Two Incoterms account for the overwhelming majority of vehicle exports out of China: FOB and CIF. Choosing between them is one of the first decisions a buyer makes, and it changes what you pay for, who arranges the shipping, and where your risk begins.
What FOB means
FOB — Free On Board — means the seller delivers the vehicle to the named port of loading in China and clears it for export. Once the goods are on board the vessel, responsibility and risk transfer to you as the buyer. From that point, ocean freight, marine insurance, destination port charges, customs clearance and inland delivery are all yours to arrange and pay for.
A properly itemised FOB quotation should show the vehicle cost, inland transport to the port, export clearance and terminal handling.
What CIF means
CIF — Cost, Insurance and Freight — means the seller additionally arranges and pays for ocean freight to your named destination port, plus a marine insurance policy for the voyage. Risk still transfers when the goods are loaded, but the cost of getting them across the water sits with the seller.
CIF does not include destination port charges, import duty, VAT, customs clearance or delivery to your premises. This is the single most common misunderstanding in the trade: a CIF price gets the vehicle to your port, not to your door.
Which one should you choose?
FOB tends to suit you if:
- You already have a freight forwarder you trust and rates you have negotiated.
- You ship regularly and have volume leverage on ocean freight.
- You want maximum visibility into each cost component.
CIF tends to suit you if:
- You are importing for the first time, or infrequently.
- You do not have forwarder relationships on the China lane.
- You would rather hold one supplier accountable for delivery to your port.
The comparison buyers get wrong
You cannot compare an FOB price from one supplier with a CIF price from another and conclude that the FOB supplier is cheaper. The difference between them is the freight and insurance you have not yet paid for. Always compare like with like — either both FOB from the same loading port, or both CIF to the same destination port.
It is also worth remembering that freight rates move. A CIF quotation is only valid while the underlying rate holds, which is why serious exporters quote against live rates at the time of booking rather than publishing fixed figures.
What about RoRo and container?
FOB and CIF describe who pays and where risk transfers. They do not describe how the vehicle physically travels. That is a separate decision between roll-on/roll-off and container shipping, which we cover in the RoRo versus container guide.
Ask for this in every quotation
- The Incoterm, stated explicitly, with the named port.
- An itemised breakdown rather than a single figure.
- What is expressly excluded at the destination.
- How long the quotation is valid.
We quote both terms on new vehicles and used vehicles. Tell us your destination port and we will price it both ways so you can compare properly.