body text is glyph-encoded and could not be read independently; therefore not cited as direct evidence for any statement above