No i'm not selling my recently (U.S.) aquired 2006 330i !

But now that I am familiar with the importation process,
I'd like to explore the feasibility of exploring the U.S. market
once again for another nice undervalued example and selling it
here in Canada ... or keep it!

In the event that I sell it, can I do so with only U.S. title and Riv form
#1 in my name? ... or do I have to register/plate the car in Ontario
before I am able to transfer title (sell it) to someone else?

The last purchase was cool little adventure and i'd like to do it
again!

Thanks for any thoughts...

 

If you are an individual (not broker), you MUST register it in the name that it was imported in.

 

Yes, you can do this. First off, I'm assuming you don't have a dealer's license - if you do, everything is different. But for a private individual, your role would be that of broker. You would have to establish a bill of sale between the US seller and the CDN buyer, whomever that ends up being, because the MTO will require that to transfer title into his or her name.

Here's the scenario: you find the car in the US, being sold by a private individual, but you don't have a buyer lined up here yet. You explain to the seller that you may keep or sell the car, and that you'll enter into an purchase agreement with him/her that you'll sign in your name, but if you decide to sell the car you'll need him/her to enter into another purchase agreement with the final buyer (yet to be found). You explain to the seller that the import restrictions (i.e. RIV form 1) only gives you 45 days to register the car, so this will all be finished in 6 weeks - it's not like you're asking them to sign a new bill of sale in 3 or 4 years. The seller will probably get a bit suspicious, just because there are so many frauds going around (I still get scam emails about the boxster I sold over 6 months ago!). If you're able to convince the seller, then you're fine. You import the car in your name (i.e. you get the trip permit from the MTO, your name on the RIV form, pay the GST at the border, etc.) then drive home with the car (or have it shipped, whichever). Then you've got 45 days to decide what to do before RIV comes knocking at your door to either produce the inspection paperwork or send the car back to the states.

The big problem here is driving the car - if you're going to go this route, you'll have to get the MTO trip permit, which is only good for 10 days. It's meant for driving the car around for the safety, e-test and RIV inspection, and to a garage if any work is needed. They won't renew the trip permit, or issue a second one on the same VIN to the same person. So you're limited to 10 days of actual driving (calendar days, not business days). The only way around this is if you have access to a dealer plate, then you can drive all you want, and the car is insured under the dealer's fleet policy (just don't get in a fender bender, because the deductible is usually huge, like $5K).

One other issue that may crop up is the recall clearance letter. If you attempt to get one for someone else (i.e. acting as a broker), expect to be stonewalled. It has to be issued to you, in your name. Now that doesn't mean that once it passes RIV inspection it can't be transferred to someone else's name. Just don't tell them you're a broker, and don't use a corporation name for the import, only your name. Unless you've already found a local buyer, then use their name. But it has to be a private individual, otherwise you'll be doing what I did - getting the list of US dealerships and calling them all until you find someone willing to do the recall lookup, print it off, photocopy their business card onto the printout and fax it to you. You'd be amazed at how many service managers are unwilling to do this, even for $100. I figured they could make a cottage industry out of it, but very few are willing to do it. (I imported it commercially to save taxes - I work in used car financing, so know lots of dealers and was able to do it this way.)

So the short answer is yes, you can do this, but the long answer is it might not be worth it, because unless you can find a buyer within 45 days, you'd have to keep the car, or re-export it to the states (or destroy it, as per RIV regulations ). You may still be able to cash in on the so-called "Canadian premium" prices for Porsches north of the border, but I don't expect that false premium will last much longer, what with all the pressure Canadians are putting on retailers to match US prices.

Still, as you say, it's an adventure and kind of fun to do, so provided you're willing to keep the car, including plating it and paying the taxes on it, you really don't have anything to lose.

Hope this helps!

Chris

 

This is true, but to clarify, you have to register it in the name that's on the bill of sale (which is the name it's being imported under), not technically who did the actual importation process, because transport companies and border brokerage services do imports all the time for clients, which is perfectly legit.

That's why I said you'd have to get the seller to agree to do up a second bill of sale if you decide to sell.

 

Christien, thanks for the clarification! I did not know that

So tempted to buy a 997, the dollar is SO strong. Must resist the urge ..

 

Christien! What the hell guy?!! That is some serious knowledge
you just dropped.
Thank you very much for taking the time to share your experience.

This place is great.

 

No worries I'm used to dealing with MTO through work, so I've got most of that stuff down. As for importing, I've done 3 imports now, one private, 2 commercial, including once doing all my own commercial brokerage at the border. NEVER do that. The standard wait at Lewiston in the commercial building is 90 minutes and it could be up to 2 or 3 hours. That's just the wait. That doesn't include processing the paperwork, any other customs BS (got searched once, they thought a cheap 944 was a possible drug smuggling cover - kind of clever, if you think about it!). If you do it commercially, absolutely pay a brokerage service $200 or $300 to do that for you, even if that just involves driving it 100 metres across the border, if you still want to pick it up yourself.

 

Actually, that information is not correct. No one can legally sell or broker a car for profit in Ontario without an automotive sales cert and a dealer's license. Get caught, and your talking tax evasion and curbsiding charges. I researched this topic very deeply 2 years ago and there is no legal way around it...I'll post more details later if anyone cares to know the scoop.

 

Hey Mark, there are ways around this. When I sold the boxster, I did it as an authorized representative of the dealership. I wasn't the one to sign off on the deal (because I don't have a license) but it would be akin to the mechanic or receptionist showing someone the car and discuss pricing, then having the salesman sign the paperwork.

As for brokering, I've never come across regulations against that in regards to OMVIC or the UCDA, though it's possible I missed it. Acting as a broker, you're just basically putting buyer and seller together and doing some research on the car, for a fee. The actual transaction is between buyer and seller, so I can't see how that would contradict the MVDA. There was an article about brokers in the draft regulations for the 2002 update, but as far as I can find it wasn't actually incorporated into the act.

I suppose if you want to be safe, a phone call to OMVIC would be the answer. If you're looking to do this as a business, then certainly that would be the way to go. If it's a one time deal and you are indeed considering keeping the car, I wouldn't be too concerned. (of course, I'm not a lawyer, and I don't want to be responsible for landing your *** in jail!!)

 

No time to respond now Christien, but I will later. I called OMVIC, my accountant, my dealer friends etc. and ended up getting my auto sales cert, registering a company and applying for my dealer's licensce - although I got involved in another business before approval. You must be licensed to broker an auto deal in Ontario...there's no legal way around it. And yes, I tried the "capital gains" route and got a warning on that too A private individual cannot sell a car for profit in Ontario without paying taxes and you can only sell your "personal" car. They check the dates of aquisition and sale in your tax audit!

 

I believe Zedder is correct
the logic behind his points seem correct

 

Hmm, ok maybe I'm wrong about that. So Barrington take my advice with that knowledge!

Don't necessarily take OMVIC's word as gospel, though. Case in point: I own a used car financing company. When we provide financing for a vehicle lease, we work through partner dealerships, because we can't sell cars, because we're not a dealership. In the few cases where we have to repossess cars and sell them ourselves (the dealerships usually do this for us, but if they go under we have to) we need to sell retail to recoup our losses (wholesale auctions bring $0.60 on the dollar). I checked the MVDA and the PPSA (under which we register liens and dispose of the vehicles) and the two acts are contradictory - the MVDA says under no circumstances can we sell these vehicles to private individuals without a dealer's license. The PPSA says we may dispose of the vehicles any way we choose, including sales to private individuals. Furthermore, the PPSA explicitly states that in a conflict, it supercedes any other act except the Consumer Protection Act.

I spoke to several people at OMVIC about this, including their legal "specialist" and they all agreed that if we tried to sell cars under the PPSA they'd come down on us hard. The legal specialist agreed that we'd win in court, but the legal fees wouldn't make it worth it, which is very true. In one way, OMVIC are necessary to protect consumers in a difficult industry. In another way, they're a big dumb bully.

Anyway, in regards to brokering, I checked the MVDA as posted on the elaws site, and there was no reference to brokers at all. However, if I were to do it myself, I'd read it a bit more closely. I just scanned it by using the find function in my browser, and the word "broker" does not appear in there anywhere.

edit: just thought of something - Zedder, you made reference to a private individual selling a car for profit. As I understand it, that's not what a broker does. A broker finds a buyer for a seller and vice-versa, perhaps relays info about the car, maybe takes care of arranging a PPI, shipping, etc, maybe even does up the paperwork, but collects a fee for service, rather than actually owning the car and selling it at a higher price for profit. It's only different than a buddy passing on that he saw this car you're looking for for sale at this website or whatever, and charging for that service. Or at least if that's not what a broker does, that's what Barrington is talking about doing - never having title in his name.

 

"brokers"... http://www.omvic.on.ca/news/archives...se_2003-07.htm

 

Well, OMVIC administers the MVDA, but often is somewhat ignorant of its finer points (as I pointed out above). From the MVDA:

3. (1) No person shall,

(a) carry on business as a motor vehicle dealer unless the person is registered under this Act; or

(b) act as a salesperson of or on behalf of a motor vehicle dealer unless the person is registered as a salesperson of such dealer and such dealer is registered as a motor vehicle dealer under this Act. R.S.O. 1990, c. M.42, s. 3 (1).

“motor vehicle dealer” means a person who carries on the business of buying or selling motor vehicles, whether for the person’s own account or the account of any other person, or who holds himself, herself or itself out as carrying on the business of buying or selling motor vehicles; (“commerçant de véhicules automobiles”)

OMVIC's deputy registrar can suggest anything she wants about brokers registering, but if it's not prescribed in the Act, they're not required to.

Again, let me stress I'm not a lawyer, I'm only reading the act as it appears to me. I believe the above statutes contain language that explicity excludes brokers, namely "buying" and "selling", which would be defined as the exchange of money for goods, and in the case of a vehicle, registering title would be the defining point of "buying", which Barrington would not be doing.

In any event, if OMVIC caught wind of it, they would definitely follow up, and like my case, it just simply wouldn't be worth the legal battle, even if you were in the clear, unless you were prepared to go the whole way and recoup your costs, maybe even countersue. Even if you did come out on top, that would take all the fun out of it, I'd think.

 

Christien, an ammendment to the motor vehicle dealer's act is currenty being tabled which includes a reference to allowing brokers to conduct business without having a "lot" - ie a home-based business model. Until this passes, brokers must be registered and have a "lot" from which to do business.

I have bought and sold muscle cars for years as a hobby and never had a problem until the prices got into the stratosphere and there was "real" money to be made. In an effort to fully discolse the profits that I earned in one particularly hot year (when I lost my job and sold off my collection), I quickly learned that if you do not hold a car for at least a year, the tax man does not consider it as "personal" use eligible for capital gains. It becomes "income" and when it involves the sale of cars, it falls under the MVDA...hence my quick education on the industry My cars were all US cars and therefore there was lots of paperwork to provide an audit trail for anyone who was interested. And the tax man is very interested in our hobby right now...they are even watching ebay sales in Canada and going after their share of the profits. And just for the record, you can't do this legally by keeping the cars in the US...I tried that too You still have to pay taxes in your "home" state of Ontario.

Also, there is a snitch line for reporting curbsiders via the Used Vehicle Dealer's Association. Even if they don't report you to the authorities, they will report you to the tax man