With the dollar differential in Canada’s favour, many people want to take advantage of the strong Canadian loonie. Here are some tips and cautions on dealing with the financial opportunities.
Money Management
One technique of making money on the exchange rate, is to open up a U.S. dollar account at your local bank or credit union branch that you use at home, and buy U.S dollars with Canadian funds from your Canadian dollar account at the same branch. As the rates are still fluctuating, you can buy at different rates, so that you can average out an attractive rate. You can also obtain a bank card for your U.S. dollar account, as well as a credit card in U.S. funds relating to that account, both of which can be used in the U.S. You can obtain U.S. cheques for your local U.S account. Most banks and credit unions do not charge any extra money for U.S. cheque clearing, especially if you are over 55. Verify this in advance. You can monitor exchange rates, and buy more U.S. dollars from your Canadian account online or through telephone banking 24/7.
If you are already in the U.S, you can easily set up the above arrangement with your home branch. You could also do the same with your Snowbird residence bank branch. You want to check first, on which account you are going to get the best exchange rate, and the cheque processing charges or rates. Always ask for the best rates and waiver of service charges.
Buying a Car in the U.S.
With the dollar differential, and lower U.S. manufactured car prices, you might be tempted to buy a car. However, there are many steps to go through in the process, and you need to do your research thoroughly. Here are some tips:
Check out the website for the Registrar of Imported Vehicle at www.riv.ca, or phone them at 1-888-848-8240. The RIV program regulates only vehicles originally manufactured for the U.S. market. Vehicles originally manufactured to standards other than the U.S. or Canada are inadmissible to Canada under the current laws.
The RIV website is very information-rich and user-friendly. All the procedures are set out for importing a car into Canada, with relevant links to other information. For example, which U.S. made cars are eligible, inspection centres in Canada, provincial licencing information, and modifications that might be required to ensure compliance with Canadian regulations for safety or emission control. The site also sets out the various sequential steps in point form, such as what to do before you import, what to do at the border, and what to do after the vehicle enters Canada.
Check with the Canada Border Services Agency to get their policies on assessing and collecting duties and taxes. Their website is: www.cbsa.gc.ca or phone them at 1-800-461-9999 (in Canada), or (506) 636-5064 (outside Canada).
You will have to pay GST at entry, and PST to your provincial government.
If you are buying a new car or relatively new car covered by a manufacturers warranty, check with the Canadian head office for that manufacturer, to make sure that your warranty will be valid in Canada. You want to have that confirmed in writing before you buy of course. Here are the Canadian contact numbers for consumer information for the major U.S. auto manufacturers.
General Motors – 1-800-263-3777
Chrysler – 1-800-465-2001
Ford – 1-800-565-3673
Mazda – 1-800-263-4680
Don’t buy extended warranty protection coverage in the U.S. for a new car that you are importing into Canada. It is generally not valid in Canada. However, you can buy the same extended warranty coverage in Canada.
When buying a car, remember the old adage – “act in haste; repent at leisure”.
