Buying a Car in the US to Save Money

Up here in the Great White North we pay a tad more for cars than our southern cousins, even though NAFTA pretty much says we shouldn’t.  I get paying freight fees to subsidize the places a bit farther off but even those are astronomical.  We in the final steps to get plates on our new Subaru and I wanted to post this as a sort of guidelines for importing a US vehicle into Canada and saving some cash along the way.

There are three main things to consider here: vehicle selection, location and costs.

Vehicle Selection

Vehicles on either side of the border do not have the same packages.  Because Americans have massive incentives to purchase vehicles, there are way more options available.  The 2.5 Limited that we purchased has zero options in Canada and over 12 in the US.  Make sure that when you are actually comparing cars, they are identical.  Otherwise all the rest doesn’t add up.

Some states have odd requirements for their vehicles and won’t match with Canadian rules.  Visit RIV to compare that.  If it doesn’t comply, don’t buy it.  It will come in imperial measurements (miles) because Americans are one of 2 countries in the entire world that have not moved to metric.  Don’t get that changed, reduces the value of the vehicle.

Location

Due to importing restrictions, there are very few borders that allow single day transfers over the border.  New York only allows it at the Lewiston Bridge near Niagara Falls for example.  Each state has their own regulations and forms to fill out to avoid state taxes, insurance and possible environmental fees.  Maggot’s is a great resource for that info.  If you can’t cross the border in a single day (the dealer will let you know what’s possible), then you will need to park it at the border and come back in 72 hours (not counting Sundays).

If you can come back, be sure to plan accordingly based on traffic patterns.  You do NOT want to be anywhere urban during rush hour (4-6pm).  Crossing the Greater Toronto Area is a nightmare.  Our trip took a bit more than 4 hours to get to the dealer and approximately 12 hours to return.

Costs

You’d think this would be the only thing but there are plenty of variables here.  There are 2 main things to understand here, first is that if the vehicle is made in North America you have no import fees.  If it is not, then you pay 6.1% on the value.  The second is that you pay your provincial tax at the border, plus a fee for A/C and a 200$ import fee for inspection.

Warranties are covered int he US and Canada.  Except Canadian dealers are going to be mad you went south and won’t do the paperwork, so you’ll have to submit a claim to the US maker for a refund.

Base price is a different matter.  In Canada, only the MSRP is public domain.  You need to pay to have access to the Invoice price so you’re missing info if you want to deal.  In the US, invoice price is available with ease.  You can even get the BlueBook / Fair Price estimate based on what other people have offered for the same vehicle.  You need to pay cash, in US funds.  Get a bank loan if you don’t have the liquid.

For example, we did some research on US prices and found the 2.5 Limited had an invoice price of $30,402.    We paid $1500 above list.  The Canadian price $38,287, after negotiation.  That’s right, $6500 in savings.  The 2.5 Limited was cheaper in the US than the base model in Canada.  By a lot.

You know how the old joke goes, the sticker price is not the final price?  Well in Canada that’s certainly the case with all the extra fees.  In the US, the price is the price.  Amazing.

Lessons Learned

After the run through it all I would posit the following lessons learned.  First, figure out your travel details above everything else.  Dealers will match prices, make the trip make sense.  If that means you drive to a town 2 hours away, park the car 3 days and come back, then it’s 8 hours travel total over 2 days.  If you want it over with, you might be driving 12-24 hours when it’s all said and done.  Very exhausting.

You can do all the paperwork yourself or get the dealer to do it for you.  We went with the dealer for lack of time but there’s not much that needs to be done.  Unless you want it done in a single day.

Summary of Steps

  • Research the vehicle and understand the options.
  • Find the invoice price for your options, add ~$1500 for dealer profit
  • Search dealer websites for your vehicle and make calls
  • Figure out your border crossing strategy (1 day or 72 hour wait)
  • Pick a dealer location that works with the strategy
  • Find out that state’s taxation structure
  • Negotiate with the dealer for additional services (extended warranty, car starter, paperwork, etc…)
  • Get a final price, organize a pick up date and tell them what border you are going to take
  • Talk to your bank to get the money set aside, certified check in US funds for the dealer
  • Talk to your insurance broker, get them to call the dealer and arrange insurance
  • Add $100 for A/C fee, $200 for import fees and then your provincial taxes in Canadian funds for the border crossing.
  • Leave early to get to the dealership early.  Takes an hour of paperwork and inspection. You need the Vehicle Title, Bill of Sale and Warranty claim to cross the border.   You also need a temporary license for the state.
  • Reach the border, visit the US export office.  Give them the required paperwork to complete the export.  Takes 5 minutes.
  • Reach the Canadian border terminal, after you cross, go inside to the Import office.  Pay the additional fees (A/C, import, taxes) and fill out Form 1 for RIV
  • Go home, wait a few days for Form 2 to come in the mail.  Visit a Canadian Tire for the final inspection.  Submit the form and go and get your plates.

All told, it took us about 18 hours for the entire trip and we saved ~$6000 dollars, including gas, incidentals and paperwork.  Extremely worth the effort.

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