Why bringing a new car from the United States into Canada is not worth it

Published: August 26, 2015

Updated: July 24, 2018

Author: Luke Jones

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Buying an affordable and high quality used car in the United States and then bringing it back to Canada used to be a viable option. However, the door is slowly closing on this avenue, especially if the purpose is to save money by buying a car in the States to use in Ontario and other provinces.

The Canadian dollar is on a downward trend, so the exchange rate alone while buying a car south of the border will cost you 25 per cent. The idea of buying a used low mileage car in the U.S. and then bringing it to Canada is not a new one, with many people doing this for a number of reasons.

It used to be easier, but now there are several restrictions in place and while going down south used to be a cheaper option, it is becoming increasingly easier to just buy a used or new car in Canada. When it comes to new cars, this is even more the case as the restrictions of buying a new, admittedly cheaper, auto in the U.S. are becoming prohibitive.

Some new car restrictions include:

  • Dealers in the United States are not allowed to sell a vehicle to someone who is from outside the country, this is a bound agreement with car manufacturers.
  • You may know someone or have your own U.S. passport, but even then you will have to pay state tax when buying a new vehicle. On top of that you will have to also pay the HST (Harmonized Sales Tax) when you get back to Canada. That HST will be calculated based on the value of the vehicle in US dollars.
  • The vehicle will have to be inspected to make sure it applies safety and environmental regulations in Canada. Most new cars are made universally for global markets, so the inspection would be a formality, but the worst case scenario is having to replace equipment that does not meet Canadian standards.
  • If a manufacturing wide problem is found with the car and a recall is issued by the brand, your vehicle will not be eligible.
  • The moment you cross the border back into Canada you will automatically void the warranty on your new car. Same brand suppliers in this country are not obligated to provide any service or repair in the event of non-fault problems.

While buying a used or new car in the United States and bringing it to Canada is now hard to do, there may be some cases where it is a valid option. If you have your eye on one specific vehicle that checks the criteria you cannot find in Canada (maybe low mileage, good condition, or a rare car) then it may be worth going through the hoops and the added cost.