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Mercedes-Benz Sprinter (Mercedes-Benz)
Mercedes-Benz Sprinter (Mercedes-Benz)

Ask Joanne

Any advantage to buying a car in Europe? Add to ...

My wife and I are interested in taking an extended driving holiday in Europe. Our thoughts are to buy a small camper van, perhaps a EuroVan or similar, drive it in Europe for six months and then ship it back to Canada. Are there any tax advantages to keeping it for a specific length of time and, is this a reasonable thing to do on a cost basis? If not, we could just buy a used one and sell it when we leave after six months. – David in Vancouver

An extended holiday in Europe is an appealing prospect, especially at the dawn of another Canadian winter. However, is purchasing a vehicle over there and exporting it back to Canada a reasonable – or even viable – proposition?

“If you just go to Europe and buy a vehicle and expect to be bringing it back, you may get a shock when it arrives in a container to a port in Canada, and the Canadian border folks say, ‘Sorry, your vehicle does not conform to our standards’ and send it back to Europe. Then you’ll be in a real quandary. You want to know ahead of time, ideally before you leave, what will meet the North American standards, and that may take some doing,” says one Canadian auto broker.

Vehicles for sale in North America are manufactured to meet North American safety and emissions standards. Vehicles sold in Europe are manufactured to different specifications. According to Transport Canada, these vehicles do not meet Canadian standards, and cannot be imported. However, vehicles that are more than 15 years of age (excluding buses) are not regulated.

According to the Canada Border Services Agency (CBSA), all imports are subject to applicable duties and taxes at the time of importation. So, is there a tax advantage in keeping the vehicle in Europe for a specific period?

“The simple answer is whether you’re in Europe for one day after you purchase a vehicle, or for 6 months, it’s not going to make a difference in terms of duties and taxes,” says a CBSA spokesperson.

When you purchase a new vehicle and drive it for six months, as we all know, the value depreciates. Does it follow, then, that duties and taxes are reduced accordingly? “No. Duties and taxes are calculated on the purchase price of the goods, so at the border you have to show the receipt from the time of purchase,” says CBSA.

Returning Canadian residents who’ve been abroad longer than a year and a half are exempt from duties and taxes on personal effects valued up to $10,000. I’m guessing that tripling the length of your intended stay just to receive this exemption probably doesn’t make sense.

Some manufacturers offer foreign purchase programs, whereby a Canadian-specification vehicle can be picked up at the factory in Europe. These are vehicles that have been built specifically for the Canadian market. The vehicle must be new, and it must be returned to Canada within a year of purchase. The manufacturers typically arrange transport for the vehicle and assist with the customs and duties process.

Not every manufacturer offers a foreign buying program; you’ll have to check with them individually. After contacting Volkswagen Canada, I can tell you that they do not. If your heart is set on buying a VW camper van in Europe and bringing it back to Canada, you’ll have to purchase one that’s at least 15 years old. Mercedes-Benz, which offers a foreign buying program, doesn’t make a specific camper van – but its Sprinter van can be outfitted (aftermarket) with various camping packages.

Mercedes-Benz Sprinter

“We do this on a fairly regular basis. The car has to be ordered in Canada through a Mercedes-Benz dealer. The idea is you purchase a vehicle in Canada and take delivery at factory and drive it around Europe. In conjunction with this, we offer a factory tour so you can see where your car was made,” says a Mercedes-Benz Canada spokesperson.

“Some customers really enjoy the experience of picking up their Mercedes in Germany, and driving the autobahn to really experience their vehicle’s performance, because obviously in Canada we have limits in terms of speed. It’s been a popular program in that respect.”

According to Mercedes-Benz, its European delivery prices are 10 per cent lower than the Canadian MSRP. It would like its customers to understand, however, that after duty and freight, purchasing a (new) car abroad is not a cheaper alternative.

If you buy a vehicle in Europe, you’ll certainly save the expense of renting for the duration of your vacation. If it’s a model that’s either very expensive or difficult to pick up at home, it may be worth shipping the vehicle back – as long as it meets Canadian regulations. Whatever you decide, enjoy the autobahn, but be careful how much cash you burn fuelling up around Europe.

Send your automotive questions to Joanne Will at globedrive@globeandmail.com

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