Exporting new cars..is it illegal?

[Marsh]

Hi guys,

I did a quick search but couldn't find this topic covered on beyond before. Is it illegal to export new cars bought in canada to other countries?

Anyone have experience with this?

Thanks
Marsh

[rage2]

It depends on the manufacturer. The high end brands, you have to sign a non export agreement when buying the car. If you breach it, you'll get sued.

The dealers get fined when cars they've sold gets exported. It's the dealers that will come after you for that money.

[jdmXSI]

Currently if you purchase the new X5, there is a non-export agreement you have to sign and can be fined up to $20k iirc if you export within the first 12 months. Not sure about other manufacturers though...

[rage2]

Manufacturers don't give a fuck. They just fine dealers, and dealers can't do anything about it other than pay the fine, or lose their dealership.

The non export agreements are all at the dealer to customer level.

I'll bet OP realizes how much $$$ can be made moving cars overseas haha. If it was that easy, everyone would be doing it. :)

Price gaps have been around for decades. Hell, even dealers used to do this before they got fined huge.

[jdmXSI]

Im sure you are right to some extent unless there is an early release of a vehicle in a particular market (like the X5) and they want to deter people from shipping the over to another market that does not have the vehicle yet. Otherwise, im sure there wouldnt be a non-export agreement which needed to be signed prior to delivery.

I hear what you are saying, it seems like it is enforced from the factory and gives the retailer a way to collect from the consumer if the break the agreement.

Definitely some $$$ to be made but you have to have the initial capital to get started, haha.

[shakalaka]

^:werd:

I was shocked to read on MB Forums that C63's in Australia go for upwards of $150K for the standard models! If it was that easy to export, there's like 100K to be made on c63's alone.

[theken]

so say I buy a brand new car and sign a non export agreement, sell the car to someone and they export it, who do they fine and how would they know not to export it?

[roopi]

Originally posted by theken
so say I buy a brand new car and sign a non export agreement, sell the car to someone and they export it, who do they fine and how would they know not to export it?

I think you're onto something here. :thumbsup:

[rage2]

Try buying a second car after that haha. You'll be blacklisted.

With that being said, the older non export agreements also had a first right of refusal for selling the vehicle as well, you have to offer it to the dealer as well.

[soloracer]

Originally posted by shakalaka
^:werd:

I was shocked to read on MB Forums that C63's in Australia go for upwards of $150K for the standard models! If it was that easy to export, there's like 100K to be made on c63's alone.

Ever wonder why cars are more expensive in Australia? They have HUGE taxes on vehicles brought into the country.

[Marsh]

Originally posted by rage2
Manufacturers don't give a fuck. They just fine dealers, and dealers can't do anything about it other than pay the fine, or lose their dealership.

The non export agreements are all at the dealer to customer level.

I'll bet OP realizes how much $$$ can be made moving cars overseas haha. If it was that easy, everyone would be doing it. :)

Price gaps have been around for decades. Hell, even dealers used to do this before they got fined huge.

You read my mind lol! Ok thanks for the info...is there a standard agreement that the dealer would give you? Like a government form, or is it just drawn up by the dealer themself? Ie. BMW Gallery and Mercedes Benz would have different agreements...

Also is there a certain length of time/age the car has to be before it can be exported?

FYI, just read an article about some guys in california who were taking advantage of the arbitrage opportunities because of the price of high end cars in china....but they got fined like $5mill.

[snowcat]

I wonder if those agreements deter new car buyers. It's my car, I'll do as I please. I wouldn't sign that, even if I wasn't selling it over seas.

[DEATH2000]

Originally posted by snowcat
I wonder if those agreements deter new car buyers. It's my car, I'll do as I please. I wouldn't sign that, even if I wasn't selling it over seas.

You dont need a non export agreement, you need a "I will not tint front windshield" agreement....

[bart]

so you cant go drive your car in another country, not even drive it into the US? i think you can, there is really no way to check that

ship it anywhere you want, just dont be visiting any dealers abroad for the first year and you will be fine

[Env-Consultant]

I'm interested in this. I have a side electrical supplies company with my brother and am fairly compentent with shipping/distribution. I understand this is a bit of a different monster, but if we do our DD and are certain we'll be okay, I'll join a Beyond member or two on an export mission - shelling out 10, 000-20,000 each and doubling is slightly more appealing than my high risk investments at RBC... and my Sofame Technolgies stock :banghead:

Edit: Wanted to add that I could care less if I'm blacklisted from buying high end cars - there are way too many ways to get around that for me to worry about it. Even if there is some ridiculous clause about allowing the dealer to buy it back, I'd draft up an agreement for a ridiculous price and say that's what my buddy offered me - even if me and him had to trade money and have a paper trail, I'm not going to be deterred by some anti-competition, archaic BS from a dealship - you want to pull that shit, move to Russia.

[Marsh]

Originally posted by Env-Consultant
I'm interested in this. I have a side electrical supplies company with my brother and am fairly compentent with shipping/distribution. I understand this is a bit of a different monster, but if we do our DD and are certain we'll be okay, I'll join a Beyond member or two on an export mission - shelling out 10, 000-20,000 each and doubling is slightly more appealing than my high risk investments at RBC... and my Sofame Technolgies stock :banghead:

Edit: Wanted to add that I could care less if I'm blacklisted from buying high end cars - there are way too many ways to get around that for me to worry about it. Even if there is some ridiculous clause about allowing the dealer to buy it back, I'd draft up an agreement for a ridiculous price and say that's what my buddy offered me - even if me and him had to trade money and have a paper trail, I'm not going to be deterred by some anti-competition, archaic BS from a dealship - you want to pull that shit, move to Russia.

Yeah Im interested in doing it too- Just wondering if its illegal or not. I dont care too much about a fine from the dealer, just add it into cost of goods. But if its illegal...well thats something else.

[rage2]

In the US it's illegal, don't think it is illegal here. The bigger problem is finding who to sell it to in China, as it's a grey market vehicle with no warranty. You would also get less money for the car because of this. As for the non export agreement, you can sell it to whomever you want to export it, but it doesn't help. The agreement has to do with knowledge of export, so you would be liable because you knew full well that the vehicle was being exported. Add on the import taxes into China, you'll be lucky to break even.

Like I said if it's that easy, everyone would be doing it. The manufacturers have ensured that it's very difficult to profit from doing it. The big guys that are doing it in volume are figuring ways to import into China while bypassing import fees. That part would be illegal.

[Marsh]

Hmm interesting. Thanks for all the info Rage.

[3drian]

I believe it depends on the country, I happen to know someone who exports SUVs from Miami to Venezuela and happens to make tons of money doing it. Of course there is a catch, I believe this is not 100% legal or there are lots of restrictions, you just have to know the right people and be ready to bribe the authorities at customs. But when you spend 40-50 K and make triple that as soon as the vehicle lands in Venezuela bribing people is not a huge deal.


I have thought about taking my 08 Lancer down there, here I could probably 10-11 k if I’m lucky, down there I could probably sell it for double that. However during the past few months this has become less affordable for people looking to get $ instead of the national currency due to the skyrocketing exchange rate.

[rage2]

Exporting new cars out of the US is illegal, believe it or not, due to customs regulations. I dunno who paid off who to get that in place, but it's not right.

[cam_wmh]

Originally posted by rage2
Exporting new cars out of the US is illegal, believe it or not, due to customs regulations. I dunno who paid off who to get that in place, but it's not right.

What qualifies as new? <1 yr?

[rage2]

Must be.

http://www.forbes.com/sites/joannmuller/2013/10/10/millions-of-dollars-seized-along-with-bmws-porsches-and-mercedes-in-government-crackdown-on-vehicle-exports/

These guys were registering the cars right away, then exporting, which wasn't enough to classify them as used.

[3drian]

Interesting, as I said I am not familiar with the laws; However, its fairly common to see newer vehicles in Venezuela imported from the states. Not 100% sure how new this vehicles are, but Ive seen then first hand and they are not more than 5 years old.

[BBB]

It's not illegal for the Customer who purchases the X5 and decides to export it. It's not even illegal for the dealer to sell it. It's a problem because BMW China is complaining that these exported X5's from North America are undercutting there business. Because X5's in China sell for about $150,000 USD. It's a pretty lucrative business venture. BMW Corporate will fine the dealers if they're caught doing this.

They slip through the cracks all the time. I know this because I work in a BMW Dealership.

[DEATH2000]

Originally posted by 3drian
Interesting, as I said I am not familiar with the laws; However, its fairly common to see newer vehicles in Venezuela imported from the states. Not 100% sure how new this vehicles are, but Ive seen then first hand and they are not more than 5 years old.
Probably ship em to Puerto Rico first then export em from thier. Being a US territory its probably cosher to ship them thier?

[Maxt]

Interesting. .. When I was shopping for a cummins 7 years ago, I looked at some new trucks stateside. I emailed this one dealership and they said they could not sell to me, however I got an unsolicited email from some guy who offered to buy the truck for me and then resell to me for a small fee. Even if the fee was 2 or 3 k there was still a significant savings to be had buying it. I found my 06 that same week so I didn't bite on that offer.
Going through the same scenario again minivan shopping now. Chrysler T&C here 51k, 30k in the U.S.. I was going to get my sister to buy it and bring it up.

[spikerS]

ok, so I just had a random question pop into my head, and I will give a scenario for it.

Lets say a person comes to calgary for a visit in their personal vehicle. Something bad happens, and the engine seizes. They can't tow it back to Colorado, towing fees would be huge! But lets say for arguments sake that I buy the vehicle from them because I know I have a brand new engine I can put in the car, and they fly back home.

So what kind of fees and such are involved in this? The car is already across the border, theoretically, would all that be required is an OOP?

if so, this seems like a pretty good way to get around these export laws.

[rage2]

This is exactly how people bypass the RIV program. It's just a federal offense if you get busted. I posted this in another thread somewhere.

[ColoDano]

Originally posted by spikerS
ok, so I just had a random question pop into my head, and I will give a scenario for it.

Lets say a person comes to calgary for a visit in their personal vehicle. Something bad happens, and the engine seizes. They can't tow it back to Colorado, towing fees would be huge! But lets say for arguments sake that I buy the vehicle from them because I know I have a brand new engine I can put in the car, and they fly back home.

So what kind of fees and such are involved in this? The car is already across the border, theoretically, would all that be required is an OOP?

if so, this seems like a pretty good way to get around these export laws.

It is possible to "import" the vehicle at the customs office here in town, and the vehicle would still have to go through the whole process of importation/ inspection etc at that time.

I was informed of this one of the last times crossing border in one of my cars that is still registered in Colorado as I still maintain legal residence there, and work on a work permit here. The lady at the border didn't care what I did, just told me about that option, and that I could do a "temporary" import to get the car plated up here.

[Env-Consultant]

Got a pm...



wrote on 07-24-2014 02:00 PM:
Your planning to ship cars to China? Do you have buyers lined up?


A major part of exporting the cars involves them being considered "used"; guys in the USA were (Forbes link from Rage) buying them through straw buyers, registering them, and then exporting them. Their argument was that because the car was registered, it is considered used. I would agree with them - but government officials have the words Ultimate Purchaser included in their regulations...

http://www.cbp.gov/trade/basic-import-export/export-docs/motor-vehicle

Used definition from the Customs website: "Used" refers to any self-propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser.

The Ultimate Purchaser is defined as “first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale.”

Long story short, the feds shut them down and they turned a potential civil matter (between BMW and the guys) into a criminal matter. They even chucked mail fraud in there for good measure.

Wih respect to why they got charged, in full detail:

http://exportautonews.wordpress.com/2013/09/26/dont-let-the-new-hampshire-export-case-throw-a-wrench-in-your-business/

In Canada.... I'm not sure - have to do more digging. I know I wouldn't try it from the USA right now.

[cam_wmh]

Originally posted by spikerS
ok, so I just had a random question pop into my head, and I will give a scenario for it.

Lets say a person comes to calgary for a visit in their personal vehicle. Something bad happens, and the engine seizes. They can't tow it back to Colorado, towing fees would be huge! But lets say for arguments sake that I buy the vehicle from them because I know I have a brand new engine I can put in the car, and they fly back home.

So what kind of fees and such are involved in this? The car is already across the border, theoretically, would all that be required is an OOP?

if so, this seems like a pretty good way to get around these export laws.

Interesting. How would it be registered though?

The new vehicle form would have been used at Colorado Registry.

Can't register it then?
(no past history, no new vehicle form)