2024-07-14
BUYING GUIDEWhen it comes to importing vehicles into the EU, most people immediately think of the USA. However, the Canadian auto market often goes unnoticed, even though it offers many attractive opportunities. In this article, we will take a closer look at the Canadian auto market and explain why it is worth considering Canada when looking for your next vehicle.
Advantages of the Canadian Auto Market
Favorable Exchange Rate
A major advantage of buying a vehicle in Canada is the favorable exchange rate. While the USD rate is about 1.08 EUR, the CAD rate is only about 1.48 EUR. This means that your Euro is worth more in Canada, which can lead to significant cost savings when purchasing a vehicle.
Differences Between the US and Canadian Auto Markets
Tax Regulations
A significant difference between the US and Canada lies in the tax regulations. For direct exports from the seller, no taxes are incurred, provided the dealer does not insist on receiving the tax payment. However, if a transaction is handled through an intermediary like us, we as buyers must prepay the tax. This tax must be advanced for about two to three months before it is refunded, depending on the timing of the refund.
Provincial Taxes
Another important point is the special taxes in certain provinces. Quebec, Manitoba, and British Columbia are examples of provinces with their own tax regulations. The Harmonized Sales Tax (HST) can be easily refunded, but the specific provincial taxes can only be avoided if the dealer delivers the vehicle independently. This depends on the place of performance. If the performance occurs outside these provinces, these provincial taxes do not apply. We handle the coordination with the dealers who either waive the provincial tax and charge it completely as HST or plan the delivery of the vehicle by the dealer to our warehouse. The costs for collection would incur anyway, and the dealer delivers the vehicle independently to avoid the provincial tax.
Documentation Requirements
Unlike the USA, an original title is not required in Canada. Instead, the registration as a copy is sufficient for export. This simplifies the process and reduces administrative effort.
Specifics of Canadian Vehicles
Metric System
An interesting aspect of Canadian vehicles is the metric system. The vehicles display kilometers instead of miles, which can be an additional advantage for European buyers.
Indicator Colors
Many Canadian vehicles have yellow indicators, which conform to European standards. However, this is no guarantee that fewer modifications are required, as the headlights either need an E-mark or a certificate proving their compliance.
Vehicle Condition and Rust Susceptibility
Due to the weather conditions and the use of salt, Canadian vehicles are more susceptible to rust. This is especially true for vehicles that are heavily used, like pickups often employed as workhorses. Generally, one should pay special attention to whether the salt has possibly affected the condition of the vehicle.
Challenges and Solutions in Importing Vehicles from Canada
Pre-Financing Taxes
One challenge in importing from Canada is the necessary pre-financing of taxes. These must be advanced for a period of about two to three months. However, there are ways to reclaim the taxes, reducing the financial burden.
Avoiding Provincial Taxes
To avoid provincial taxes, one can strategically choose the place of performance. If the performance occurs outside the special provinces, these taxes do not apply. We handle the coordination with the dealers who either waive the provincial tax and charge it completely as HST or plan the delivery of the vehicle by the dealer to our warehouse.
Practical Tips for Buying a Car in Canada
Choosing the Right Dealer
When buying a vehicle in Canada, it is important to choose the right dealer. Foreign buyers often have difficulty purchasing vehicles for export due to mistrust. However, Canadians are generally very friendly, so you can try to buy vehicles on your own, negotiate the purchase price, and handle the transaction. However, buying through us is usually more successful.
Negotiation Strategies
Negotiations are generally similar to those in the USA and can be very challenging. Since the entire market in North America is very transparent and many vehicles are sold over the internet, cheap vehicles are often already at the bottom line. Additionally, many dealers profit from financing when a vehicle is purchased. This means that when a vehicle is paid for in cash, the dealers miss out on the commission from the financing business. This is why price negotiations are generally very difficult and usually involve an additional dealer or doc fee.
Customer Experience and Review
Customer Experiences
Many of our customers have already discovered the Canadian market, and we notice that the market is increasingly coming into focus, especially since some vehicles are significantly cheaper than in the USA.
Expert Opinions
As industry experts, we see great potential for European buyers in the Canadian auto market. However, one should not assume that the exchange rate positively affects all vehicles. Similar to the USA, all markets must be carefully analyzed to see which brands and models are attractive in which market, and generalizations should be avoided. Nevertheless, the Canadian market is a very attractive alternative that still receives too little attention.
Conclusion
The Canadian auto market offers numerous advantages and unique aspects that make it a worthwhile option for importing vehicles into the EU. If you are looking for a new vehicle, you should definitely consider Canada. Take the opportunity and discover the possibilities that the Canadian market offers.
