As Canadian Snowbirds, we all love having our cars with us at our Arizona, California, Texas, North Carolina, South Carolina, Georgia, or Florida residences. With two dogs and luggage, driving is the simplest way to head south. Since we usually stay for five to six months, we often discuss the idea of ‘leaving one of our cars in the US as opposed to bringing it back. So, what’s the problem?
It appears that most snowbird advisors and coffee shop confidants have limited knowledge of US federal laws regarding the Canadian importation of a car; state laws concerning car registration, licensing, lien transfers and state insurance laws; and few understand the contractual differences in Canadian car insurance in comparison to it’s US equivalent. It may not be what you want to hear, but if you make a mistake, you could have your car seized, or find yourself personally liable for all of the costs associated with a car accident.
When you drive your car over the border, you essentially engage in the importing of your Canadian car to the US. Since it’s intended for ‘personal use,’ you are granted an exemption from filling out complex US forms, making declarations, and paying duties and taxes. As a visitor to the US, you are typically allowed to stay for up to 180 days. Afterwards, you and your car are expected to return home. This expectation aligns with your Canadian car insurance policy (which can vary per insurer). Your car can not be out of the country for more then six months. If so, there is no coverage.
Six months or less – Canadian Car insurance?
In general, if you are in the US (not Mexico) for less then six months, your Canadian car insurance policy protects you. If you stay longer then six months your car policy becomes null and void. There are a multitude of reasons, but suffice it to say, if you violate the terms of your Canadian car insurance policy and are involved in a US car accident, your Canadian insurer will deny you coverage. This means you can become personally, legally, and financially responsible for all of the $ damages caused in a car accident. Let me be even more specific – in a serious accident you could potentially lose your house, assets, and savings on either side of the border, all because of the mistaken belief that ‘No one will find out.’ (Interestingly this is also true for US citizens. Another blog for another day)
Can a Canadian Vehicle be insured in the US?
You cannot obtain an individualized state car insurance policy for a Canadian car. Your car must be legally registered in the state you reside in, and it can only be registered if it has been legally imported and consequently licensed in the said state.
Importing a Canadian Car in the US: Five key Points
For those few adventurous Canadian snowbirds who are contemplating the idea of importing their car, here are some significant considerations:
- Hire a USA customs broker. Numerous tasks must be completed to ensure your car meets all US certification standards and requirements.
- Don’t forget about the substantial fees, duties, and taxes that are part of the process.
- Cars over 25 years of age can be imported as antiques or classics (worth looking into).
- Once your Canadian car is officially a US car, you need to register it in your state. Each state has different registration requirements, with some requiring it to be done in as little as five days. You must provide copies of your importing documentation, USA certifications, proof of ownership, and state car insurance.
- If the car is financed, the Canadian lending company must approve the change of location. However, unless you own the vehicle outright, the chance of a Canadian lending institution agreeing to transfer the Canadian car to the USA, or converting it to a US vehicle, is practically zero. If you ever stop making the monthly car payments, it is almost impossible for the lender to repossess the car or enforce its contractual rights.
Canadian Car Insurance vs. US Coverage: Crucial Differences
When importing a Canadian car to the US, it undergoes a reclassification as a US vehicle. Consequently, you become ineligible for Canadian car insurance.
Your Canadian car insurance policy is as valuable as gold when it comes to protecting you from various mishaps. While the Sunshine States are magnificent, many US car drivers have limited or no car insurance liability coverage. Canadian coverages in comparison have much higher policy limits and significant statutory accident benefit protection.
US policies in most instances are inferior and more expensive as compared to your Canadian policy. You can find more information in the blog ‘Snowbirds Buying a US Car.’ [Link: https://snowbirdaccidents.com/i-bought-a-us-vehicle/]
Possible Consequences of keeping your Canadian car for an Extended period of time in the US – Canadians have no special privilege or right to keep their car in the United States for more than one year. If the Canadian vehicle stays in the US longer than the required time, the owner runs afoul of the US/Canadian car treaty. The ‘US car police’ are at liberty to seize your vehicle, sell it, hold it for payment of financial penalties, auction it, or even send it to be destroyed.