A lot of people wonder whether importing a used boat from the United States is a smart move or not. After all, the Internet is rife with boats for sale south of the border – it’s been that way for years. And now that the Canadian dollar is on par with its American counterpart, it’s a lot easier to compare prices and spot a deal. While the asking prices for used boats are quite similar on either side of the border, there’s a lot more selection in the U.S. As a result, prices tend to drop as supply increases, and thus you’re more apt to find great deals by cross-border shopping. This begs the question: What constitutes a good deal when buying a used boat?
The answer to this question is relative, but most would consider it to be 10-25% less than what you would pay at a dealership in your area.
Hypothetical example: Let’s examine the total cost of a boat bought in the U.S. We’ll look at its selling price and what constitutes a “good deal” in the import market.
Suppose you want to buy a 30-foot express cruiser with two V8 engines, twin-propeller drives, plus various options including air conditioning, GPS and an electric anchor windlass. For the sake of comparison, we’ll say that it’s a 2005 model. In 2012, this type of boat would sell on the Canadian market for about $75,000. If you live in Quebec or Ontario, buying it from a dealership would also include a full season warranty, licence or registration papers and taxes (about 15%), for a total of $86,250.
Now, let’s determine the full cost of buying a similar boat in the United States. Naturally, this has to include import costs. And we’ll assume that the American and Canadian dollars are at parity (1:1 ratio).
-Asking price from a yacht broker $59,000 US
-Price negotiated by buyer or representative $55,000 US
+Inspection, mechanical assessment and sea trial $700 US
+Bank or foreign exchange dealer fees (for money exchange or transfer) $600 CAD
+Shipping and maintenance (approx. 6 %) from north-eastern U.S.A. $3,300 CAD
+Service charges and consulting fees from buying broker (5.5%) $3,000 CAD
+Customs charges/duty $0
(thanks to NAFTA, there are no customs charges/duty on boats built in the U.S., Canada or Mexico)
Total before tax: $62,600 CAD
+Taxes (PST + GST) payable when you cross the border (15% on $55,000) $9,390 CAD
Total cost: $71,990
Thus, in this hypothetical scenario, your total savings would be $14,260 or 16.5%, compared to what you’d pay locally. Note that this doesn’t take into account the cleaning, minor repairs or tuning that you should expect when buying a boat from the U.S. (these services are included when you buy a used boat from a Canadian dealership). Plus, we haven’t considered the condition of the boat or that special feeling you get when you fall in love with a boat. And finally, you should know that imported boats don’t come with any guarantees, while reputable Canadian dealerships always give you at least 30 days (and often a full season) on the boat, engines, drives and main components.
Price is certainly one of the top reasons for importing a boat from the U.S. Next time, we’ll consider other criteria that can ultimately affect your “deal” or “no deal” decision. We’ll also look at all the steps you need to consider to minimize the risks associated with importing boats.