18 April 2016

Buying, selling or trading classics across borders

More than three-fourths of Canada’s population lives within 150 kilometers of the U.S. border. Despite warm relations between the countries, the 6,400-kilometer border with the continental U.S. presents formidable barriers, both real and psychological, to the movement of collector cars.

Adam Horodnyk is vice president of TFX International, a leading auto transporter based in Etobicoke, Ontario. He’s also a car guy who very likely knows as much about the movement of collector cars back and forth across the border as anyone on the planet.

“Because of the exchange rate, 85 percent of the cars sold are moving from Canada to the U.S.,” Horodnyk said, “and about 15 percent are going the other way, mainly because the selection is better south of the border.”

“Most Canadian sellers are leaving money on the table by not having a plan to target U.S. buyers,” he said. “By just listing your car on Kijiji in Ontario, or in Toronto or Vancouver on Craigslist, you’re invisible to most U.S. buyers.”

Horodnyk advises a different approach: “Come up with your price in U.S. dollars. Then get your car in front of an American audience either on eBay or a Craigslist site – Buffalo or Detroit for Ontario, or Seattle for the Vancouver area.”

He also suggests researching customs issues so you can help buyers and put them at ease. “Most Americans don’t have a clue about customs and duty, so it’s always good to have a customs broker’s phone number that you can give a buyer,” Horodnyk said. “They usually charge anywhere from $300 to $800 U.S. to clear a car. The U.S. charges 2.5 percent duty to import a foreign car.”

While it is possible to sell an American a late model North American-spec car (and Horodnyk says that selling Americans late-model exotics is a brisk business) be wary of advertising to American buyers if that car was never sold new in the U.S. and it’s less than 25 years old. Canada has a 15-year rule for importing cars that don’t conform to Canadian emissions and safety regulations; in the U.S., it’s 25 years. In most cases, an American buyer will not be able to register a nonconforming car under 25 years old and may even have to re-export the car or face having it confiscated and crushed.

If you’re considering importing a car from the U.S. – your favorite car might be waiting for you in rust-free California – Horodnyk again advises employing a customs broker. “The U.S. side is by far the most difficult. Get an American customs broker,” he says. “They’ll handle getting an ITN, or Internal Transaction Number, for you. The U.S. authorities are generally on the lookout for stolen cars or anything that involves homeland security, and they can be really tough.”

Once you get into Canada, it’s fairly straightforward. You pay 6.1 percent duty if it’s less than 25 years old and you’ll pay Provincial Sales Tax at the applicable rate – and that’s it.

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