Many Canadians have driven across the border into the United States at least once in their lifetime. Whether it’s a family vacation or an outlet mall shopping trip, almost 400,000 people cross the Canada-USA border daily. Driving across the border is usually a hassle-free experience, even for those traveling across for a month-long visit. However, if you are thinking about exporting your vehicle to the U.S., it’s a different story. Permanently exporting your car to the U.S. requires substantial paperwork and may be prohibited in some cases. Let’s take a look at the ins and outs of exporting your vehicle to the U.S.
Canadian Car Insurance in the U.S.
Unless you are a seasoned snowbird, you may not be aware that Canada and the United States have treaties for travelers who bring their cars across the border for short periods. Canadians traveling to the U.S. can keep their car south of the border for up to one year at a time. Anything exceeding this time period will incur additional fees or paperwork. Americans coming north also enjoy the same privilege. However, they can keep their car in Canada for up to 36 months if they have a valid student or work visa. If you are considering taking an extended holiday with your vehicle across the border, it’s helpful to understand the ins and outs of your car insurance. Most Canadian car insurance policies are valid anywhere in Canada and the continental United States. However, it’s best to be sure.
With most insurance companies, having the car out of province for longer than six consecutive months will void the terms of your policy.
Ontario auto insurance doesn’t account for people living abroad but maintaining their Canadian citizenship/residency. Having an Ontario auto insurance policy means that you still have coverage while traveling anywhere in Canada and the U.S. However, this is only for less than six months. Therefore, you will need to prove that you’re still a resident of Ontario and qualify for Ontario auto insurance. To do this, the car should be brought back periodically – ideally once every six months.
Permanent moves are trickier for car owners
Making a permanent move and exporting your vehicle to the U.S. is trickier, however. Why? Because your Canadian car insurance won’t cover you for a long-term stay south of the border. If you plan to give up your Canadian residence, you’ll have to give up your car insurance along with it. Also, if you plan to keep your car in the United States for longer than half a year, you risk an insurance claim being denied. A car insurance policy is underwritten with the expectation that you’ll be spending most of your time close to home – extended visits of up to six months are likely fine. To maintain the coverage you need when moving to the US, you’ll need to get car insurance in the state where you settle – and that’s where Canadians are running into trouble.
Intact insurance assesses claims on an individual basis for stays longer than six months.
Strict Rules Must Be Met to Be Insured in the U.S.
Getting a car insurance policy in the US is easy if your vehicle was originally sold there. However, insuring a car originally sold in Canada requires your vehicle to be permanently exported to the US and registered in the state it will primarily be used. The process of registering your vehicle can be quite burdensome:
Exported Vehicles to the U.S. Must Meet US Safety and Emissions Standards
According to US Customs and Border Protection (CBP), a vehicle must meet standards set out by The United States Department of Transportation (DoT) and Environmental Protection Agency (EPA). If your vehicle meets the American safety and emissions standards, it will have a label on the engine compartment that says so. Alternatively, you can get a letter of compliance from the manufacturer. This will attest that the vehicle meets necessary standards to permanently move to the US.
According to CTV News, Toyota Canada and Kia are among the manufacturers who have stopped issuing compliance letters to Canadians who want to move their cars to the US. Viraf Baliwalla, with the Automall Network, says some car companies are becoming concerned their vehicles are being flipped for profit. As a result, they’re no longer providing compliance letters. “They don’t want a vehicle that is supposed to be destined for Canada that’s on a long waiting list and then someone buys it and takes it to the United States and flips it down there,” says Baliwalla.
If your vehicle doesn’t meet US standards, or you can’t get the appropriate proof that it does, your final recourse is to hire the services of an independent commercial importer. An importer may be able to perform necessary modifications to your car to meet the requirements. However, their services are costly and it’s likely more cost-effective to buy a new car in the US.
The US Department of Agriculture (USDA)
The USDA requires that any vehicle imported to the United States be free of foreign soil. This is to prevent the movement of harmful pests and invasive species. US Customs and Border Protection will inspect your car and can refuse entry if it’s not sufficiently clean.
Duty Fees Apply When Exporting Your Vehicle to the U.S.
The sales taxes generated from vehicle sales add up to big revenue for governments who want their piece of the pie. When you buy a car in Canada and move it to the United States, the US Internal Revenue Service (IRS) wants to make up for the tax if the vehicle was sold in the US. A permanent move to the United States for personal use is dutiable at 2.5% of its value, whether new or used.
Car insurance is mandatory in most U.S. states
There are perks if you are considering exporting your vehicle to the U.S. The minimum insurance requirements are much lower in most parts of the United States than in Canada. However, car insurance is mandatory everywhere in the United States, except New Hampshire, Virginia, and South Carolina. Without the minimum coverage, you may face fines, a license suspension, or even jail time. Even with the minimum coverage, you’re unlikely to have the protection you’ll need to pay for your expenses after an at-fault accident in a particularly litigious country.
Exporting your vehicle to the U.S.: The bottom line
Exporting your vehicle to the U.S. is becoming more difficult, and your Canadian car insurance may not cover you for such a move. Ask your isure representative for details on your coverage before traveling across the border for an extended period. If you are considering moving to the U.S. and buying a car in your destination state, we can help advise you. Contact isure today or request a quote!
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