We’ve determined that on your average sedan or pocket rocket, the Canadian consumer will save about 5 grand by picking up a new car south of the border. On the surface, that would appear to be a pretty choice if one were in the market for a new car. But is it really the best choice?
Financially, there are obviously some vehicles that are a better deal than others and typically, the dollar value is relevant to the price point of the car you are looking at. For example, a Mitsubishi Lancer sells for $13,990 in the States and $2,500 here in Canada. At the other end of the scale, a BMW 750i, which sells for $108,500 in Toronto can be bought south of the border with a whopping discount of $32,700.
A $32,000 discount makes the decision pretty clear. $2,500 on the other hand is a bit more fuzzy.
The owner of a $13,000 car is likely a lot more reliant on his vehicle than the guy who’s driving a sedan that cost over a hundred grand. The BMW guy probably has another car or two in his garage if that one goes down for a couple of days, while the Lancer guy will be riding the bus. If something fails that isn’t covered under warranty on the BMW, the owner will be able to afford to chalk it up to the risk he took to buy the car from another country. The guy who bought the less expensive car probably doesn’t have that cash in reserve. Besides, repairs can escalate to $2,500 pretty quickly.
Is warranty an issue? Once again, that depends on the manufacturer. Some manufacturers are used to their cars traveling the world on a regular basis and their warranties reflect that. Other manufacturers have always shied away from cross border warranties. Have a read through your warranty book. Chances are there are some clauses in there that limit your ability to take your vehicle across borders. As the industry tries to cope with the cross border issue, most brands are panicking that they & their regional dealers are going to suffer. As a result, many are sticking hard to those clauses buried in the books.
Another thing to think about here is the dealer. I’m not talking about the loss of revenue to the dealer body, that’s another topic for another day. No, I’m talking about getting your car serviced once you’ve brought it home. Even today, there a some dealers who will not service cars they did not sell. Also, when it comes to getting paid for warranty claims on cross border cars, dealers have a tough go at the best of times. Dealer service departments typically don’t behave too favourably when they are forced to do something and then have to fight to get paid. End result? Don’t expect a very warm reception from the dealer. If you are one who is nit picky about little things about your car, you can almost expect to get run out of the place.
Another thing to think about is the actual vehicle. Is it compliant to the country you plan to take it to? Believe it or not, many US and Canadian models are equipped differently. You may have to make upgrades or changes to the vehicle to bring it home. Daytime running lights are required here in Canada and many cars don’t have provision for them. It’s not uncommon to see a new car from the States driving around Toronto with an ugly set of dim fog lights bolted to the front grille that were installed by our national tire chain. Dumb.
So is it worth it? As with any other big purchase, it is important to analyze your own situation. Will you be saving 2 grand or 10, or 30. What are the policies of the brand you are considering buying? How reliable is the car you want to buy? How much do the typical repairs on that vehicle cost in relation to how much you are saving? Can you handle taking the occasional long weekend to stay near your selling dealer to get warranty work done? Will you save enough to make this feasible? If you’ve answered all of these questions with a resounding yes, then maybe your next new car should come from across the border.
Anyone know if there are clauses to importing a car? This is the specific scenario I’m concerned about…
My friend has a US address and lives in Canada, so technically, he can go to the US, buy the car that I want, import it (paperwork, modifications, etc.). Can he then “sell” the car to me right away?
Thanks for any input.
Why not save the middle man and use your buddie’s address when buying the car!
Can I actually do that? I’m a Canadian citizen, with no visa/green card/etc of the US. Would there be a complication when purchasing or importing?
I wish I knew the answer to that one. I do know that people have done it successfully, though I don’t know the legal side of it.
Gary, Thanks for the quick replies.
Another question:
If I manage to get a Mini “free scheduled service” is not provided (www.apa.ca):
-what is included in this scheduled service?
-can I get a garage to do this for me?
-would this void my warranty?
-how much would it cost (approx.) if a canadian dealer charges me?
I’m guessing if I live close enough to the dealer/border, I can drive it across for the servicing.
Btw, do you know of any clauses that prevents a buyer from turning around right away and selling the car to someone else?
Thanks.
Hmmm, what are the complications and costs in the following scenario:
-my cousin/friend/colleague who lives in the US buys a car
-then s/he “gives” me the car in Canada by shipping it over
Now, the car will not be considered as “new”. A state tax would have been paid, is this reimbursable? What about the 6.1% duty tax? I’m guessing GST and PST are unavoidable.
Thanks for any input on this scenario!
We’re getting a little deep for my area with the what ifs Phil.
Did Phil ever find out about those questions? My sister lives down there, and I was wondering about if she “gave” me the car what costs that would avoid.
You may actually be better off having her sell you the car at some reasonable price. CBSA will charge you duties on the red book price for a gifted vehicle, but will only charge you on the sale price as long as the price seems reasonable.
Sorry, I never found out the answer. I ended up getting a Mazda3 in Canada since the difference in price was about 1000-1500. However, I went down to a Mazda dealer to get accessories.
First, as long as you know someone with a US mailing address (your buddies) you can buy it without. Some dealerships will not sell knowingly to Canadians to export. Having said that, some sales people know who to work the system. Just have to find the right one. As for “gifting”, as per the MTO website, etc, you are able to give to family once per 12 month period…and you would avoid having to pay for the PST. In your scenario about gifting from a US relative, I’m not completely sure, but a call to MTO would answer your questions. As for the 6.1% import tax, that’s only require if the vehicle was assembled/manufactured outside North America. ie: Toyota may be a Japanese Car, but depending on the model, it may be assembled in the States, so would be exempt to the 6.1% tax.
good luck
I just bought a 2008 Grand Cherokee. Im a CDN resident, but I know someone living in Arizona. I used her mailing address and my salesman said it was fine and he could sell to me. I picked up the car yesterday, he gave me a 20-day temproray out-of-state plate and i brought it into Canada. No problems at the border.
Im not sure about my warranty situation yet though… But I saved about $25,000 after tax (thats without exagerration). I think i’ll be ahead of the game either way.
Big V8 engines are subject to a gasoline-excise tax. My 5.7L Hemi costed me $2,000 at the CDN border. I had to pay that anyways at my Ontario Jeep dealers.
I hope I can at least drive the car back to the USA for warranty work should I ever need it. Ottawa is 50 mins from Ogdensburg NY.
Wow Adam, that’s an incredible savings!
I am in the process of buying a sienna from Philly.My paperwork arrived at he border today,in 72 hours I can bring my van across to Canada without any problem.Gst is paid at the border,pst when I register van.I got an exchange rate of 1.02 for my dollar 2 days ago,so 27500usd cast me 27152cad.Toyota honors warranty,its on their website,and I save about 12 grand on the minivan.definitely worth a 7 hour drive to pick it up.p.s. dealership did all paperwork,and sent it to border crossing for me.
If one purchases the vehicle privately, what kind of paper work is needed to cross the border? I have found honda pilot 2004 in texas (did full vehicle check via a frind and dealer – great condition) and it is atleast 6000 less than here (ottawa). What kind of paper work i would need to send to the border crossing before actually reaching the border?
Thanks
Hi Adam, and Tim,
Can you tell email me the steps on how to bring in a new vehicle from Maryland where my sister lives?
Thank you very much.
Neil
I am wanting to buy and bring a new skidoo brand snowmobile across to canada from ny state. Does anyone know if i pay a tax in ny. I was told i just pay 13% after the currency exchange into canadian dollars when putting ownership into my name in Canada.