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moneysense.ca, 9/07/07
Car Shopping in the United States
CBC is reporting that many Canadians are saving thousands of dollars by shopping for cars and trucks in the United States. It is not surprising given that our dollar has crossed 95 cents (US) and a wide disparity exists between prices on some models. For example, Toyota Sienna XLE Limited has a suggested retail price of $51,375 in Canada. The same van is priced at $37,665 (US) south of the border and at current exchange rates, Canadian shoppers can save more than $20,000 when purchasing the van. Some of the savings will be spent on importing the vehicle into Canada but even netting out the expenses leaves a considerable sum of money in your pocket.
MoneySense magazine recently had an article on importing a car from the US (not available online). This article in CanadianDriver.com gives some idea of the hurdles that must be cleared during the import process. If you have personally imported a vehicle from the US, please share your experience in the comments.
moneysense.ca, 9/07/07
I work for an automaker and although I don’t work on the sales and marketing side of the business, I can tell you that automobiles will always be more expensive in Canada than the USA. One reason is the up-front cost of the government approvals necessary (usually millions of $) to sell a vehicle in any country – and Canada has even more government regulations than many other countries. Since the USA has 10x the population and 10x the sales of automobiles, that up-front expense can be spread across many more vehicles sold. In many cases, some limited production vehicles are just too expensive for some automakers to bother to try to bring to Canada. For Toyota, see the Scion lineup of vehicles not for sale in Canada and the MR-S which never did make it to Canada during that model run. Another example is Lotus didn’t bother to go through the regulations to license their Elise for sale in Canada, but it is for sale in the USA. Another reason is that while currencies fluctuate daily, usually sales literature is only published once every minor model (once a year or two). Only when they publish the new literature, then the marketing departments sit down and decide whether to adjust the prices or not.
And I have lived on both sides of the border and moving cars across the border isn’t too big of a hassle. I’m not sure if the rules are any different for importing vehicles, but when I was moving, it was no big deal…
All I needed to get was a letter from the manufacturer stating that the vehicle meets all of the applicable safety and emissions of whichever country I was importing the vehicle into. There obviously may be a problem if the model of vehicle you bought isn’t sold in Canada. After that, there was some kind of an administration charge for a few hundred dollars that I recall having to pay, but I believe any vehicles manufactured in North America are basically duty-free as part of NAFTA.
I think the best illustration is for a Porsche Boxster, since it is manufactured in Europe (the Toyota Sienna in your example is manufactured in Indiana). Its base price is $45,600 in the USA and $63,600 in Canada. This price difference shows the difference between Porsche selling thousands of Boxsters in the large market that is the USA versus hundreds of Boxsters in Canada.
As noted in the article, and other “importing cars from USA” sites, it’s even more advantageous to chose a vehicle produced in the US or Mexico to avoid the 6.1% duty placed on non-NAFTA cars.
What I love about the CBC article is how automakers love to trumpet free trade, they don’t want their customers freely trading cars across borders.
This is another good site:
http://www.importcartocanada.info/guides-tips/step-by-step-guide-to-importing-a-car-into-canada-from-the-us/
My friend is going to Vegas to pick up a BMW M5 next week, probably saving $5-10K in the process. I’m thinking about teaming up with an acquaintance in Spokane, Wash. to act as a conduit for vehicles into the country.
We imported my husband’s car from New York too, when we immigrated. Like Phil above we found it to be completely painless. Once you check to make sure the make and model is on the approved list, the “car moving” companies know the drill and can walk you through everything, Canadian Tire know what modifications need to be made to a US car, and RIV – The Registrar of Imported Vehicles – has all the info you need (see http://www.riv.ca for it step by step). They even had a little brochure to give us. We did this earlier this year and the fees – including the moving company – couldn’t have been more than $2,000 tops. However as immigrants with a car on our “goods to follow” customs list it’s possible that we didn’t have to pay taxes others might pay, can’t speak to that.
I wonder at what point the savings make it worthwhile. I personally would never spend more than $25 on a new car (my Toyota Matrix sneaked in at just under that amount) and I wonder if the presumably smaller savings on non-luxury cars would be worth crossing the border for? When I emigrated to Canada to the US I did the math on whether it would be worth importing my Ford Focus with me and at that time it wasn’t. I sold it and used my girlfriend’s Hyundai Accent for a few years while I saved up enough money to buy the Matrix.
Er, I meant $25K, not $25 in my post above
Buying a new car for $25 would be an interesting feat.
I remember having troubles importing my car to Canada back in 2003. Can’t remember the exact reasons. I seem to recall importing on a weekday is a good idea. Sorry for being vague.
If you purchase a car in the US, is the warranty transferable?
Thanks for your comments everyone.
Brad: Good point. I’ve purchased only used vehicles so far and I wouldn’t go to the trouble of purchasing a used car in the US. Still, if you could save a few thousand dollars on a new vehicle painlessly by using an import broker, I’d go for it.
MDJ: It looks like warranty transfer depends on the manufacturer. There seems to be a bit of homework involved in importing a vehicle and I guess you’ll have to call around to make sure that the warranty is covered in Canada (in writing).
Does anyone know if there is there any advantage to importing a used vehicle? It seems used vehicle prices should be considerably lower as well. I would strongly consider doing this. Anyone know?
telly… The rules are no different between new or used. As long as it meets our standards, then it should be just a little paperwork and a little cash.
You can buy old cars in excellent condition in the southern states (no snow). I saw a ’72 Cadillac Deville Convertible (a pimped-out land yacht) one time that I considered low balling ($8K asking price) but it was in spotless condition – the car was so hilarious that I wanted it just to drive around on weekends with my friends. Only the convertible top was in rough shape. I chickened out and didn’t buy it, though… =0(
I haven’t been car shopping, but I’ve definitely noticed that we’re getting gouged on books and camera accessories. Books are $2-3 more when they should be about 55¢ more, and the flashes and light meters I was looking at were more than double. For books, it’s probably only cheaper to import if you buy a whole lot all at once, but for the camera stuff the savings more than covers shipping costs.
Lol…Phil, that would have been an awesome ride!!
I live in a border town and work in the US. My pay is in US dollars so these days I try to buy my big items in the States. I have a lot of stuff delivered to my work and almost never have to pay duty when I declare them. I’m not in the market for a used car yet but I don’t know how much my Escort has left in it…I should check out a Caddy.
Aleks, I bought my last camera in Amazon (US) and the price differential was HUGE!
telly, Aleks: I don’t have much time for photography these days but even five years ago it was cheaper to mail order cameras, lenses etc. from B&H than purchase it locally in Ottawa. I’d suspect that the savings are much bigger now.
Funny how things change. Vehicles used to be cheaper in Canada, even after adjusting for exchange rates. That’s because prices were based on what we could afford.
I knew someone who bought a Toyota Sequoia SUV here in Canada and decided he didn’t like it a few months later. He was able to sell it to a US dealer for what he paid ($0 depreciation). He then got a Yukon XL here.
Backing up my post: “In 2002, Americans imported 211,797 Canadian-purchased vehicles. That number plunged to just 9,496 last year.”
— July 10, 2007 Globe & Mail
Link: http://www.theglobeandmail.com/servlet/story/LAC.20070710.RAUTOS10/TPStory/Business
Does anyone have any information on trading in a Canadian vehicle at a US dealdership and bringing a new car from that dealership into Canada? Is that allowed? What do you have to do?
I brought my Honda when I moved. Import was very simple – 1. get car title papers, 2. get a certificate of “no recalls” from manufacturer, 3. Get car inspected from Canadian Tire. This all cost me
As far as I know, you cannot purchase a new car from a US dealer. Dealers are not allowed by manufacturers to do this and can result in loss of dealership. Call them and find out.
Can somebody elaborate on why US based dealers cannot sale a brand new car to a Canadian customer? Thank you in advance.
Tried to purchase new sienna van in us. Dealership would not sell to me as I was Cdn, had no us address. Claimed Toyota would pull thier dealership if he sold to me. Checked 4 other dealerships, told same thing. Until Cdn’s should bouycott toyota cda! I am!
Tried to purchase new sienna van in us. Dealership would not sell to me as I was Cdn, had no us address. Claimed Toyota would pull thier dealership if he sold to me. Checked 4 other dealerships, told same thing. Until Cdn’s should bouycott toyota cda! I am!
I’ll soon find out. I was told by the dealer that they could sell me a new Toyota RAV 4 because I had a U.S. address. I own a trailer in a condominium trailer park, with an address, and pay taxes in that state. I am, however, leery about how this will turn out. After exchange (currently around 6.5%) , taxes (14%) and duty (6.1%), it will still save me $2000 to $3000 Cdn. The duty is charged on the total US price with the Canadian equivalency of exchange based on the Bank of Canada rate on the day the vehicle is being imported into Canada, so you have to allow for fluctuations in this rate in your calculations. Like I said, I will soon find out.
I started looking for a used car in Calgary but the dealers here charge a fairly hefty price premium due to the “oil boom.” The same car in the US with the same mileage (converted to kms) can be anywhere from $10K to $20K less. I am looking at a BMW 3 series convertible so this is substantial. The US version is now manufactured in the US so there is no duty due to NAFTA. Even after shipping, customs brokerage if I get someone to do it for me and then sales tax I still come out considerably better off. As for the new cars not being sold to Canadians see the link from an article in the Calgary Herald. It explains a lot even if you don’t like the explanation. Also note that all the Canadian dealers try and make it sound like it is a hassle to bring a car across the border. If someone at the dealership would pay me $12K instead of me doing a little, well explained paperwork, I might consider it but don’t give me that as an excuse.
Sorry, for the above link I mentioned just click on my name in blue above the message apparently.
Finally, here is another article from yesterday’s paper. Going to be interesting to see how this all gets justified as the Canadian dollar continues to rise.
http://www.canada.com/calgaryherald/news/story.html?id=3a85c8b6-5737-4642-ae6f-3a90983abbbf
Those agreements constitute combinations and conspiracies in unreasonable restraint of interstate trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.
U.S. Dealers and Manufacturers are in violation of the above law if they refuse to sell to Canadians.
I am looking a car in very good condition ranging from 2,000 to 4000 Honda, Accura, Nissan Maximas, Toyota
I”m planning to buy used motorcycle from my friend in chicago. So anyone please le tme know how much tax i have to pay for cutome in canada border?
Chances are if you’re buying a pre-owned Porsche, it will be your dream car. Sure there are those folk driving Porsches purely as a means of transport – they’ve got the money – they buy new – they keep the used Porsche market going for you!