Tag Archives: Canada
The following is a guest post by Sustainable Personal Finance. Living in Canada, SPF is able to provide an interesting perspective on car buying. He and his wife were able to save thousands of dollars by importing a car from the U.S. instead of buying locally. Scroll down for a checklist of all the steps to import a car into Canada.
Why do people import cars to Canada?
Ever wondered why Canadian retailers get so nervous when the “Loonie” gets close to parity with the US green back? Simply put, Canadians seemingly pay 20%-30% more for most consumer goods than do our American cousins. Fair? Hardly. Who can blame a Canadian who wants to save his or her hard earned money?
Americans surely avoid buying Canadian when the two dollars have the same currency value. When this occurs Canadian exports to our largest trading partner decrease, various industries (such as the film industry) pull out of movie making and our tourism industry takes a big hit as less Americans spend their hard earned money in a place where it costs more for everything. Gasoline? Way cheaper in the U.S. Want to buy a book in Canada? Check the back of the book and it costs 25% more in Canada. Want a loaf of bread? Expect to pay more in Canada.
While the noted examples are small ticket purchases, buying a new (or used) vehicle is a much bigger deal. When the two dollars are at parity, a car in Canada will cost the consumer 20%-30% more than if the consumer purchases the vehicle in the United States. If a Canadian wants to purchase a car that costs $20,000 in the U.S.A they can expect to pay $24,000-$26,000 in Canada (before tacking on a very high taxation rate that ranges from 8%-15% dependent on the province the car is being imported to).
I will state that this discrepancy is not the Canadian car dealers’ fault. The invoice price and MSRP are dictated to them by the parent manufacturer. There is a double standard as to how these manufacturers treat dealers on each side of the border and it is akin to highway robbery. We recently imported a car from the U.S. and even after a small currency conversion fee and despite the Loonie not being at par at the time, we saved over $9,500 which ended up being 77.4% of the price of the same car sold in Canada.
Importing is not as difficult as it sounds
You may think that duty taxes, hassle at the border or at your local dealership, or warranties being void when you cross the border are a detriment to importing a new vehicle, but they’re really not. The horror stories you hear are usually generated by Canadian dealerships who are desperately seeing an increase of U.S. imports and a decline in their sales.
With some careful research and vehicle selection you too can save thousands upon thousands of dollars. Continue reading