Canada and the United States share a particularly close relationship, especially when it comes to motor vehicles. Every day, new and used vehicles cross the border between the two countries, creating an automotive economy that many are interested to enter. . If you’ve thought about importing used cars from USA to Canada, then you know what we’re talking about.
However, do you know what’s involved with the process? Do you know how to clear U.S. and Canadian customs (importers) on Canadian car auction sites? Do you know how duties and taxes are assessed? If not, then you’ve come to the right place. Below, we’re going to review everything that you need to know if you’re importing a car from Canada or importing used or salvaged vehicles from the United States into Canada.
Purchasing Used Cars From USA Online Car Auctions
There are, of course, a number of different options you can consider when purchasing a used car in the United States for export. However, the very best option is online used car auctions. Through these online auctions, the average consumer and the importer-exporter who is without a dealer’s license can gain accesses to the plethora of used car auctions taking place across the United States each and every day. Because of this, it’s possible to save up to 70% or even 80% on the cost of a used vehicle.
Better yet, though, is how convenient used car auctions are. From the comfort of your own home, you can bid on and purchase used vehicles at incredibly steep discounts. Create an account and make a deposite with the online car auction site. This deposit is only necessary in order to establish your bidding power, with the size of the deposit typically representing 10% of your total maximum bid.
After getting set up, you’ll have an extensive database of used car auctions at your fingertips. To help you through the process, you’ll also be connected with an auction agent or broker. This person can help you with everything, from establishing a sound bidding strategy to connecting you with used car auctions that cannot be displayed publically through the online car auction website’s database. All told, this gives you unprecedented power to get the best deal on the used car (or cars) that you want.
Shipping Salvage or Used Cars From USA to Canada
There are a number of different options you can consider when shipping a used vehicle from the United States to Canada. Most notably, it’s possible to ship a vehicle to Canada via roadways, rather than by air or by sea. There are a number of different shipping services across the country that can provide over-the-road transportation of your used vehicle into Canada. When selecting one, be sure to research the shipping company’s competence with clearing both U.S. and Canadian customs.
Generally speaking, shipping your used U.S. vehicle to Canada via a car-carrier will be the least-expensive option available. However, you may also consider shipping your vehicle by sea from certain regions of the United States. If you do this, you will have the option of choosing between traditional container shipping and something known as RORO shipping, which stands for “roll-on roll-off”. This latter options is by far the cheapest and would be advisable unless your used vehicle is particularly valuable and requires the protection of an enclosed container.
If you elect to ship your vehicle to Canada by a sea-bound vessel, there are a number of different ports to which you can ship your vehicle. To research these various ports, you can consult this list of Canada Port Authorities.
Clearing Your Used Vehicle Shipped to Canada Through U.S. Customs
In order to clear your vehicle through U.S. customs on its way to Canada, you will need to do two things. First, you will need to make sure that you have the proper documentation in order. Second, you will need to ensure that you present your vehicle for inspection by U.S. customs at least 72-hour in advance of its ship date to Canada.
As far as documentation is concerned, you will need to ensure that you have the vehicle’s Original Certificate of Title. In addition, you will also need either two complete copies of that Certificate of Title or a certified copy, which can be obtained from a local DMV branch located in the state in which the car has been registered.
Present the documents and vehicle to U.S. customs. They will ensure that the documents accurately reflect the vehicle in question by cross-referencing the Vehicle Identification Numbers (VINs), and they will also ensure that nothing illegal has been stowed away aboard the used car. Provided everything checks out, U.S. customs will clear the vehicle and allow Canadian customs to conduct their own inspection.
Should you have any questions about clearing your used U.S. vehicle being imported into Canada, please consult the official website for U.S. Customs and Border Security, which provides this informative guide.
Getting Your Used or Salvage Car Through Canadian Customs
Given the close relationship between the United States and Canada, clearing a used vehicle through Canadian customs is actually an incredibly straightforward process. You only need to complete a few simple steps in order to get your car successfully across the border.
First, before presenting your used U.S. vehicle to Canadian customs, you will firstto obtain something known as a “recall clearance letter”. This is simply a letter that states that the vehicle you’re importing is not subject to an active recall by its manufacturer. To get this letter, you can simply contact the vehicle’s manufacturer, obtain the letter from the person that sold you the vehicle, or simply consult the manufacturer’s website to check for any recall notices.
With this document in hand, you will then need to present the following documentation to Canadian customs:
- The Original Certificate of Title
- The Original U.S. Registration for the Vehicle
- Proof of Insurance
In turn, you will receive a form entitled “Form 1” that you will need to fill out. After checking the above documentation and completing this form, Canadian customs will stamp your documents, collect a $200 fee, and send you on your way. However, the process isn’t entirely complete.
Over the next week, you should receive “Form 2” in the mail. Once you do, you will need to complete this form, and then take it, “Form 1” and the above documentation (including the recall clearance letter) to a local branch of the Registrar of Imported Vehicles (RIV).
There, the RIV will inspect your vehicle, ensuring that it meets all of Canada’s safety and environmental standards. Provided that the vehicle was mostly manufactured in a NAFTA nation (the vehicle’s VIN number will begin with a 1, 2, 3, 4 or 5), this shouldn’t an issue, as these safety and environmental standards are mostly the same across NAFTA member nations. Should any modifications to the vehicle be necessary in order to come into compliance, you will have a 45-day period in which to make these modifications.
If everything checks out, the RIV will stamp your documents, at which point you can present your vehicle for registration. When you do so, you will need to pay the GST or HST for your respective province. Upon doing that, your registration and license plates will be mailed to your Canadian home address.
Should you have any additional questions about the process for clearing your imported used U.S. vehicle through Canadian customs, please consult the official website for the Canada Border Services Agency (CBSA).
Import Duties and Taxes for U.S. Vehicles Imported into Canada
The good news when importing into Canada, in many cases, you will not be responsible for an import duty. This is because Canada and its provinces are members of the North Atlantic Free Trade Agreement (NAFTA).
That said, there are certain instances when you may be required to pay an import duty. This is in cases when less than 62.5% of the car’s value originates in a NAFTA member nation. When importing into Canada through an online car auction, this is something that you should keep in mind. However, the import duty for cars that do not qualify for duty-free import is only 6.1%.
There is no duty for imported used vehicles that meet the NAFTA requirement, there are two kinds of taxes that an imported used vehicle may be subject to.
- Goods and Services Tax (GST), and
- Harmonized Sales Tax (HST)
These two taxes vary depending upon the Canadian province to which you’re importing your used U.S. vehicle:
- Alberta (AB) – GST of 5%
- British Columbia (BC) – GST of 5%
- Manitoba (MB) – GST of 5%
- New Brunswick (NB) – HST of 13%
- Newfoundland and Labradour (NL) – HST of 13% (Becomes 15% in 2016)
- Northwest Territories (NT) – GST of 5%
- Nova Scotia (NS) – HST of 15%
- Nunavut (NU) – GST of 5%
- Ontario (ON) – HST of 13%
- Prince Edward Island (PE) – HST of 14%
- Quebec (QC) – GST of 5%
- Saskatchewan (SK) – GST of 5%
- Yukon (YK) – GST of 5%
In addition to the above taxes, there may be an excise tax for which an imported used vehicle is responsible. This applies to cars that are designated as fuel-inefficient, as determined by a weighted fuel consumption rating:
55% of City Fuel Consumption + 45% of Highway Fuel Consumption = Weighted Fuel Consumption Rating
Once you have determined the weight fuel consumption rating for your vehicle, the excise tax is assessed according to the following rates:
- 13 to less than 14 Liters per 100 Kilometers: $1,000
- 14 to less than 15 Liters per 100 Kilometers: $2,000
- 15 to less than 16 Liters per 100 Kilometers: $3,000
- 16 or more Liters per 100 Kilometers: $4,000
If you’re interested in learning more about excise tax on fuel-inefficient vehicles, consult this guide by the Canada Revenue Agency.
(Please Note: Canada also assessed a $100 excise tax on vehicles that have built-in air conditioning.)
Should you have any further questions about import duties and taxes for used U.S. vehicles imported into Canada, please consult the website for the Canada Border Services Agency.
The Used Car Market in Canada
Unsurprisingly, Canada has the largest automotive market outside of the United States in North America. Recently, there has been a trend toward lighter passenger vehicles and trucks among the Canadian auto buyer. This trend continues to show signs of increasing in momentum.
For those interested in importing used U.S. vehicles into Canada, there’s this interesting statistic provided by the United States Department of Commerce and the International Trade Administration: The average lifespan of vehicles on Canadian roadways is currently 11.5 years. Canadians are growing increasingly accustomed to older-age vehicles. Something that has been buttressing the used vehicle market there. The economic recovery in North American in recent years has led to increased interest in new vehicles among Canadian buyers.
The Most Popular Used Vehicles in Canada
As mentioned, light trucks are incredibly popular with Canadian auto buyers. Something that presents an interesting opportunity for someone importing used vehicles into Canada from the United States. The two top best-selling vehicles in Canada for 2015 were two American-made light trucks. The Ford F-150 and the Dodge Ram. These are both two kinds of vehicles that can readily be located through online car auctions in the United States.
When it comes to passenger vehicles, the Honda Civic reigns supreme. They are as popular in Canada as it is elsewhere around the globe. When importing Honda vehicles, and other Asian makes, note that import duty applies to vehicles not manufactured in NAFTA nations. Other notable vehicles to consider when importing used cars into Canada are Dodge Grand Caravan and the Ford Escape. Both of them enjoy sales that land them in the top-10 most popular vehicles in Canada.