Purchasing Car in Canada as a US Resident
(Information supplied on this topic is from experience only, and in no way reflects policies, regulations, or laws from either Canada, USA, Manitoba, or Minnesota).
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Purchasing Car in Canada as a US Resident(Information supplied on this topic is from experience only, and in no way reflects policies, regulations, or laws from either Canada, USA, Manitoba, or Minnesota). |
General:
You may bring any vehicle - but it must be used, and NOT leased.
This discussion deals with a US residents living in USA, but traveling to
back (visiting) Canada to purchase a vehicle to import back into the USA. If you are
a resident of Canada, and are just about to move to the USA, see Bringing a Car to the USA
There is a myth that a vehicle must be at least one year old. This is just that - a myth. A used vehicle is defined as one that has had a previous owner. If the vehicle is being purchased from a dealer, and the vehicle had a previous owner, it qualifies. This is NOT a customs issue, but an agreement (AutoPact) that dealers in Canada and USA are bound by. So, your used vehicle can technically be 1 day old, as long as you are not the original "end" owner.
The steps below deal with a US resident (Minnesota shown as example - may vary in other
states!!) going to Canada, purchasing a vehicle, and returning
to Canada with this vehicle. Steps are normally completed in the order shown.
At the Dealership:
1) You will pay the purchase price, and if you can provide proof that
you are a NON-RESIDENT of that province, you will only pay the GST tax. You will be able
to get the GST refunded later by mail, or if low enough - sometimes at the Canadian Duty
Free Store.
2) Obtain a document called a Manufacturer's Statement/Certificate of
Origin and Vehicle Title. This document is a Provincial document that the dealers
fill out. It has a different name in Canada. Save this document - it is needed
for vehicle registration later.
3) Obtain a bill of sale, showing either or both (if married) spouses as
owner of vehicle. You can NOT lease a vehicle as a NON-RESIDENT of Canada from a Canadian
dealership. There are no regulations, but checking with Ford, GM, and Chrysler - none of
them permit the ORIGINATION of a lease in Canada to NON-CANADIAN residents - the dealer is
the one that will not allow it due to AutoPact agreements between USA and Canada.
4) 7 day license and insurance card/sticker (Currently $36 CDN$ in
Manitoba). Even though your vehicle is possibly insured from your US based insurance
company, you will need this 7 day permit in lieu of a license plate. I have confirmed with
both the RCMP and the MN-US State Patrol that this is an acceptable document to have while
traveling back to the USA. US State Patrol advises making sure you have the bill of sale
while traveling as proof of ownership may still be required if stopped.
5) A dealer generally will NOT sell you a brand new vehicle. Each
domestic dealer (Ford, GM, Chrysler), and others for the imports have agreements in place
between each other (in Canada and USA, that is) that they will NOT sell a NEW vehicle if
the purchaser of such vehicle is from opposing countries (ie Canada and USA). However,
contrary to believe, the dealer CAN sell you a used vehicle - even if the vehicle is only
used for a few months. There used to be a belief that the vehicle had to be ONE YEAR old
to export without duties to the USA. This is simply not true. The age of a vehicle has
nothing to due with possible duties.
At the Customs Port of Entry (requirements):
1) Contact the manufacturer of the vehicle (2-3 weeks before importing),
and ask if the vehicle complies with all applicable U.S. Federal motor vehicle safety
standards (FMVSS). The letter from the manufacturer must identify your vehicle by the
Vehicle Identification Number (VIN).
2) If the manufacturer letter states that the vehicle complies with U.S.
FMVSS, except for minor labeling requirements, you have an acceptable letter. This letter
along with your vehicle registration should be presented to U.S. Customs at the border.
U.S. Customs will review the manufacturer letter to assure that the vehicle complies. (DOT
approval of the manufacturer letter was discontinued as of April 8, 1997.)
3) If the manufacturer letter states that the vehicle meets all U.S.
FMVSS, except for the speedometer, or headlights, you may have these components replaced
at a dealer authorized by the factory to repair your vehicle. In addition to the documents
cited in item 2, above, you must present the invoice for the speedometer or headlight
replacement to obtain U.S. Customs approval. (Note by Neil: Nearly ALL vehicles have
acceptable headlights and speedometer. An acceptable speedometer need only have MPH
indicated. The odometer does not have to display miles.)
4) EPA approval is also required. You may call the EPA information line
at: (202) 564-9660. Normally, the letter above will also indicate that the vehicle meets
EPA standards, and an EPA sticker may have also been provided to you with the letter.
5) You will fill out a US Customs declaration stating value of car (as
per your bill of sale but in US$), VIN #, and your name and address.
6) Customs do not care if you have a vehicle that is brand new, slightly
used, or really used. However, you generally can NOT purchase a brand new vehicle directly
from the dealer (this is a manufacturers agreements between Canada and USA, and has
nothing to do with Customs).
7) Duty MAY be applicable if the car is manufactured from foreign
content. Foreign content is defined as having content from outside of Canada and/or USA.
Insurance for Vehicle:
1) Obtain insurance for vehicle when you get back to Minnesota. Best to
do this at the end or beginning of month for many companies as insurance is sold in a
monthly block.
Licensing Requirements for Minnesota (at County Licensing Office):
1) Need a Manufacturers Statement/Certificate of Origin and Title (from
dealer). Make absolutely SURE you get this document from the dealer. Your bill of sale is
not good enough.
2) Need proof of Insurance (ie NOT the 7 days temp insurance, but
insurance purchased in Minnesota)
3) Customs Clearance Letter or Customs declaration card, as issued by US
Customs at the Port of Entry
4) PAY state tax and plate fees. State tax IS payable as the vehicle has
never been registered before. State tax is NOT payable if the vehicle had been registered
(to yourself!) for 60 days or more, such as if the vehicle had been registered in Manitoba
by MPIC for 60 days. (This is a Minnesota DMV requirement). This is not normally possible,
unless you were a resident of Canada for at least 60 days while owning the vehicle. But
then you have paid the PST, right? Nothing gained, nothing lost.
5) Receive new plates, and tags and install them on your vehicle.
So, what did I learn? That I will NOT pay PST. I WILL pay GST, but get that refunded. I
WILL pay state tax on purchase price. Net gain? Got 7% GST back, and the vehicle purchased
was cheaper in Canada.
Things to Consider:
Here are some things to consider when bringing across your Canadian vehicle to the USA.
The biggest one is when it becomes time to sell it. It will have a odometer with
kilometers only, and a speedometer with both kms and miles (but the miles will be
in small letters). We checked and asked around, and most dealers, right off, would be reluctant
to accept a Canadian manufactured vehicle for trade in, just based on that. You could
consider getting a dealer in the USA to install a new odometer/speedometer, but I believe
that is a costly option.
Your other option is just to use the vehicle in the USA, and bring it back up to Canada
and sell it there. These are just some things to think about.
Please feel free to contact