Import from US to Canada to save money

[Carmageddon]

Someone asked, "... do US Dealerships/financial institutions provide financing to Canadians?"

Any Canadian who's been financed by Tesla should be able to answer. But here's some general infro:

Financing is such a significant profit operation that the seller would prefer financing over cash. If the money is loaned by Tesla, there's a chance that they don't care if you're a Yank or Canuk. But if Tesla goes through a US financial organization, I doubt it will lend to a borrower with a non-US address and no US credit history.

I actually have an RBC US bank account, how to check if I have US credit history? and then perhaps its reason enough to keep it active exactly to be eligible for US financing, I was thinking of closing it as recently I stopped needing it.

Sponsored

 

[Fujisan]

Could you please tell about your past experiences, how did you do the financing in the US?
Sure, but do US Dealerships/financial institutions provide financing to Canadians?

I did not finance. I arranged a funds transfer to the dealership/individual I bought the car from with my bank here in Canada. I have no idea how/if you can get financing in the US, but I highly doubt that any bank will loan you money unless you have an address in the US and can demonstrate credit history. You could probably work something out with your local bank here in Canada rather than financing through Tesla (you'd likely get a better rate than what Tesla is offering).

 

[Fujisan]

I actually have an RBC US bank account,

I assume that's just a Canadian bank account with US dollars in it, it's not the same as a US-based bank account that would show your credit history in that country.

 

[alan auerbach]

I actually have an RBC US bank account, how to check if I have US credit history? and then perhaps its reason enough to keep it active exactly to be eligible for US financing, I was thinking of closing it as recently I stopped needing it.

That's not the same as having a US credit history -- for which you'd need a US address, US credit cards, US mortgages or loans, or suchlike.

Before cutting the check, the lender always asks, "Exactly what do I do if the borrower defaults?" In the state where the lender operates, the lender knows every word of the state laws related to loan payback, has specialist lawyers at the ready, knows the court systems, has the wherewithal to repossess and sell the item loaned on, etc. If the borrower is outside that jurisdiction, the lender has none of these sometimes-needed tools. Additionally (at least in some cases), commercial lenders need a business licence to lend and collect back, and residence within that jurisdiction would be a primary requirement for that authorization.

That's why a Canadian is not very likely to secure a loan from a US lender for a vehicle that will be taken back to Canada.

 

[CostcoSamples]

That's not the same as having a US credit history -- for which you'd need a US address, US credit cards, US mortgages or loans, or suchlike.

Before cutting the check, the lender always asks, "Exactly what do I do if the borrower defaults?" In the state where the lender operates, the lender knows every word of the state laws related to loan payback, has specialist lawyers at the ready, knows the court systems, has the wherewithal to repossess and sell the item loaned on, etc. If the borrower is outside that jurisdiction, the lender has none of these sometimes-needed tools. Additionally (at least in some cases), commercial lenders need a business licence to lend and collect back, and residence within that jurisdiction would be a primary requirement for that authorization.

That's why a Canadian is not very likely to secure a loan from a US lender for a vehicle that will be taken back to Canada.

Well that makes sense.

I have a feeling Tesla will force all Canadians living in Canada to pay the Tesla Canada prices regardless of factory pickup. Tesla needs to know where you live for warranty and service, and what about FSD software - I assume those features are also tied to your Tesla account so they can comply with local laws.

 

[TheLastStarfighter]

Well that makes sense.

I have a feeling Tesla will force all Canadians living in Canada to pay the Tesla Canada prices regardless of factory pickup. Tesla needs to know where you live for warranty and service, and what about FSD software - I assume those features are also tied to your Tesla account so they can comply with local laws.

All car companies are like this. And the more premium the car, the bigger the Canuck Tax. I was looking hard a buying a BMW 440 convertible a while back. The typical Canadian mark up vs US is over 30%. When the dollars are close, it's insane, and they seldom adjust it. They may not sell you a new one. I was looking at a 2-year old car from salt-free Florida. You have to have it certified for Canadian driving when it gets here - typically just ensuring it has daytime running lights. There might be duty depending on the country of origin. In Nova Scotia you have to pay the HST when you register it. I'm not sure if the warranty remains valid. You must finance it in Canada. For what I was looking at, my bank was offering me around 6%, typical for a used car. There are companies that make a living importing vehicles for people.

For me I just decided it wasn't worth that hassle. I think there is definitely good savings to be had when the dollars are close, but I just found a good car at a good price locally. The higher the price of the car, the more it starts to make sense. 30% on a 100k CT gives you a lot of room to pay for travel/shipping, importing fees, inspections and higher loan interest rates. But the flip side is the higher cost on a higher loan rate means you may eat it pretty quick on a 5-8 year term. Even 2% on a 80k loan will burn half of your savings by the end.

 

[Carmageddon]

All car companies are like this. And the more premium the car, the bigger the Canuck Tax. I was looking hard a buying a BMW 440 convertible a while back. The typical Canadian mark up vs US is over 30%. When the dollars are close, it's insane, and they seldom adjust it. They may not sell you a new one. I was looking at a 2-year old car from salt-free Florida. You have to have it certified for Canadian driving when it gets here - typically just ensuring it has daytime running lights. There might be duty depending on the country of origin. In Nova Scotia you have to pay the HST when you register it. I'm not sure if the warranty remains valid. You must finance it in Canada. For what I was looking at, my bank was offering me around 6%, typical for a used car. There are companies that make a living importing vehicles for people.

For me I just decided it wasn't worth that hassle. I think there is definitely good savings to be had when the dollars are close, but I just found a good car at a good price locally. The higher the price of the car, the more it starts to make sense. 30% on a 100k CT gives you a lot of room to pay for travel/shipping, importing fees, inspections and higher loan interest rates. But the flip side is the higher cost on a higher loan rate means you may eat it pretty quick on a 5-8 year term. Even 2% on a 80k loan will burn half of your savings by the end.

That is EXACTLY right, Financing in Canada is very, very expensive when not done through dealership.
Anything be it renovation, appliances, used car, RV, boat - financing is about 4-7% in Canada, while in the US it is a LOT cheaper.
I don't understand that, why other lenders don't get into this lucrative market?

Even when I called the banks to inquire about financing a used car, they told me straight out I'd get better rates via the (st)ealerships, even when they use the same financial institutions.. its crazy.

 

[alan auerbach]

That is EXACTLY right, Financing in Canada is very, very expensive when not done through dealership.
Anything be it renovation, appliances, used car, RV, boat - financing is about 4-7% in Canada, while in the US it is a LOT cheaper.
I don't understand that, why other lenders don't get into this lucrative market?

Even when I called the banks to inquire about financing a used car, they told me straight out I'd get better rates via the (st)ealerships, even when they use the same financial institutions.. its crazy.

That's because of the regulatory restrictions Canada's federal government places on chartered banks (unlike the US, where there can be single branch of Billy-Bob's Business Bank -- which can make bad loans and go under).

 

[Big T]

Do US loans (banks) typically not “keep” the actual paper copy title of the vehicle until it’s paid off in full? I know for snowmobiles and motorcycles that’s the way it has been in the past.
If so - you are not even attempting to export it until you have the title in hand (ie no outstanding loans on it).

I also suspect Tesla will NOT be adding the CT to the RIV eligible cars to export/import to Canada anytime soon (will be years after release) as long as the demand outways supply in both markets. They would be cutting into their profit margin for no real reason.

People have already commented on warranty - would probably not be valid just like most cars/trucks imported. Would suck not to be able to get updates (every 1-2 months like my model 3) if they cancelled them unless you brought it back to the states or pay at the service center, etc.

we can dream, but don’t think this will be an option for a while.

 

[MAJMurphy]

I’m Canadian, living in Texas. Without a credit history in the US, you are out of luck for a US loan. If the car indicates Made in USA, there are no duties. For my US Audi, I am told the warranty carries into Canada. Likewise, I understand there are no certification issues for newer cars brought into Canada. The freight costs for my SQ5 from Dallas to Ogdensburg were projected at $2500. But that’s where my knowledge ends as I haven’t tried to import a vehicle into Canada yet. I’m sorry for my ignorance but would we not be paying sales tax in the US and then again on import to Canada? I paid sales tax for my Audi and was told I would have to pay again based on black book prices when I crossed the border. That’s actually the reason I haven’t moved it yet.

 

[Fujisan]

would we not be paying sales tax in the US and then again on import to Canada?

I'm pretty sure you do not pay state taxes if you are buying a vehicle and the address on the invoice is out of state, and you are not plating the vehicle in that state. Similar to an Ontario business selling (and delivering goods) to a customer with an Alberta address; it would only charge GST at 5% and not HST or provincial tax.

Your case is a bit special because your address is now in the US, so then US importation rules would apply and you could indeed have to pay an import tax on your vehicle.

 

[alan auerbach]

All car companies are like this. And the more premium the car, the bigger the Canuck Tax. I was looking hard a buying a BMW 440 convertible a while back. The typical Canadian mark up vs US is over 30%. When the dollars are close, it's insane, and they seldom adjust it. They may not sell you a new one. I was looking at a 2-year old car from salt-free Florida. You have to have it certified for Canadian driving when it gets here - typically just ensuring it has daytime running lights. There might be duty depending on the country of origin. In Nova Scotia you have to pay the HST when you register it. I'm not sure if the warranty remains valid. You must finance it in Canada. For what I was looking at, my bank was offering me around 6%, typical for a used car. There are companies that make a living importing vehicles for people.

For me I just decided it wasn't worth that hassle. I think there is definitely good savings to be had when the dollars are close, but I just found a good car at a good price locally. The higher the price of the car, the more it starts to make sense. 30% on a 100k CT gives you a lot of room to pay for travel/shipping, importing fees, inspections and higher loan interest rates. But the flip side is the higher cost on a higher loan rate means you may eat it pretty quick on a 5-8 year term. Even 2% on a 80k loan will burn half of your savings by the end.

"You have to have it certified for Canadian driving when it gets here - typically just ensuring it has daytime running lights."

There's more. Just off the top of my head, speedometer in kilometers, labels in French as well as English, bumper standards, and document of compliance with any recalls.

 

[Crissa]

Only the warning stickers need to be in french, not all of the labels. So the one under the visor, etc.

Which is silly, those things rarely survive into the used market. Do you have to replace them if you resell it?

-Crissa

 

[alan auerbach]

Only the warning stickers need to be in french, not all of the labels. So the one under the visor, etc.

Which is silly, those things rarely survive into the used market. Do you have to replace them if you resell it?

-Crissa

French labels are required federally. I didn't know that some could be on all cars not as a federal requirement but to attract francophone buyers.

As for replacing them when selling, that's a provincial, not a federal matter, and I know only Ontario's rules, but I'd guess that the other provinces are similar. A new owner, in order to road-licence a used car, needs a "safety." This is a document from a licenced mechanic who is authorized to do so, that says it's been inspected and meets Ontario's requirements. There are about 50 of them, all dealing with safety (such as lights, horn, intact glass, good tires and brakes, no body rust-through, solid frame). I don't think bilingual labels are on that list. If I find out, I'll amend the previous sentence.

 

[Crissa]

Well, my car has labels in like, six languages. x-x Japanese, Korean, Simplified Chinese (Taiwanese), Spanish, French, and English.

All the stickers had to go. That's too much.

-Crissa

Sponsored