How to import a car from the United States

Back when the Canadian dollar and the U.S. dollar traded closer to the same value, Canadians everywhere lamented paying more for things than our U.S. counterparts.

Books were a very common item. Books with a sticker price of $19.99 in the United States sold for $24.99 or even $29.99 up here in Canada. When the currency difference is a lot, this type of difference is justifiable. But when the currencies trade at the same level? It sure seems like Canadians are getting ripped off.

Cars are even worse. I’ve seen the exact same make and model of car sell for $5,000, $10,000, or sometimes even more north of the border. It got to the point where a Canadian could fly down to a large northern U.S. city, stay a few days, buy a car, drive it back, and still make a tidy profit.

Even though the Canadian dollar is now worth less than the U.S. dollar, there are still situations in which it makes more sense to import a car from the United States. Here’s how anybody can do it:

Pay attention to models

First, you need to pick a car. This is much easier to do using the internet than it used to be over the phone. Keep in mind that importing a compact or subcompact car usually doesn’t make sense, since the difference in the price isn’t enough between the two countries. Most of the time, it only makes sense to import a car from the United States if you are buying a truck or SUV.

Make sure you contact the dealer before you book your plane tickets. Many dealers -- especially those close to the border -- won’t deal with Canadian buyers. They don’t want to get into trouble from their parent car company. Naturally, that parent wants business to go to its Canadian dealers, or else everybody would just cross-border shop. Many people report that it’s much easier to get a dealer to play the game if you purchase used cars instead of new cars.

Remember to factor both the amount of gas you’ll need to drive home and the time spent driving into your calculations. Saving a few hundred dollars might not be worth it if you spend $100 on gas and drive for 12 hours to get home.

Additional costs

Importing a car from the United States isn’t quite as simple as flying down there and driving your new car home. You not only have to fill out some paperwork, but you also have to pay GST on the purchase as well.

The first thing you need to do is let the Registrar of Imported Vehicles know you’re importing a vehicle into Canada. There’s a $195 (plus GST/HST) fee for doing so. The Registrar will help you with all sorts of things, including letting you know about any additional fees you might have to pay for things like the air conditioning excise tax.

At the border you’ll be required to provide the border agents with various documents, including the car’s title, an inspection, a form authorizing the car to be exported from the United States, and a vehicle import form. Canadian Customs will then verify the vehicle is admissible into Canada. If you haven’t paid your Registrar of Imported Vehicles fee yet, you owe it at this point.

Finally, the federal government wants its share of the taxes. All cars imported into Canada are charged GST on the price of the car converted back to Canadian Dollars. Cars imported from the United States into Quebec are also charged Quebec Sales Tax.

Should you do it?

In total, these costs can add up to thousands of dollars, especially on a car worth $40,000 or $50,000. Add that to the Canadian dollar’s decline versus the U.S. dollar -- which makes everything bought in U.S. currency more expensive -- and I say it probably isn’t worth it for you to import a car from the United States.