Want To Expand Your Car Dealership Business Over The Canadian Border? Things To Know

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 Expanding a car dealership business in the U.S. is one thing. Expanding it into Canada is quite another. There are so many laws on global trade, exports, and imports alone that it it is going to be tricky business just getting started on this sort of expansion. However, if you are bent and intent on getting a lot of cars over the Canadian border and sold at your dealership on the other side, here is what you need to know. 

You Need U.S. Canada Auto Transport Services

These are auto shipping companies that have the licenses and the permits to take cars into and out of Canada. They have international trade agreements as shippers to move between countries with reduced taxation on gas for their transport trucks, and international tax refunds on gasoline for transport purposes. That means that you already benefit from the reduced cost to ship when you hire a transport company that is a member of IFTA (International Fuel Tax Agreement), because that shipping/transport company is receiving rebates on any fuel tax in Canada that is higher than the fuel tax they pay on U.S. soil. 

Your Auto Shipment Has to Meet Canadian Smog Regulations

Canada has some strict smog and pollution regulations and with good reason. A lot of the scenic wilderness that stretches across Canada is protected by their federal government. As such, cars entering the country for the purpose of sale to the Canadian public have to meet those smog and pollution restrictions. Before you ship any of the inventory you have, you will have to run every vehicle through a rigorous smog/pollutant check with the DMV/DOT in your state. Inform the inspectors that the cars have to meet Canadian standards. They will let you know which cars from your inventory pass, and which do not. (Most brand-new cars usually pass, but if you send used cars north, they may not pass the smog inspection, and therefore are off the transport list.)

You Will Have to Pay Both Canadian and U.S. Taxes on Sales of Vehicles

When you have a dealership in Canada, but you are a U.S. resident and business owner, you will have to pay taxes in both countries when a car sells in Canada. That should not be surprising, considering that you would collect the taxes imposed on the sale of a vehicle by the Canadian government, and then pay taxes on the profits earned here in the U.S. The currency exchange rate may also create some issues for you, but if you are still willing to go through with this business venture, you will be going into it better educated than before.

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