Can I save myself repair costs if I purchase a new vehicle?

Actually, you may be able to save on repair costs if you purchase new – BUT – most dealers in the U.S. have been instructed by manufacturers to NOT SELL TO CANADIANS. Why? Manufacturers do not want their profitable Canadian sales market impacted by people going south of the border.

There are ways around this though, but we don’t recommend that you attempt this, because it is a form of fraud, which can seriously impact you if you are caught. Some buyers will use a friend’s or relative’s address in the U.S. to purchase the vehicle and tell the dealer that they will be leaving the car in the U.S. for when they come to visit. Or they might even put the bill of sale in that person’s name for a few months and then buy it from their friend afterwards.

Firstly, most states will charge you a sales tax to register the vehicle, which you will have to do (most dealers are required to do this for you by the state to collect the tax) before it can be taken out of state. That can cost up to 8% of the value of the vehicle.

Secondly, if you are registering in the U.S., you will have to buy U.S. insurance because your Canadian insurer will not insure the vehicle with a U.S. address. Now you will pay extra for U.S. coverage, because it is almost double most Canadian insurance costs.

Thirdly, if you buy the vehicle in another person’s name, your insurance is actually void, even if you insure it in their name. The legal requirement is that the owner must have a financial interest in the vehicle in order to insure it. If they did not invest money into the vehicle, they do not have any financial or “insurable” interest and the coverage is void. Either they or you may be driving the vehicle, have an accident and the U.S. insurer may decline to cover the loss.

Next, the person “buying” the vehicle for you could have their name flagged by the manufacturer for purchasing a vehicle that was shipped out of country. From there, the next time they want to buy a new vehicle, they may not be able to, because they have been flagged as a problem to the manufacturer and dealer.

Lastly, the manufacturer may still void the warranty if they determine that you have tried to “bypass” their system through some form of deceit.

And having said that, even if you buy a new or used vehicle with a warranty on it, you may ultimately not be able to find an authorized repair shop that will “find the time” to work on your vehicle for you. Dealerships are extremely busy and majority of their income is earned through their service departments, not through vehicle sales. In fact, the average profit to a dealership on a new vehicle sale is LESS THAN $2,000.00. So if you decide to not purchase the vehicle from them and decided to save yourself some money by traveling south, their first loyalty will always be to their customers that purchased a vehicle from them.

So even if your U.S. vehicle has warranty, the dealership may not be able to find the time to work on it for you and you may be forced to take it to a “generalist” type of repair shop and pay for repairs that should be covered by warranty. Oh! And yes, you can complain to the manufacturer about this, but they likely won’t listen to you, especially if you illicitly purchased a new vehicle. If your vehicle was used and with warranty, you will have to appreciate that you are ONE client complaining of a lack of service, where their dealer is handling repairs to hundreds and thousands of consumers that purchased their vehicle and supported the local dealership.

Ultimately, the manufacturer will side with their dealer and you will be paying for repairs from your pocket from the $1,500.00 - $3,000.00 saving that you found by going through all that work and effort and buying your vehicle from the U.S.