How To Buy a Brand New Car For Under $10,000

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How To Buy a Brand New Car For Under $10,000

The Chevrolet Spark is already an affordable subcompact, but is it possible to get it for under $10,000? It’s certainly possible when you look to our northern neighbors.

If you’re cash-strapped, you may be looking at ways to save some money on a new vehicle. Maybe you’ve considered cross-border shopping? Due to the favorable exchange rate between Canada and the U.S., some American citizens travel up north to buy consumer goods on the cheap. But you’ll notice that Canadian items usually carry a higher MSRP than their U.S. equivalents to make up for the exchange rate.

One car seems to have it backwards, and that’s the bare-bones Chevrolet Spark. Already a pretty affordable car in the U.S., the Canadian version is priced significantly lower despite having the same equipment. In the U.S., a base Spark LS costs $13,535 after destination. In Canada, the same Spark LS costs $11,595 including taxes and freight (Canada’s version of destination fees). Not only does the Canadian Spark have a lower base price, but that figure is in Canadian dollars. Converted into to U.S. dollars, the price rings in at around $8,780 using the current exchange rate.

So, in theory, you can get the Spark for a huge discount.

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But things aren’t always that easy. If you wanted to cash in on this bargain you would have to deal with a tough and potentially confusing car import process. You can see the whole gauntlet of instructions at the U.S. customs and border protection website, but we’ve got some advice from importers about how to still save some money while importing a car.

Duties

Like all items being imported to the U.S., there’s a chance you have to pay duties on it. Because the Spark is made in Korea, it doesn’t fall under the North American Free Trade Agreement, and can’t be imported duty-free.

“If it isn’t made in North America, then there will be a 2.5 percent rate of duty and a 0.3464 percent of the value for the MPF (Merchandise Processing Fee) tax,” explains Bob Hobson, president of Service Plus International, an importer that services customers looking to bring items like cars across the borders.

Standards

Afterwards, he asks “does the vehicle meet EPA and DOT standards and does the vehicle comply with the U.S. FMVSS (Federal Motor Vehicle Safety Standards)?” In order for a car to be registered in the U.S., it has to be compliant with the EPA’s fuel-emission standards, and DOT safety standards. While US and Canadian models of the Chevrolet Spark are mechanically identical and compliant each country’s standards, the Canadian model will not have the FMVSS sticker on it. “If the vehicle does not have the FMVSS sticker on it, then a letter of compliance from the manufacturer must be obtained,” says Hobson. That means if you are buying a car from Canada, you’ll need to contact GM to get the letter of compliance that proves the car’s compliant with both the EPA and DOT standards. This shouldn’t cost extra, but may lengthen the overall importing process.

“If all safety standards are met and if that vehicle is being imported by an individual (to save on clearance fees), they can drive the vehicle across themselves and U.S. Customs will assist them with the clearance,” Hobson says. Of course, if you’re doing this, you’ll need to acquire a temporary Canadian tag and extend your insurance coverage to cover the vehicle between when you bought it to when you will import it.

Hobson adds that you’ll need to have the compliance letter, bill of sale and transfer of title, if applicable, to import the vehicle. You’ll also need a pair of completed documents (EPA form 3520-1 and DOT form HS-7) that you can print online.

Final Cost

2016 Chevrolet Spark

So how much does all this cost? The math looks like this: The base Spark LS costs $8,780 after converting to U.S. dollars. Then there’s the 2.5 percent duty and MPF fee, which comes to $219.5 and $30.41. That comes to $9,029.91. If a buyer was importing a car themselves, that would be the total cost, but Hobson also adds a quick quote if they were using his company’s services: a $75 entry clearance fee, a $90.85 single entry bond fees and a $65 handling and special attention fee. That would bring the total cost to $9,260.76, significantly cheaper than the $13,535 cost of the Spark in the U.S. Other registered importers can charge different amounts, but this is what Hobson quoted us for his service.

While it means you have to jump through a number of hoops and pay other fees in order to get the cheapest new car possible, there are other headaches to consider if you’re buying a Canadian car with the intent of driving it in the U.S. First of all, your speedometer and odometer will be listed in kilometers instead of miles. Additionally, you may have to check with the automaker to see if the car’s warranty coverage will still be valid in the U.S. Usually, roadside assistance coverage extends to the U.S, but recalls and warranty work may be different. Still, for a brand new Spark to cost $9,260.76 instead of $13,535, that’s a pretty big deal on a very affordable car.

  • Shiratori1

    Dumb……

  • Amy

    Lame