Has anyone traded in their RV for a less expensive RV in the U.S. and then imported to Canada?
We have made a deal, with a dealer, to trade in our 5th wheel for a Class A PLUS a cheque made out to us in USD. The cheque is to cover our lien on the 5th, which the mortgage holder has already released in advance so as not to 'complicate' things at the dealer (he says he trusts us to give him the cheque on our return!)
We know we have to pay taxes on the purchase of the Class A at the border, plus other fees.
But...what about the cheque? The difference is on the bill of sale from the dealer.
Anyone done this type of transaction before?
We are scheduled to make the exchange this coming Saturday.
I have never done a RV import, but I am familiar with the banking side.
I would find it strange if the cheque for the lien would be payable to you, it would normally be payable to the lien holder, the bank or finance company.
The cheque is in US dollars, so depending on what rate they used, (there is no such thing as an 'official' rate) there may need to be an adjustment made, depending on what the BUYING rate for US is on the day the lien holder deposits it.
A Cheque in US dollars and drawn on a US bank can be negotiated by any Canadian bank, but they MAY put a longer than usual hold on the funds as their banking system is much slower than ours. However, as you are passing the cheque to someone else , it shouldn't matter to you.
1. You say a "dealer" but are you sure the cheque is legit? With the number of scams related to phoney cheques for purchases, I'd be asking for a bank draft, money order or wire transfer. Would not take a cheque, no way. The cheque might deposit fine at your bank, but can come back weeks later as not payable and you're the one out of pocket.
2. There are some vehicles that will not be approved for import, or may have difficulty passing the safety inspection required to import a vehicle to Canada. Review the info at the Canadian Registrar of Imported Vehicles. A list of admissible and inadmissible Class A and Class C motorhomes is on Transport Canada's site. Several guys I work with had numerous issues with the inspections of their trucks, one an F-250 and the other an F-350, and had to invest lots of $$ for mechanical repairs/upgrades to have their vehicles pass the inspection for import into Canada.
Orion....I know it does sound strange but we have known this person for a few years and have had other dealings with him (he is a bona fide small mortgage company) and he suggested removing the lien to make it easier for the transaction (we have trusted him in the past as well). Even though the money will be turned over, I am concerned it will be held on him, so I have taken sue t.'s advice.......
sue t.....i have sent an email to the dealer asking him to give us the balance in either a money order or bank draft. Thanks for the suggestion!
I am still wondering about the tax implications on the cash part of the transaction, if any, re crossing the border. I would imagine I have to pay tax on the purchase of the Class A. The way I see it, I have already paid tax on the cash part of the deal when I first purchased the 5th..and since i am turning over the money to the lien holder anyway.....the cash part of the deal should not be an issue with the border.
Does anyone know if my thinking on this is correct?
I bought my TC in The States in 2004. Once I had made that decision, I knew the only way to go was via my bank. They set up a line of credit that I could access via a number of routes.
Yes, you need credit on file in your credit card, Pay Pal or other major financial institution to pay your taxes. GST if you are in a province without HST. I you you have to have to register it for license plates, you are likely to be paying provincial taxes at that stage. You will pay GST when you return to Canada and the Canadian Border Services Agency will accept credit cards.
If you have been in the US for 7 full days or more, you will have $750.00 GST free.
Inspection should be set up ahead of time with the Registrar of Imported Vehicles.. Canadian Tire is the official 'inspector'.
If this is scheduled for this weekend, I think you're going to find yourself on the telephone tomorrow.
Little Kopit...thanks for the reply. I have already registered and paid the RIV. I know GST is payable at the border. However, I was wondering what the GST would be based on since I am trading the dealer more than he is selling me.
Anyone done that?
GST is presently 5% of the price of your rig. It might be full value and it might be what you pay. I think I'd want a tax expert. Try a friendly local auto dealer or an accountant.
If you had managed to stay down there even 24 hours you get a bit free. $50.00 for the first 24 hours I think. More for 48...... on up to 7 full days. Then it's $750.00 you don't have to pay duty on. & that is the maximum for 6 months or a year, but I'm not sure which of those two.
So, if you price. is $20,000.00, your GST would be $1,000.00.
Do you have a clear title for the unit you are purchasing...in your possession?
You mention "lien". You should have an actual piece of paper which is your
title.
Also if it is a "motor" vehicle, you have to have the title in the hands of the US border 72 hours before you cross. I assume you're aware of this because of your reference to RIV.
Orion....I know it does sound strange but we have known this person for a few years and have had other dealings with him (he is a bona fide small mortgage company) and he suggested removing the lien to make it easier for the transaction (we have trusted him in the past as well). Even though the money will be turned over, I am concerned it will be held on him, so I have taken sue t.'s advice.......
sue t.....i have sent an email to the dealer asking him to give us the balance in either a money order or bank draft. Thanks for the suggestion!
I am still wondering about the tax implications on the cash part of the transaction, if any, re crossing the border. I would imagine I have to pay tax on the purchase of the Class A. The way I see it, I have already paid tax on the cash part of the deal when I first purchased the 5th..and since i am turning over the money to the lien holder anyway.....the cash part of the deal should not be an issue with the border.
Does anyone know if my thinking on this is correct?
Couple of things.
1) A money order or a bank draft can have a stop payment put on them.
2) If you are carrying a cheque, money order or cash greater than $10,000, then there will be more paperwork at the border.
The wire transfer is the way to go. Once the funds are at your bank, they cannot be removed by the sender. You should speak with your bank about how to do this. Make sure the funds are deposited before you sign anything over to the dealer.
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