You’ve identified that there is a market opportunity to purchase vehicles from Canada for export to China. Now what? Well, from our perspective, there are three key priorities to this business.
- Buying a Vehicle from a Dealer for Export
- Finding a Buyer Overseas for that Vehicle
- Arranging Payments, Short Term Financing, Shipments, Taxes, Required Paperwork, Insurance, Legal Requirements, etc. (Also known as “The rest of what we need to do”)
As Techlantic has been exporting vehicles from Canada since 1983, we are very familiar with all of these key aspects of our business. If you are interested in getting in to this business as well, you are in luck. We are now focusing on partnering with individuals or companies that are interested in having help with any of the above. This article will focus on the first step.
First you must identify a source. Your source could be a dealership, a private person, or, if you are registered, from dealer auctions. Most of the vehicles exported are used vehicles however some countries such as China only allow the import of new vehicles which will limit your options. Sourcing a vehicle that is in demand for export to China from a dealership can be challenging. Dealers are trained by the manufacturers on how to identify buyers who intend to export. Your first task to source a vehicle is to learn the latest screening methods these dealers use. They are constantly changing, but some of the common ones include your proximity to the dealership, your method of payment, and the number and types of questions you ask before making the purchase.
The dealer may sell you one vehicle for your personal use, but it is common to use agents to source more than one vehicle. An agent is a purchaser of a vehicle, who acts on your behalf. You need to sign an agency agreement with the purchaser prior to the agent purchasing the vehicle. The wording of the agency agreement can be critical to assure you become the owner of the vehicle and can claim back any sales tax paid after the vehicle has been exported. Please note however, that it also makes you liable for whatever the agent signs when he purchases the vehicle on your behalf. A sample agency agreement can be supplied to you when requested.
Non Export Agreements
Sometimes the new vehicle dealer requires the agent to sign a document not to export the vehicle or the agent agrees to pay a fine. The dealer might even have the right to place a lien on the vehicle for this purpose. This can prevent you from exporting the vehicle. It is important to understand all of your legal consequences so if you encounter a non export agreement you are not familiar with, we are always pleased to review it with you to ensure risks and possible consequences are thoroughly understood.
There are a number of other resources that can be very useful in the case you are not purchasing directly from the dealership. Here is a list of some resources that we commonly use.
- www.carfax.com for vehicle history reports (sample below)
- http://www.ppsa.ca/ppsacaV3/ppsa_search/ppsa_search1.jsp for nationwide lien checks
- http://app.cpic-cipc.ca/English/searchformvin.cfm and https://www.nicb.org/theft_and_fraud_awareness/vincheck for stolen vehicle checking
Exporting vehicles from Canada can be an exciting business. It is perfectly legal, however, you do need to make sure you are following the rules of the business so you don’t run in to trouble down the road. Techlantic is currently expanding the business of helping other exporters with “The rest of what we do” as mentioned above and if you are considering getting in to this market, we would be interested to meet with you and share our knowledge.