One of the hot segments of the collector-car market is Japanese domestic market (JDM) vehicles. Previously not exported to the U.S., the popularity of JDM vehicles was spurred when the federal government relaxed import requirements for vehicles over 25 years old. A subset of the JDM category are “kei cars,” which are the smallest road-legal cars made in Japan. Kei cars were created in response to Japanese government regulations that specify maximum size and power capacities. Fitting into the kei category yields tax and insurance benefits, as well as an exemption from governmental parking requirements. The cutest of the bunch are […]
One of the hot segments of the collector-car market is Japanese domestic market (JDM) vehicles. Previously not exported to the U.S., the popularity of JDM vehicles was spurred when the federal government relaxed import requirements for vehicles over 25 years old.
A subset of the JDM category are “kei cars,” which are the smallest road-legal cars made in Japan. Kei cars were created in response to Japanese government regulations that specify maximum size and power capacities. Fitting into the kei category yields tax and insurance benefits, as well as an exemption from governmental parking requirements.
The cutest of the bunch are the kei trucks. In utility mode, they offer economical hauling capabilities. But it’s the mini-fire-trucks and other such vehicles that have the greatest visual appeal, exciting every little kid who sees them.
One of the best-known JDM collectors is Gary Duncan. He and his family own a number of Japanese, German and American new-car dealerships, but his real love is Duncan Imports & Classics, with locations in Nashville and Christiansburg, VA. Duncan’s personal collection numbers over 1,300 cars, and his collector-car dealership has about 1,400 cars in inventory. Substantial percentages of both are JDM cars — he has imported about 4,000 of them.
Duncan explains that the mini-trucks are affordable and highly usable vehicles popular with wineries and farmers. They are often used for transport inside warehouses and plants. Even some rural mail carriers use them.
Although not a kei car, the Mitsubishi Delica is another smallish trucklet that’s a popular JDM import. It comes as either a pickup or minivan, with the most common version being the 4-wheel-drive, diesel-powered minivan. It is popular as a camping van, offering owners the ability to head off-road while searching out the perfect family camping spot.
Aside from practicality, all of these vehicles are affordable. Duncan sells nice kei trucks for under $10k, while Delicas are priced from the mid-teens up to the $20k–$30k range, depending upon the model and condition.
Maine goes after owners
Recently, Maine owners of Delicas were stunned to receive letters from the Maine Bureau of Motor Vehicles informing them that their vehicle registrations had been canceled and they should immediately take their plates off their vehicles.
The letter quotes heavily from the 2011 report, “Best Practice Regarding Registration and Titling of Mini-Trucks,” issued by the American Association of Motor Vehicle Administrators (AAMVA). Key passages include:
Mini-trucks are typically right-hand-drive (RHD) vehicles, which have been shown to have a significantly higher crash risk than comparable left-hand-drive (LHD) vehicles on North American roadways.
Mini-trucks were not designed to meet North American vehicle safety standards or be operated on North American roadways. By allowing them to operate on our public roadways, we are introducing into the traffic mix a vehicle with questionable stability and crash protection. Further, by allowing on-road operation of used mini-trucks, Canada and the U.S. are accepting another nation‘s cast-offs — vehicles that no longer meet the exporting country‘s vehicle safety or emissions standards.
Increasing the supply of older-model vehicles in North America undermines government and industry efforts to improve vehicle safety and reduce vehicle emissions, as these efforts are largely dependent on fleet turnover.
The BMV letter states that these vehicles do not meet Federal Motor Vehicle Safety Standards (FMVSS). Although the 25-year rule provides an exemption from the federal standards, that is solely for purposes of importation and has nothing to do with registration. Maine has complete authority to impose its own rules for registration of vehicles, and it has chosen to follow the AAMVA guidance.
Moreover, the letter notes that many of the manufacturers of these vehicles stated in their certificates of origin that the vehicles were designed for off-road use. Under Maine law, off-road vehicles cannot be titled or registered for on-road use.
Reading the report
The reasoning in the AAMVA report is certainly subject to challenge. The report notes that the federal 25-year rule allows mini-trucks to be imported for on-road use even though they never met the FMVSS. But it then recommends that the mini-trucks be limited to off-road use because they were never manufactured to meet the FMVSS. Basically, mini-trucks are to be punished because they don’t meet a federal standard that the federal government has chosen not to apply to them.
The report stresses the safety factor with these vehicles because they were not built to any relevant safety standards. Reading this, I’d hate to ask what they think of the old cars in our collections. I suppose they’ve begrudgingly recognized that our old cars aren’t going anywhere with the comment that we shouldn’t be “increasing the supply of older vehicles.”
Obviously, the federal 25-year rule increases the supply of older cars. As an organization of state bureaucrats, the AAMVA can’t do anything about that. But it can influence what the states do, and vehicle licensing and registration is controlled by the states, not the federal government.
Interestingly, the report identifies mini-trucks by model, but never mentions the Delica. The Delica is not actually a mini-truck because it is larger than the maximum size allowed under the Japanese kei truck standards. Yet Maine has lumped the Delica in with the mini-truck.
Find friendly states
The report lists 16 states, including Maine, that allow for on-road-use registration of mini-trucks. Some restrict their use to roads with maximum speeds that don’t exceed a specified number, sort of like golf carts. Since that list is now 10 years old and likely inaccurate, identifying those states isn’t reliable. You have to check your individual state requirements, which it appears may be changing in the future.
If your state does not allow registration, the thought quickly turns to using a Montana LLC to own the mini-truck. To investigate those prospects, “Legal Files” contacted John Bennett, a Montana attorney who has made a practice out of forming and maintaining Montana LLCs to register vehicles without sales tax and excessive registration fees. Bennett explains that Montana will allow mini-trucks to be registered. “However, if they are licensed for on-road use, the title must be bonded. That doesn’t make any sense because legitimacy of title is not the issue here. But that is the present rule.”
If you register your mini-truck in Montana or some other friendly state, can you drive it in your unfriendly home state? Unfortunately, the answer is most likely no. The Maine BMV letter states, “It has been the long-standing position here at [BMV] and within the Legislature’s Transportation Committee, along with the Maine State Police, that the State of Maine will not allow operation on the highway by vehicles that do not meet the [FMVSS].” That seems pretty ominous, but should a resident of another state driving a legally registered mini-truck into Maine worry about being arrested and having their vehicle impounded? That statement may well be overly broad.
First, the letter was written in the context of Maine’s policy on registering these vehicles, and it should be interpreted in that light. Second, it refers to a “position,” which is different than a law. And third, is Maine seriously going to challenge every out-of-state car being driven in Maine because the other state’s standards are different?
But if you’re a Maine resident, it’s a different analysis. Once you bring your out-of-state-registered mini-truck into Maine, Maine law requires you to register it in Maine. Once that trigger is pulled, you are driving an improperly registered vehicle in Maine, and your out-of-state registration loses its validity in Maine. This point is not limited to Maine, and the same reasoning applies to whatever state you reside in. Your Montana registration is still valid in the other 49 states, but it has become invalid in your home state. And, of course, when you try to comply and register the vehicle in your home state, Maine will refuse to register it.
Should others worry?
Some of what is written in the Maine BMV letter and the AAMVA report could easily apply to many vehicles imported under the federal 25-year rule. For example, if you import a Porsche 959, should you worry about being able to drive it because it never met the FMVSS?
Read literally, the Maine BMV letter suggests it might be a problem, but it doesn’t seem that is what they are thinking about. They are focused on Japanese mini-trucks and Delicas because they believe them to be unsafe, trash cars that are being discarded by their host country and are now littering our streets and risking the lives of our citizens. As with every governmental unit, and often courts, they write more broadly than they really mean, and other, more-mainstream cars should be okay. But still, there’s no way of really knowing.♦
John Draneas is an attorney in Oregon and has been SCM’s “Legal Files” columnist since 2003. His recently published book The Best of Legal Files can be purchased on our website. John can be contacted at john@draneaslaw.com. His comments are general in nature and are not intended to substitute for consultation with an attorney.