If you’re looking for a car at a dealership in another province, it’s dealer’s choice whether they sell it to you or not.Vasyl Dolmatov/iStockPhoto / Getty Images
I live in Ontario and the new car I want isn’t available here right now. I’m wondering if it’s possible to buy one from a car dealer in Quebec or British Columbia. Are there any rules against that? If I did, would I have to pay provincial sales tax in both provinces – there and here? – Ken, Mississauga
If you’re looking for a car at a dealership in another province, it’s dealer’s choice whether they sell it to you or not.
“There are no regulatory requirements saying they can’t,” says Viraf Baliwalla, a car broker in Toronto. “Most dealers want to sell vehicles and they don’t care where you live – but, having said that, some dealers don’t want to go through the extra effort.”
Andy Tan, general manager of OpenRoad VW in Burnaby, B.C., says out-of-province buyers are typically looking for used cars. That’s because buyers could, at least until this year, purchase most new car models in their home province.
Traditionally, Tan’s dealership would sell one to two used cars a month to out-of-province buyers, he says. But that number has increased to three or four a month as the computer chip shortage has slowed new car production and boosted demand for used cars, Tan says.
What about new cars? With some new models in short supply, will a dealer sell to an out-of-province buyer?
“It depends on the dealership – we’re all franchisees and run our operations differently,” Tan says. “[Some dealers] may want to reserve this limited inventory to clients who will continue their service requirements with them, while [other dealers] may just care for the sale.”
In other words, you may have to call around.
“I had a number of clients in B.C. looking for a RAV4 Prime and I could get them here in Ontario but they couldn’t find them out there,” Baliwalla says.
Some vehicles sell out quickly in some provinces and not others. Plus, some new models don’t get sent to every province. For instance, when automakers launch new electric vehicles (EVs), they’re often available in B.C. and Quebec before other provinces.
That’s true for Volkswagen’s new ID. 4 electric SUV. The first available models went to Quebec and B.C. They’ll hit Ontario next and Volkswagen hopes to sell them nationally next year.
If you buy a new EV from an out-of-province dealership, check to make sure your dealership at home can service it, Tan says.
Volkswagen dealerships, as one example, need special equipment and training to service and repair new ID. 4s because “EVs are a little tricky with high voltage safety,” Tan says.
“Ontario is on the shortlist to receive these licences [to service ID. 4s],” Tan says. “[But] that vehicle purchased in Quebec may not have a dealer in Ontario who can service it if something were to go wrong in the near future.”
Taxed twice?
Figuring out taxes can be taxing.
Wherever you buy, you’ll have to pay 5-per-cent GST. But if you’re buying from a dealer in another province – say if you live in Ontario and buy in Quebec – do you have to pay that province’s sales tax plus your own province’s sales tax?
While rules vary by province, if you’re having a car shipped between provinces, you typically only pay tax for the destination province, Baliwalla says. While some provinces make you pay the provincial tax when you buy at a dealership, Quebec allows you to wait until you register the vehicle.
“If you buy at a dealership, you will have to pay the GST on the product but you won’t have to pay the Quebec sales tax (QST),” says Sophie Roy, spokeswoman for the Société de l’assurance automobile du Québec (SAAQ). “When you register your car in Ontario, then you will have to pay the provincial tax there.”
On a new car, that means you would skip the 9.9975-per-cent QST and just pay Ontario’s 7-per-cent tax. That would apply to new and used cars as long as you’re buying from a dealership.
If you’re buying from an individual in a private sale, you’d have to pay Quebec sales tax on the spot, Roy says. Then pay Ontario sales tax when you register back home. For used cars, it’s 13 per cent.
As long as you don’t register the car in the province where you bought it, you can get the out-of-province tax back. “You can apply to the province where you bought it to try to get a refund,” Baliwalla says. “It may take a long time.”
In B.C., buyers usually pay provincial sales tax (PST) at the dealership. But if you’re an out-of-province buyer, you can apply for an exemption as long as you buy at a dealership and not through a private sale.
If you don’t get the exemption, you’ll have to pay PST – it ranges from 7 per cent on vehicles priced under $55,000, to 20 per cent for vehicles costing $150,000 or more – and then get refunded when you get home.
To make it even simpler, a dealership can collect the home-province sales tax for you and add it to the purchase price if you provide proof of residence, Tan says.
Taxes won’t be your only expense. Transport fees range from roughly $600 to $750 to get to the next province to $1,500 to $2,000, or more, to get across the country.
“Throughout COVID-19, shipping got a lot more expensive,” Baliwalla says. “I shipped a used vehicle from Ontario to Nunavut last summer and it was probably in the $2,500 range.”
If you’re considering flying out to pick up a car and driving back with it, do the math to see if shipping makes more sense, Baliwalla suggests.
“By the time you get on an airplane and pay for accommodation, it adds up. Even if you can drive both ways, it will cost you a certain amount of time and money.”
Have a driving question? Send it to globedrive@globeandmail.com and put ‘Driving Concerns’ in your subject line. Emails without the correct subject line may not be answered. Canada’s a big place, so let us know where you are so we can find the answer for your city and province.