Buying a Car in Canada From The U.S – Is It a Good Idea? What’s the Process?
Are you planning to buy a car in Canada and import it back to the U.S? Let’s see if it’s a good idea and discuss the process and things you need to be prepared for before purchasing a car in Canada.
Buying a car in Canada and importing it to the U.S is an easy process these days. In fact, it has become so simple that people have begun to turn a blind eye to the added hassle involved in importing a car to the U.S when planning on shipping a car across the country.
From the kind of paperwork to the fees required, to how every step of the way must be followed perfectly – all of these things are taken care of by the car transport company.
But shipping your car comes at a later stage, first, you need to decide whether o not it’s a good idea to buy a car in Canada and import it into the U.S? Let’s see:
Should You Buy a Car in Canada If You’re From The U.S?
To be honest, you shouldn’t, and there’s a good reason for this; cars are more expensive in Canada than in the U.S. This is because most manufacturers are located in the U.S, so needless to say, the prices are lower. When these manufacturers haul the batches of vehicles to dealers in Canada, the car transport cost is added to the price tag, making them more expensive.
However, keep in mind that when the Canadian dollar is lower than the USD, and you’re paying in USD, you may find Canadian cars slightly cheaper. However, if you factor in the HST/PST/GST and other taxes when importing it to the U.S, you may not really save any money.
Nevertheless, buying a car in Canada from the U.S is still possible and here’s why most people do it:
They buy classic vehicles that are not found in the U.S. They do this for one of two reasons:
- Sentimental Value
- High Profit
Maybe a car enthusiast came across their dream vintage car on an auction site in Canada and decided to purchase it and bring it back to the states.
Or, maybe someone buying and selling classic cars found a rare edition in Canada and knew it would be sold for a lot more in the U.S and decided to bring it here.
Since there’s a sentimental value attached to vintage vehicles, their buyers happily pay the asking price resulting in higher profits for the seller.
Where to Buy Classic Cars in Canada?
If you’re thinking of buying a classic vehicle in Canada and importing it back to the U.S, and if you’re not physically present in Canada, then you can use online auction websites. There are many leading online auction platforms up north, including ADESA, Manheim, and TradeRev, where you can find almost any vintage or recent vehicle listed for auction.
Just make an account, search for your car, use filters to skim past the vehicles you don’t need, find the listing of your preferred vehicle and place your bid. However, if you’re new to online auctions, make sure to read this guide to get insights to best bidding practices.
What Are the Requirements For Importing Car into the U.S From Canada?
Complying with D.O.T:
Your vehicle needs to be 25 years or older than that to be compliant with the Department of Transportation of the U.S. However, if it’s under 25 years, you will then need to get the FMVSS safety certificate, which is usually found under the car’s hood.
If your vehicle doesn’t have it, or if it has the CMVSS (Canadian version of it), you need to get in touch with the car manufacturer. They will give you a letter stating your car meets the FMVSS standards.
Once that’s done, you will have to fill out this HS-7 DOT Form to declare your vehicle complies with everything listed on here. Make sure to read all of its requirements first.
Complying With E.P.A.:
Every vehicle imported into the U.S needs to conform to the Environmental Protection Agency’s emission standards. Your vehicle should have a label under its hood called ‘Vehicle Emission Control Information.’ Even then, if it’s not there, your car may still have the emission control system installed the U.S recognizes that.
Whether or not the car has the certificate, you need to get a letter of compliance from the vehicle manufacturer that assures the compliance of the car with U.S E.P.A. standards. Here’s the list of all U.S vehicle manufacturers with their contact details.
Once that’s done, you will have to fill this 3520-1 E.P.A. Form to declare your vehicle complies with everything listed on here; make sure to read all of its requirements first.
Custom and Border Protection Form:
After meeting the D.O.T. and E.P.A. standards, you also need to fill out the C.B.P. Form 7501. This will be shown at the border to the customs office, where you may pay a 2.5% duty on your car’s purchase price.
What To Consider When Buying a Car in Canada That You’ll Import to the U.S?
- Check History: When buying a used vehicle in Canada, make sure to check its history, including accidents, damages, insurance claims, and thefts. You can use services like VinAudit to do that.
- Check its Manufacturing Location: Make sure to find out where the car was made originally, as this can save you a lot of money in duty. If it’s Canadian-made, it might be duty-free.
- Check for Duty Exemption: If you need to pay the duty, you or your family members might be able to use your duty exemptions for the amount owed.
- Check Tax Offset: The G.S.T. is 5% when buying the car in Canada; see if this can be offset against state use tax in your home state. Furthermore, if you’re not a Canadian resident, you might be exempted from PST.
- Have the Car Cleaned: The U.S Department of Agriculture requires any imported vehicles to be steam-sprayed and cleaned before coming to the border. They don’t want any foreign contaminants coming inside.
After The Import:
- Register your vehicle at the Depart of Transportation in your state
- Get auto insurance on your car
- Pay any taxes you owe and get new licensed plates
- You may need to have your car checked or tested for emissions depending on the state
- You’re all set once your new plates arrive
Frequently Asked Questions
Q: Are there any disadvantages to buying a car in Canada from the U.S?
You won’t be physically there to check the car’s condition, so that’s a big negative. Plus, you will have to deal with the hassle of customs clearance, gathering the paperwork, organize car transport service from Canada to U.S shipping.
Q: What are the advantages of getting a car in Canada from the U.S?
If you are thinking of buying a regular use vehicle from Canada to save money, then the only advantage you may get is saving a few bucks but ONLY if the CAD is the lowest against USD. However, Canada may have many hidden gems if you’re a collector or deal in vintage vehicles. Check online Canadian auction platforms like ADESA and TradeRev to find some.
Q: Should I buy my car at an auction or through an auto dealer?
Auctions have many vehicles that are sold for less even when they’re in excellent condition, like seized cars, stolen and recovered cars, government vehicles, and company fleets. These vehicles go for less but have a good condition, so it’s worth checking the auction platforms as well.
Q: Can U.S. citizens purchase a car in Canada?
Yes, they can, but there will be a few legal considerations (registration, license, and insurance), taxes to pay (depending on the province), and import procedures (if you take it to the U.S) to take care of, so tell the dealer your plan and ask about it all before making a purchase.
Q: Can you buy a new car in Canada and register it in the U.S.?
Yes, it is possible, but you’ll have to jump through a few hoops to get it to the U.S, including D.O.T. and E.P.A. compliance, customs clearance, paying duty, getting it registered, and getting insurance coverage in the U.S.
Canadian Car Shipping Can Help You Import into the U.S:
Moving your car from Canada to the U.S is not easy, especially if you’ve just purchsed it. There’s a lot of paperwork and tons of regulations to be taken care of before you cn get the car passed through the border. However, if you hire someone who specializes in shipping vehicles to and from the U.S, then you can get the vehicle shipped faster and won’t have to worry about the clearance and paperwork.
Canadian Car Shipping has been moving vehicles in and out of the U.S for several years. Whether you’ve purchased a new or used vehicle, we can help you safely transport it to your preferred location in the U.S. Plus, our prices are lower than the industry average, so you won’t be spending a huge amount of money on shipping. Feel free to call us at (800) 381-6907 or use our calculator to get instant car shipping quotes.
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