Korean Used Car Export Advance Payment: Deposit, Milestones & Balance Guide (2026)

A korean used car export advance payment is a partial upfront payment — most commonly 30% of the FOB price — that the buyer wires to the Korean exporter to lock in a specific vehicle (by VIN) and trigger de-registration, performance inspection, and port handling. The remaining 70% is paid against the draft Bill of Lading before original B/L release. Standard structures range from 10/40/50 across three milestones to 100% advance for vehicles under $5,000 FOB. Under Korean Civil Code Article 565, a deposit paid as 계약금 (gye-yak-geum, earnest money) is forfeited if the buyer breaches and is doubled-back if the exporter breaches.

For a typical $18,500 FOB Tucson, that means a $5,550 deposit on PI acceptance and a $12,950 balance on B/L draft, both wired by SWIFT T/T. Browse our live Hyundai inventory to see what advance payment ranges look like against real listings, or request a quotation from SH GLOBAL with milestone-protected payment terms in writing.

Live Hyundai inventory at SH GLOBAL — browse units to anchor your advance payment quote

What Is an Advance Payment in Korean Used Car Export?

A korean used car export advance payment is a partial cash payment made by the buyer before the vehicle ships, in exchange for the exporter committing to (1) reserve the specific VIN against other buyers, (2) start de-registration (말소등록) at the Korean MOLIT, (3) commission the performance inspection report (성능상태점검기록부), (4) book ocean freight, and (5) handle the export declaration through Korea Customs Service (관세청).

Without an advance payment, no Korean exporter will start any of these steps, because the de-registration alone takes 2–3 business days, costs ₩50,000–₩150,000, and irreversibly removes the vehicle from the Korean registry. Performance inspection costs another ₩100,000–₩200,000 and is non-refundable. The exporter is exposed to ₩300,000–₩500,000 in sunk cost per unit before the buyer has paid a cent — the deposit covers that risk and signals genuine buyer intent.

Advance Payment vs Down Payment vs Deposit

These three terms are used interchangeably in the Korean export trade, but legally they differ:

• Advance payment — generic term for any payment made before delivery. The IRS-equivalent term in international trade.
• Deposit (계약금 / gye-yak-geum) — Korean legal term for earnest money, governed by Civil Code Article 565. Forfeit on breach.
• Down payment — common North American term, usually means the same as deposit but sometimes implies a partial-finance structure that doesn't apply to cash export trades.

In practice, Korean exporters use 계약금 (deposit) on the Korean-language contract and "advance payment" or "deposit" on the English Proforma Invoice. They mean the same money.

Why Korean Exporters Require Upfront Money

Five reasons drive the universal Korean industry practice of demanding 30%+ upfront:

1. Sunk cost protection — de-registration, inspection, and yard storage are non-refundable.
2. Auction lock — when sourced from Glovis, Lotte, or AJ Cell auctions, the exporter pays the auction house at hammer-fall T+2; if the foreign buyer ghosts, the exporter eats the unit.
3. Buyer commitment signal — wired money filters out tire-kickers and same-spec-multi-quote buyers who never close.
4. FX hedge — KRW/USD swung in a 6.7% range in 2025; deposit lets the exporter convert and lock margin.
5. Working capital — small Korean exporters operate on $50K–$300K rotating capital and cannot float a $20K vehicle for 30+ days uncompensated.

For a deeper look at how this fits the broader payment landscape, see our Korean used car payment methods guide.

Standard Korean Advance Payment Structures (2026)

There are four advance payment structures the Korean used car export market uses. All are KITA-recognized and legally enforceable when written into the Proforma Invoice and Sales Contract.

30/70 — The Industry Default

The single most common korean used car export advance payment structure. Used by an estimated 65–70% of Korean exporters for transactions $5,000–$50,000 FOB.

• 30% deposit wired on PI acceptance (T+0 to T+3)
• 70% balance wired on B/L draft (T+18 to T+25, after vessel loading)
• Original B/L release triggered by 70% wire confirmation

This structure balances exporter sunk-cost coverage (30% covers de-reg + inspection + auction commitment) with buyer leverage (70% withheld until shipping is verifiable). It's the default we recommend to first-time buyers.

10/40/50 — Three-Milestone Structure

A buyer-protective structure used for higher-value vehicles ($30,000+ FOB) or fleet orders, particularly when the buyer doesn't yet trust the exporter:

• 10% reservation deposit on PI signature
• 40% second tranche on de-registration certificate (말소등록증) issued
• 50% balance on B/L draft

The buyer gets two early checkpoints — if the exporter can't produce a real de-registration certificate within 5 business days, the buyer cancels and only 10% is at risk. KITA-registered exporters generally accept this structure for repeat customers and for orders over $40,000 FOB.

50/50 — Higher-Trust Structure

Used by Korean exporters with strong reputations or by buyers who want stronger commitment leverage. Common in Genesis luxury and commercial vehicle (Porter, Bongo, Mighty) transactions where supply is tight.

• 50% deposit on PI acceptance
• 50% balance on B/L draft

The exporter agrees to lock the unit for 14–21 days, source rare options, or modify (e.g., LHD conversion arrangement). The buyer gets stronger priority over other prospects bidding the same auction lot. Browse Genesis listings when planning a 50/50 transaction so you can anchor the deposit % against current FOB prices.

100% Advance — When It's Acceptable

Generally a red flag unless the FOB is below $5,000 (cars like 2010 Hyundai Avante or Kia Morning) where the 50% balance trigger is administratively expensive. Some Korean exporters offer 3–5% discounts for 100% advance to cover their FX and admin friction.

100% advance is acceptable only if: (a) the exporter is KITA-registered with verifiable customs export code, (b) you have escrow as the holding mechanism (not direct T/T), and (c) the FOB is under $5,000. Beyond that, demand a milestone structure.

The structures are summarized below:

Milestone Triggers — When Each Tranche Becomes Due

The advance payment schedule is only as buyer-protective as its milestone trigger definitions. Vague triggers ("when ready to ship") strip your leverage. Use the precise events below in your PI and Sales Contract.

The draft B/L (not the original) is the buyer's strongest leverage point. It proves the vehicle is actually loaded on a named vessel with a sailing date — and if the balance isn't wired within 3–5 business days, the carrier will refuse to issue the original, blocking destination clearance. This naturally aligns the exporter's incentive to ship promptly with the buyer's incentive to release the balance.

For a deeper dive into how the draft and original B/L work, see our Korean used car Bill of Lading guide.

Is Your Korean Used Car Deposit Refundable?

This is the single most-asked question and the most-misunderstood. The answer depends on Korean civil law, not on what your exporter promises verbally.

Korean Civil Code Article 565 (Earnest Money / 계약금)

Under Civil Code Article 565, when a deposit is paid as 계약금 (earnest money) without an explicit refund clause:

• Buyer cancels before exporter performs → buyer forfeits the deposit.
• Exporter cancels before performing → exporter returns deposit + an equal amount (so the buyer receives 200% of deposit back).
• Either party performs even partially (de-reg started, vehicle won at auction) → cancellation requires payment of damages, not just deposit forfeit.

This default rule applies unless the contract says otherwise. KITA-style export contracts often modify Article 565 to be friendlier to buyers (e.g., refundable if VIN doesn't match spec at PSI). Always read the cancellation clause; if it just says "subject to Korean law", default Article 565 applies.

Cancellation Scenarios

The table below maps common scenarios to refundability under standard 30/70 with default Article 565 behavior:

Advance Payment vs L/C vs Escrow — Decision Matrix

Advance payment by T/T is one of three primary payment instruments for Korean used car imports. Each has a different risk-cost-speed profile.

For most international buyers under $30K FOB and after one successful trade, T/T advance payment with milestone triggers is the cheapest, fastest, and most flexible option. For first-time, high-value, or high-risk-jurisdiction trades, escrow or L/C is worth the extra friction. See our Korean used car letter of credit guide for L/C detail and the escrow service guide for escrow workflows.

How to Wire an Advance Payment Safely

The wire transfer step is where preventable losses happen. Here's the safe-wire protocol Korean exporters and buyers actually use.

SWIFT Routing & Bank Verification

Before wiring any advance payment:

1. Beneficiary name must match the exporter's Business Registration Certificate (사업자등록증) name and the PI issuer name. Match all three.
2. Bank name must be a Korean licensed bank — KEB Hana, Shinhan, Woori, KB, NH, IBK, BOK, or Korean branches of international banks. Reject offshore-named accounts.
3. SWIFT/BIC code must be 8 or 11 characters, starting with 4 letters that map to a Korean bank (e.g., HVBKKRSE for Woori, KOEXKRSE for KEB Hana).
4. Account number must be a corporate account in the exporter's company name, not an individual's name. Personal-account requests are a hard red flag.
5. Beneficiary address should match the Business Registration address (verifiable on KITA tradenavi).

A reputable Korean exporter wires you a bank confirmation letter (입금계좌증명서) on bank letterhead before you wire. Ask for it. If they hesitate, do not wire.

Currency, Timing & FX

• Korean exporters quote in USD (default), occasionally EUR or AED. They prefer USD because Korean banks charge 0.05–0.15% spread on inbound USD vs 0.30%+ on minor currencies.
• Wire during Korean banking hours (Mon–Fri, 09:00–16:00 KST). Wires received outside hours or on Korean holidays sit in clearing 1–2 extra business days, delaying milestone triggers.
• Don't pre-convert USD to KRW yourself. The exporter's bank does it at receipt at standard interbank rates. Pre-converted KRW transfers cost the buyer 0.4–0.8% extra.
• Reference field must include the PI number and VIN last 6 digits. Wires without reference get held in compliance review.

A 30% wire on a $18,500 FOB Tucson is $5,550 USD. SWIFT cost is $25–$50 origination + $15–$30 correspondent = $40–$80 total. For a $5K micro-purchase, that's 1.6% friction; for a $50K transaction, 0.16%. Volume buyers wire balances in batched files via SWIFT MT103 to amortize the cost.

For comparison guidance, the Bank of Korea publishes daily KRW/USD reference rates at 09:30 KST — buyers checking the morning rate get a 0.2–0.5% read on whether their incoming balance hit a favorable conversion window.

7 Red Flags in Korean Advance Payment Demands

The advance payment request is the highest-leverage moment for fraudulent operators. These seven signals are how scams identify themselves before money moves.

1. Personal bank account instead of corporate (사업자) account. No legitimate Korean exporter operates this way.
2. 100% upfront demanded for vehicles over $5,000 FOB without escrow.
3. Account in non-Korean bank (Hong Kong, BVI, Singapore offshore) when the seller claims to be a Korean exporter.
4. Account name mismatches PI issuer. Even one character difference is a hard stop.
5. Pressure to wire same-day, citing "auction deadline" or "another buyer waiting". Real auctions settle T+2; you have time.
6. No Business Registration Number (사업자등록번호) on the PI — this is mandatory under Korean law for any commercial document.
7. Refusal to issue a quotation first — the exporter goes straight to PI demanding immediate payment.

Sample Advance Payment Schedule — Real $18,500 FOB Tucson

A worked example based on an actual SH GLOBAL Co., Ltd. transaction (anonymized) for a 2022 Hyundai Tucson Inavate 1.6T, sourced from Glovis auction, FOB Pyeongtaek, CIF Mombasa.

Total elapsed: PI to original B/L = 23 days. Total wire fees: $80 (2 × SWIFT). Buyer's cash-out window (deposit to balance) = 22 days. The buyer's exposure in the worst case (exporter walks after deposit, before de-reg) = 3 days.

When 30/70 Doesn't Apply: Special Cases

Several real-world scenarios require structures different from the 30/70 default:

• Pre-auction sourcing — if you ask the exporter to bid on a specific Glovis or Lotte lot you saw, expect a 50% upfront to fund the auction bid, refunded if the bid loses.
• Custom modifications (LHD-RHD swap, snorkel install, body kit) — typically 40% upfront + 60% on draft B/L, because the exporter's modifier sub-contractor invoices on completion.
• Multi-unit fleet orders (5+ vehicles) — can drop deposit % to 20–25% in exchange for shorter balance trigger (10 days post-loading instead of B/L draft).
• Sanctioned destinations — requires 100% upfront via OFAC-compliant escrow, no T/T direct.
• Very-low-value vehicles (<$5,000 FOB) — 100% advance is normal because milestones are administratively expensive.

These are exceptions. If the exporter quotes any of these without explaining why the standard 30/70 doesn't apply, treat it as an information gap and ask. Buyers shipping to Africa should also reference our Africa export guide; Central Asia buyers should see the Central Asia export guide for region-specific advance payment patterns. Kia commercial inventory typically prices in the $8K–$25K FOB band where 30/70 applies cleanly.