Car importation nightmares - I'm sure you've all heard this before!

[VividDreamer 15]

In need of some help!

My fiancé and I are still a long ways off from our K-1 approval, but I'm trying to prepare in advance for whatever I can from the Canadian side of things. My biggest hurdle, it looks like, is gonna be my car.

I have a very large upside-down loan on it and I'm sure I won't be able to qualify for a big enough loan to pay it off to import it lien-free.

Selling the car is really out of the question - even if I sold it for 18-20k I'd still be in for the remainder (my buyout right now is 29k) and don't have access to that kind of difference to be able to sell it. My credit was bad enough at the time of purchase that I needed a co-signer; I've been working on improving my credit score but I'm sure I haven't done well enough to qualify for a 10-12k loan! Scotiabank essentially told me I could sell it, put the proceeds from the car towards the loan and continue making the payments until the car is paid off early - but I'd have to find someone willing to buy a car with an active lien on it. Plus I get conflicting information on whether in NS a car with a lien can be registered or not. DMV website seems to imply it can, but regardless, I'd have to find a buyer that would trust me not to stop making payments. I know I won't, but anyone understandably would be wary of taking on such a risk.

So - after calling Scotiabank and being told there is no exceptions to the rules (I had asked about a letter of permission to take it across the border, since I have that aforementioned co-signer in Canada who is not moving and had seen this option online) - I can only figure my single remaining viable option is to move without my car, keep making payments from the US until such a time as I've established enough of a US credit rating to refinance from a US bank and import it then.

The caveat to that (why can't any of this be simple?!) is that my car doesn't have a TPMS. 2014 Mazda3. I can't find any good information on getting one installed per American requirements, the cost, where to go to get it done - anything!

Has anyone who's gone through this got some information on this subject? I'd SO appreciate any insights!

Edited June 13, 2016 by VividDreamer

[NikLR 13,227]

Your credit can start over in the USA.

A car with a lien can be registered everywhere. How do you think you got it registered? A car with a lien out of country is another story all together.

I don't know about new installed but my Jeep needed new sensors and they were $60 a piece. But it already had sensors.

Does bringing your car to the USA cause your loan to be defaulted? Otherwise you have a year after you move to import your car.

The hard part about that is insurance.

[NovaSprings 89]

I am assuming that your reference to NS is Nova Scotia. If this is true, then yes you are able to register a vehicle in Nova Scotia that has a lean on it. The lean holder will not be mentioned in the registration. Nova Scotia does not "title" a car, like in the US but rather gives you a certificate of ownership and registration. However, I am surprised that Scotiabank would advise you that could sell the car and continue to pay on the loan. What would secure the loan if the car is no longer owned by you? I am not sure the legalities of selling a car with an active loan on it.

Regarding TPMS and importing your car, you will first need to contact Mazda to get a letter from them call a Certificate of Conformity. If TPMS comes up on the letter, you only option is to go through a certified importer...they are expensive and sometimes they cannot retrofit. However, my car was a 2014 (Audi A4) and the letter did not come up with TPMS because it is something that is electronic and can be turned on by the dealer in the US. I would start with getting the letter first, depending on what the letter says (if you can get one, some manufacturers will not give letters, not sure about Mazda, but I do know KIA will not) that may guide you on if or how expensive it will be to import.

Congradulations and good luck

[VividDreamer 15]

Does bringing your car to the USA cause your loan to be defaulted? Otherwise you have a year after you move to import your car.

The hard part about that is insurance.

Do you have any links or anything I can look at to say I would definitely have a year to go through the official import process if I did take my car across the border? As for the loan default, I suppose I would have to call Scotiabank to figure that part out.

A car with a lien out of country is another story all together.

So - if I did find a way to get it insured for that year long period until it may be possible for myself and my fiancé to refinance it from the States (quick Google shows Esurance may be a possibility) - would I need to have it US registered (which you say would be a problem with an out of country lien) in that year long period or would I be able to keep my NS plates as a "visitor", even though I will be moving?

Thanks so much for your reply! Much appreciated.

[VividDreamer 15]

I am assuming that your reference to NS is Nova Scotia. If this is true, then yes you are able to register a vehicle in Nova Scotia that has a lean on it. The lean holder will not be mentioned in the registration. Nova Scotia does not "title" a car, like in the US but rather gives you a certificate of ownership and registration. However, I am surprised that Scotiabank would advise you that could sell the car and continue to pay on the loan. What would secure the loan if the car is no longer owned by you? I am not sure the legalities of selling a car with an active loan on it.

Regarding TPMS and importing your car, you will first need to contact Mazda to get a letter from them call a Certificate of Conformity. If TPMS comes up on the letter, you only option is to go through a certified importer...they are expensive and sometimes they cannot retrofit. However, my car was a 2014 (Audi A4) and the letter did not come up with TPMS because it is something that is electronic and can be turned on by the dealer in the US. I would start with getting the letter first, depending on what the letter says (if you can get one, some manufacturers will not give letters, not sure about Mazda, but I do know KIA will not) that may guide you on if or how expensive it will be to import.

Congradulations and good luck

So I'll have to add contacting Mazda to my list of to-dos; thank you!

Scotiabank said the lien would still be active on the car until I personally finished paying off the loan so I suppose that is how they would secure it if I did sell it. I'll have to look more into the legalities but that is what they told me! Lol.

Thanks again!

[NovaSprings 89]

Here is a very helpful website that I used when I was preparing to import my car, in case you haven't come across it yet, check out http://www.nhtsa.gov/cars/rules/import/

I am just wondering the legality of selling a car to in other person with a lien following the vehicle. I would assume that you have a duty to inform the buyer, but I am not a lawyer....I would check that out to make sure.....just a thought.

[NikLR 13,227]

https://help.cbp.gov/app/answers/detail/a_id/421/kw/timeframe%20allotted%20to%20move

https://www.cbp.gov/trade/basic-import-export/importing-car

• Nonresidents may import a vehicle duty-free for personal use up to (1) one year if the vehicle is imported in conjunction with the owner's arrival. Vehicles imported under this provision that do not conform to U.S. safety and emission standards must be exported within one year and may not be sold in the U.S. There is no exemption or extension of the export requirements.

(the first time you enter, even on an IR1/CR1 you're considered a non-resident at the time of entry by the CBP. Every every afterward you're considered a returning resident. )

https://www.atlasvanlines.ca/moving-services/ca-to-us-moving/

You can sell a car that has a lien on it to someone else. Generally speaking that means they take over the lien and it's a lot more paperwork than a straight forward sale. In the OP's case, the lien is worth 15k or more than the actual value of the car. You can buy a 2017 Mazda3 for 10k less than this car's lien! I would imagine, that if a person could buy it without the lien, the lien stays in the name of the original lien holder and it's just like a normal loan. I would assume that Scotiabank (who I despise due to student loan issues back in the early 2000s) keeps getting payments on said loan. They probably don't care, as they have you,( and someone else?) on the hook for this loan.

At this point it may be worth it for the OP to declare bankruptcy in Canada since their credit doesn't follow them to the USA. However, you may want to see if that would absolve you of this upside down loan (that you share?) Understandably you'd have to rebuild your credit in Canada if you ever moved back and if any payments were required you'd have to make those as well. http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home But it may rid you of the issue of this car, it's loan, and let you fully start over fresh in the USA.

[VividDreamer 15]

At this point it may be worth it for the OP to declare bankruptcy in Canada since their credit doesn't follow them to the USA. However, you may want to see if that would absolve you of this upside down loan (that you share?) Understandably you'd have to rebuild your credit in Canada if you ever moved back and if any payments were required you'd have to make those as well. http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home But it may rid you of the issue of this car, it's loan, and let you fully start over fresh in the USA.

This is a suggestion I hadn't thought of until you brought it up, but I don't know if it would be possible in my situation, either. It would be amazing to be able to start fresh; and I have no intention of moving back to Canada once this is all done. But, any way I can think of to get my mother off the cosignature, short of Scotiabank voluntarily releasing her (HA! Man I feel you on hating this bank) would essentially be creating a new loan - and looking at the details of bankruptcy, apparently any large purchases or loans taken out directly prior to filing bankruptcy can be exempt from being cleared on the argument that the person filing had no intention of repaying said purchase. And I couldn't bring myself to ruin my mother's credit for my own selfishness, if I were to file with the car co-signed as is. There's also apparently a rule that I would need to stay in contact with the bankruptcy trustee monthly and inform them of any moves and make small payments every month to pay the bankruptcy filing fees (200/month for 9 months, from what I've been able to find, which is cheap!) but I don't know if that would disallow me from moving on my visa.

Mazda Canada has a form for compliance letters so it seems to be something they readily offer. I'll start with submitting one of those and seeing if the TPMS issue makes it onto the letter. Provided it doesn't.... I guess I'll have to take it with me under that one year rule, and once I'm working in the states and can boost mine and my fiancé's newly combined incomes on a joint bank account, apply to have it refinanced from a US bank and then do the formal import. If it does show up on the letter then I guess I'm back to being as lost as I was before.

Thank you so much for your links and suggestions. I really appreciate it.

[NikLR 13,227]

Look into the bankruptcy more. Im not sure it would affect your mother or not. They cant force you not to move. That would be illegal. You should stay in touch with them though, not to burn all your bridges.

[NikLR 13,227]

Cars in the USA have to have tpms just like cars in canada have to have running lights. Out of the two, running lights gets my vote for safety. I suppose if you were in a normal car the tpms wpuld help but i constantly run my jeep tires below pressure for more even wear (and comfortable ride.) Sure the gas costs more but tires are expensive when theyre that big! Lol

[HollywoodNorth 22]

I've known people to burn bridges in Canada by declaring bankruptcy* and walking away from everything [ie. handing in the keys and car to the bank as a voluntary repossession]... your credit history would clear up after 7 years but its a moot point if you are not returning.

Of course this doesn't apply to any government debt which has no statue of limitations, ie. you would still be on the hook for federal student loans , etc [but not private loans].

Any co-signers would be severely impacted by such a move however. I'd check with a financial adviser.

*-actually I've known people to just completely turn in their keys and just walk away period, no bankruptcy. Unsecured loan, and they get slapped with R9 on their credit report, but Scotiabank couldn't find them in 7 years so it dropped off the credit report eventually.

Edited June 17, 2016 by HollywoodNorth

[VividDreamer 15]

*-actually I've known people to just completely turn in their keys and just walk away period, no bankruptcy. Unsecured loan, and they get slapped with R9 on their credit report, but Scotiabank couldn't find them in 7 years so it dropped off the credit report eventually.

I've considered this too, but from what I understand, when you turn in a vehicle voluntarily, the bank sells the car at auction, applies whatever proceeds from that to the loan, then you're still "on the hook" for the remaining balance. Wouldn't be a problem for me if I didn't intend on repaying the remainder, but I'm sure they would still go after my cosigner for the difference, would they not?

I had another idea, of going to a cheap used car dealership (or new) and getting an older model of a car that would 100% meet the import requirements. Like a Ford or something manufactured in the States so I also wouldn't have to pay duty on import. If I could sell my car to them for more than the "new" car is worth (though I'd still have a loan because of my current upside-down one)... I'm thinking I could bring that car across on the one-year grace period, and refinance it from a US bank when mine and my fiancé's combined incomes are good enough. Then officially import at the local airport, where I wouldn't have the problem of modifications or the TPMS issue.

Is this a possible option?

If so, do VJ members have a list or a good website that states very explicitly what makes/models meet US import standards without any modifications or notes on the US Compliance letter?

Thanks again guys for everything

[NikLR 13,227]

You'd probabaly have to talk to an importer who deals with cars more often than us.

[VividDreamer 15]

Not to bring back a dead topic but I had some slight progress with this process and am at a loss again. Lol. I figured I'd post here rather than make a new topic so the history of the situation is already here.

So I got the compliance letter from Mazda. As predicted, it shows the TPMS issue (as well as an overdue recall they never notified or fixed - thanks Mazda!).

However, on physical inspection of my car, I have a FMVSS sticker with the car's VIN (the Canadian equivalent is on a separate sticker), as well as an EPA compliance sticker under the hood. Someone please correct me if I'm wrong - but isn't the letter from the manufacturer only like a secondary resort if these stickers aren't present (as they aren't on most Canadian vehicles)? Could I not import this car without said letter, seeing as by all normal means it appears to meet the American standards? I have pictures of both of these stickers, if it will help.

Then - assuming the above is correct - at what point is the lien on the vehicle checked? In NS at least, I have the title to the vehicle. I'm moving to South Carolina; the only thing I can see on the SC DMV website regarding registration says they want the name and address of the lienholder "incase they need to be contacted."

Is the lien status checked at POE/import or registration? Or not at all?

I'm thinking of just taking the car over the border without notifying Scotiabank and continuing to make my payments from the same Canadian bank account, if the lien won't prevent me on the US side of things from importing/registering. I don't intend on skipping out on the loan. I just want my darn car!! And I have a backup plan too of refinancing through TD as apparently they let you take a vehicle cross-border where they operate in both; but that would be a secondary option as I'd be paying interest yet again.

Edited July 30, 2016 by VividDreamer

[NikLR 13,227]

Lien is checked at registration at the very least and probably often checked at import to make sure you're importing a vehicle you own. Technically you don't own a car with a lien.

[At least in my state, every title says if there is a lien, if its clean (no lien) or salvage (rebuilt from any crash.) So you know when you buy a car if there is a lien on it.]