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Many car shoppers unhappy with the state of Canadian sticker prices are wondering if they can buy a car in the U.S. and bring it back across the border. The short answer is yes, you can, but there’s more to it than simply driving your purchase up to the border crossing and declaring it as you would a bottle of perfume or a new digital camera.

Despite the fact that many vehicles sold both in Canada and the U.S. are almost identical, there’s a fairly involved process that goes along with bringing a car built for the States into this country.

But first, how much can you expect to save by importing a car from the U.S.?

Phillip St. Pierre of Volkswagen de l'Outaouais regularly imports hard-to-find cars from the U.S. for resale through his dealership. He walked me through how much one could expect to save by buying a used 2006 Porsche Cayman S from the U.S.

Looking on eBay, we found a low-mileage example with a buy-it-now price of $55,000, compared to about $71,000 for a similarly-equipped car for sale in Ontario on

Given a Canadian dollar worth about 96 cents U.S., that American Cayman is worth about $57,000 in our currency. To that, add 6.2 per cent duty (applied to all cars that don't qualify under NAFTA), which works out to about $3,500. Depending on where in the U.S. the car is located, it might cost $1,300 to have it shipped here, says St. Pierre. Unless you want to handle the paperwork yourself, you'll have to hire an importer who will get the car across the border; that'll cost about $500.

All cars eligible for import require a letter from an authorized Canadian dealer certifying that there are no outstanding recalls on the car in question. In his experience, St. Pierre says most Porsche dealers charge $1,500 for this letter; this will cost significantly less for more mainstream cars. Then you have to have your dealer install a daytime running light module (the only modification a U.S. Cayman requires to meet Canadian safety standards; other cars need stuff like Canadian-spec bumpers), which will run you about $1,200.

So far, we're up to about $65,000 (plus GST and any provincial sales taxes that apply), a savings of about $6,000 on the car itself. Add in travel to check out the car with your own eyes (which you may not feel is necessary), and the margin gets smaller. At that point, St. Pierre says, it's up to the buyer to decide if the few thousand in savings is worth more than the time they'll invest to bring a car across the border, compared to looking for a similarly-equipped Canadian car. Keep in mind too, that the price differential tends to be bigger for more expensive cars.

Automobile Protection Association President George Iny says that it's cash buyers who stand to save the most by shopping for a car in the U.S. "For Canadian lease and corporate finance customers (who represent about 85 per cent of new car buyers in this country) the benefit would be less, because they wouldn't get access to below-market factory finance and lease rates being offered to American buyers."

Iny says the APA has been surprised by the number of inquiries the organization has received on the price differential issue. When asked, he says, the majority of new car buyers would consider importing a car from the United States for a savings of as little as $3,000. And with that kind of savings being realistic for many vehicles at the moment, he expects many American dealers located near the border - as well as Canadian importers - will begin doing what they can to attract disgruntled Canadian shoppers.

If you have your heart set on buying an American market car and bringing it back here, read on for a rough guide of what you're in for.

According to the North American Automobile Trade Association, the first step is to determine that the vehicle you want to bring home is eligible for importation into Canada. The similarities between vehicles sold here and those for sale south of the border mean that most light-duty cars and trucks are eligible; this document, published every year by the Registrar of Imported Vehicles (RIV) will tell you whether the vehicle you want can be registered for use in Canada.

Next, you have to obtain a recall clearance letter that states whether a particular vehicle is subject to any recalls in Canada. If so, these will have to be addressed before the vehicle can be licensed.

As the importer, you (or a dealer or broker working on your behalf) must give U.S. customs at least 72 hours notice that the vehicle is leaving the United States permanently, and it must be presented to U.S. Customs when you take it across the border.

Once that's done, Canada Border Services Agency (CBSA) will want to see the vehicle title, registration and sales receipts, and you'll be required to fill out a Vehicle Import Form. CBSA will also collect a non-refundable fee - $206.70 everywhere except Quebec, where it's $222.21 - that goes to the RIV.

Keep your wallet open, because CBSA will then collect any taxes and duty that apply to the vehicle. You'll pay GST on the purchase price (converted into Canadian dollars), which includes the $100 air conditioning excise tax that applies to new vehicles in Canada.

According to the North American Free Trade Agreement (NAFTA), if the vehicle you want to import was manufactured in North America, you won't have to pay duty to bring it into Canada. Otherwise, as mentioned in the Cayman example above, you'll be charged 6.2 per cent of the value of the vehicle. There are also excise taxes on any imported vehicle weighing more than 2,007 kg (4,425 pounds).

Once you're in, the RIV will let you know what modifications have to be made to bring the vehicle in line with Canadian safety standards. These include metric speedometer and odometer markings, daytime running lights and French airbag labels; the full list can be found here.

Then the vehicle must be taken to a Canadian Tire location, where it will be inspected to make sure it meets Canada's safety rules. From the date you register the car with the RIV, you have 45 days to get it inspected.

Keep in mind, too, that many provincial transport ministries have their own hoops that importers must jump through. Most are minor, but the onus is on you (or the importer you've enlisted to take care of you) to make sure your car meets the requirements of your home province, as well as the federal rules.

You can do all of this yourself, or you can import a vehicle through a dealer that specializes in the process. Even if you pay someone to do the work for you, there are other issues to consider.

Some manufacturer warranties are not transferable from the U.S. to Canada; for example, BMW's are, but DaimlerChrysler's aren't. It varies from one manufacturer to another, and it's up to you to find out. Patrick St. Pierre says that even if a manufacturer will honour a warranty on a U.S. vehicle imported here, you may not benefit from "goodwill" warranty policies that might be applied if the car had stayed in the States.

And, if for whatever reason, the vehicle you're trying to import doesn't meet the requirements of CBSA and/or Transport Canada, you have to take it back to the U.S. or destroy it, and the CBSA gets to keep what you paid in duty and taxes. In short, it's up to you to make sure your car will be allowed into the country.

Canadian vs U.S. vehicle prices: are we paying too much? Back to Part One ; Part Two

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