Trade Talk Blog I
mporting a car from Canada into the U.S. has become increasingly popular in recent years. This is in part due to the currency exchange rate, which means that some cars in Canada can be cheaper than their American counterparts. Although it’s easy to just drive a car from Canada to the U.S., importing a car involves more than just crossing the border. For one, you’ll have to ensure that the car meets American safety and emissions standards before bringing it into the country. You’ll also need to pay duties and other fees on your imported car.
Most cars, whether new or old, meet the requirements for import eligibility into the United States. However, there are exceptions, such as early 2000’s smart cars that are deemed ineligible for import into the U.S. due to safety concerns. In this article, we’ll walk you through the steps and cost of importing a car from Canada to the U.S. and answer some of the most frequently asked questions.
What are the steps to import a car from Canada to the U.S.?
Step 1: Determine your car’s import eligibility
To import a car from Canada, it must qualify for importation under U.S. regulations (both federal and state). For a vehicle to legally enter the U.S., it must meet the safety standards set by the National Highway Traffic Safety Administration (NHTSA), in addition to the emission standards of the Environmental Protection Agency (EPA), which determines whether an imported car meets an acceptable level of emissions control for use on American roads (known as “conformity” requirements).
You will need to look for conformity stickers on your vehicle, which are clearly shown on the door jam of a passenger vehicle. The stickers can be found under the hood on vehicles like Jeeps where the doors are removable. Many of these stickers have Canadian Maple Leaf or Vehicle Emission Control Information. If your vehicle is older than 21 years, you are exempt from requiring any stickers, and the vehicle is import-eligible regardless of where it was manufactured.
In some cases, nonconforming vehicles may be eligible for import into the United States. A list of eligible nonconforming vehicles can be found in this NHTSA eligibility document. If the eligibility of the car you wish to import is based on an eligibility decision, you must include the appropriate eligibility number on the Form HS-7 accompanying entry.
The easiest way to determine your eligibility is to book a meeting with one of our customs concierges for a complimentary assessment.
Step 2: Identify whether it’s a personal or commercial import
Importing a car for personal use differs from importing it for commercial use. When importing a car for commercial purposes, you must provide a Tax ID or Employer Identification Number (EIN).
If the car is for personal use, you can complete the paperwork yourself, but there may be delays at the border due to additional requirements or missed steps. The value a customs broker provides is ensuring that your car crosses the border seamlessly.
Step 3: Hire a customs broker
Even if you are driving your car across the border yourself, you might want to hire a customs broker to help with the import process. A customs broker is a CBP-certified individual or company that facilitates importing cars and other goods from foreign countries into the United States. They can ensure a seamless border crossing by notifying customs in advance of the car’s arrival and preparing the appropriate documentation.
We highly recommend working with a customs broker because they know all the import rules and regulations, have experience dealing with importing vehicles and can help you navigate any potential pitfalls.
Step 4: Transport your car from Canada to the U.S.
You can bring your car into the U.S. from Canada either through:
- Self-Drive – This is the most common method of importing a motor vehicle from Canada, especially when the port of entry is a short drive from the Canadian province where you purchased your car.
- Truck Shipment – This auto-shipping method is preferred for long distances when the port of entry is not close to the province where the car is purchased and shipped from.
If you’re auto-shipping your car via truck, you will need to choose a port of entry that handles vehicle imports and is closest to your destination state. This interactive port of entry map provides information about U.S. ports and their requirements. You can also speak to a customs broker to help you choose the best entry port.
Step 5: Prepare your customs paperwork
Now it’s time to prepare your import documentation and submit them to U.S. Customs and Border Protection (CBP). The documents required to import a car from Canada to the United States are:
- A U.S. Customs Proforma Invoice
- Registration (may be required by local DMV)
- Bill of Lading (BoL) (generated by your carrier and provided to your customs broker)
- A Bill of Sale showing VIN
- An EPA form 3520-1
- A DOT form HS-7
- A Letter of Recall and Conformity from the manufacturer (if applicable)
You can submit these documents to CBP yourself or have your customs broker file them for you.
Step 6: Pay the required duty and fees
Imported cars in the United States are subject to customs duty. The amount of duty you will need to pay depends on the value of your car. All foreign cars are dutiable at a rate of 2.5%. However, if the car is manufactured in a fellow USMCA country (Canada, United States, or Mexico), it may be exempt from this duty.
Step 7: Get ready for an inspection
Once your car arrives at American borders, CBP may choose to inspect it.
Inspections are integral to the import process, verifying that your vehicle complies with all U.S. safety and emission standards. An inspection will check that your car has all the necessary parts installed properly and that any equipment required for safety or emissions is in good working order. To ensure that your vehicle passes the inspection:
- Take care of all the paperwork ahead of time;
- Clear your vehicle of any personal belongings; and
- Ensure the vehicle is clean of dirt and debris, especially the tires and undercarriage.
Do not use your car as a storage container to ship goods. If you do so, the entire contents of your car will need to be declared to customs, and you may have your car subject to seizure or incur additional costs.
Step 8: Register your car in the U.S.
You can drive your car in the U.S. for up to one year with Canadian licence plates and a Canadian driver’s licence. But if you plan on keeping the car in the U.S. for more than a year, you will need to register your car.
First, you will need to establish that your imported car conforms to the USA’s import rules and regulations. You can do so by contacting the vehicle’s manufacturer and asking for a certificate of compliance with U.S. standards. Most manufacturers are already aware of the regulations and will issue a certificate of conformity when requested. You will need to have the Vehicle Identification Number (VIN) on hand when speaking to the manufacturer since vehicles and their attributes are tracked with this number.
Next, once U.S. Customs verifies that your Canadian vehicle conforms with EPA and DOT requirements, an informal entry (Customs Form 368) must be completed and submitted to your state’s Department of Motor Vehicles (DMV) for registration. The process of acquiring plates and permits may be different from state to state, but in general, you will need to:
- Apply for a permanent vehicle registration
- Provide proof of insurance for your vehicle
- Pay any applicable taxes and fees associated with registering a new vehicle (these vary by state)
- Obtain license plates, which may be purchased from your local DMV location
- Obtain any necessary permits, such as a license plate sticker or emissions test certificate
How much does importing a car from Canada into the U.S. cost?
There are several costs to consider when importing a car from Canada into the U.S. These include:
- Import Duties: Importing a car from Canada to the United States means paying duties and fees. The amount of duty depends on the type of vehicle, its value, and its age. The import duty for Canadian-imported cars is 2.5%
- Customs Bond: A customs entry bond is required for every imported vehicle. You can obtain a Single-Entry Bond (for one-time imports) or a Continuous Bond (for multiple imports within 12 months).
- DOT Bond (for nonconforming vehicles): Cars without a DOT certification label must be imported as nonconforming. In this case, you must register with a DOT-Registered Importer (RI) and post a DOT bond (the value of the bond should be 1.5 times the car’s dutiable value).
- Gas-Guzzler Tax: Some imported cars are subject to the Gas-Guzzler Tax. The amount of the tax is based on a combined fuel-economy rating assigned by the EPA. The higher the fuel economy, the lower the tax, and no tax is imposed on cars with a combined fuel-economy rating of at least 22.5 miles per gallon.
- Insurance: Once you import your car from Canada, you will want to purchase an insurance policy. That is because to drive in most states legally, you need to meet the minimum vehicle insurance requirements set by the state.
- Brokerage fees: If you work with a customs broker, you will need to pay a small fee for their services. Most people who import cars from Canada prefer to work with a customs broker to guide them and help streamline the importation process.
- Shipping fees: Canadian cars are usually driven across the border or shipped via truck. Shipping fees depend on the size of your car and the carrier you choose. If you have an auto broker or shipping company handling the shipping process for you, request an estimate on shipping costs before you commit to working with them. Otherwise, a customs broker can help you find the best shipping partner to import your car via truck from Canada.
- Licensing and registration: When your car arrives in the U.S., you will need to pay fees for its licensing and registration if you plan on keeping it in the U.S. for more than a year. The fees are determined based on where you will be registering the vehicle.
Frequently Asked Questions
Can I legally import a car from Canada?
Yes, you can import a car legally from Canada to the U.S., provided that it conforms to the rules and regulations of the U.S. Department of Transportation (DOT) and the Environmental Protection Agency (EPA) emissions standards and regulations.
You must understand the import regulations and requirements when importing a car from Canada. DOT and EPA have strict regulations for imported vehicles. These rules ensure that all vehicles meet high safety and environmental standards and protect consumers from fraud.
In many cases, the car you want to import from Canada may be nonconforming. The National Highway Traffic Safety Administration (NHTSA) defines a nonconforming vehicle as “a vehicle that does not meet safety standards set by the Federal Motor Vehicle Safety Standards (FMVSS) (as per the Motor Vehicle Safety Act), or that has been altered from its original design.” It also refers to a vehicle not built to EPA standards.
Because some cars may not be manufactured according to U.S. standards, you can import your nonconforming vehicle into the United States either by certification or by exemption:
- By Certification – A nonconforming car can be imported if it is modified, tested, and certified by a Registered Importer (RI) or an Independent Commercial Importer (ICI).
- By Exemption – You can import a nonconforming vehicle temporarily – with EPA’s pre-approval – if it is imported for the following purposes:
- Repair or alteration
The car should be imported under a U.S. Customs and Border Protection (CBP) bond if it qualifies for an EPA exemption.
Can a U.S. citizen buy a car from Canada?
Yes, as a U.S. citizen, you can buy and import a car from Canada for personal use if it complies with DOT and EPA regulations. In fact, you can drive a car into the United States without having to pay any import duties or taxes if you plan to keep it for less than one year in the U.S. If you want to keep the car for more than a year, you will have to go through the formal import process.
Do Canadian cars meet U.S. standards?
Canadian and U.S. auto standards are similar but not identical. While this means that many vehicles will be considered compliant with both sets of laws, some Canadian cars may require adjustments to meet U.S. regulations. If you want to import a car into the United States from Canada, you need to ensure that it complies with all relevant regulations before making the trip southward.
According to the EPA, a Canadian vehicle is identical to a United States-certified version if one of the following is true:
- An emission label is affixed to the Canadian vehicle stating that it is certified to United States EPA federal emission standards; or
- The vehicle manufacturer’s U.S. representative has provided a letter of compliance that states the vehicle complies with all United States EPA regulations. EPA usually only accepts compliance letters from a manufacturer’s U.S. or Canadian representative.
If your car bears a label certifying compliance with all applicable Canadian motor vehicle safety standards (CMVSS) but not with the FMVSS, it can still be imported as a conforming motor vehicle under Box 2B on the HS-7 Declaration form that is presented to U.S. Customs and Border Protection (CBP) at the time of entry if the following requirements are met:
- The vehicle is being imported for personal use and not for commercial use;
- The vehicle is not a salvage vehicle, a repaired salvage vehicle, or a reconstructed vehicle; and
- The importer obtains a letter from the vehicle’s original manufacturer, on the manufacturer’s letterhead, identifying the vehicle by vehicle identification number (VIN) and stating that the vehicle conforms to all applicable FMVSS except for the labeling requirements.
Can I import a 25-year-old car from Canada?
A car older than 25 years can be imported into the U.S. without having to conform to DOT or EPA pollution and safety requirements under the 25-year rule. Moreover, If the vehicle is at least 21 years old, there are no EPA compliance requirements that you need to follow.
On the other hand, a car less than 25 years old can be imported without restrictions only if it was originally manufactured to comply with all applicable Federal motor vehicle safety standards (FMVSS). The car must have a label certifying its compliance, and its original manufacturer must permanently affix it.
How GHY Can Help
At GHY, we help hundreds of importers bring their vehicles into the United States every year without any hassle. We’ll take all the work off your shoulders, from checking your vehicle’s admissibility to clearing customs. Book a meeting with one of our Trade Experts and we’ll take it from there.