Questions for the Dealers here.

no. However it can be considered 'curbsiding'.
Go to the u.c.d.a website or omvic's and see what constitutes curbsiding and what doesn't.

Cheers!


EDIT: I am NOT a dealer! but my sales licence is attatched to one which allows me certain 'benefits' although not really as I RARELY use them.

 

James is right. To clarify there is no set number of cars that a private person can legally be allowed to purchase and sell for resale. Even if it is only one car you could be charged with curbsiding and face fines. Are you going to get caught, my guess is unlikely but you could. I wouldn't be surprised if OMVIC checks with RIV to see who is importing what and then check with the mto to see how that car is registered. You would have to pay pst and gst so I doubt this will be a money making venture.

 

To do it by the book you will need to become a dealer. You need a property suitable with a sign, dealer insurance, become a licensed salesman and register a company. Not worth it for 1-2 cars a year. I see your in Ottawa, maybe look into what is nessecary in Quebec as the rules might be more lax.

The only way you can go to the MTO and register a car without paying tax is with a dealer number. If you tried to claim taxes back through your corporation you would now be making the tax man and omvic mad. Again not worth it for 1-2 cars a year.

 

The moment the taxman sees you remitting the first couple of GST/HST credits for car purchases you'll be red flagged and get a GST/HST audit before they even think about whether or not they'll want to refund your money.

This means two things, if you claim they were for personal use, they'll deny the GST/HST credit, audit your past few years returns and penalize you, and hassle you on all future returns.........if you claim they were for business resale, you'll get audited, caught for not having dealer/business licenses, and for not being registered appropriately with the taxman, as well as the province. There are financial implications for that as well.

US dealers, US auctions, and US parts suppliers won't deal with you on an equal playing field (wholesale pricing) unless you can prove you are a legitimate dealer, which means having licenses. 2 or 3 car purchases into a relationship with a US dealer I get much better pricing than right off the bat.......I usually get marginally nicked on the initial buys, until they see I am legit and my money talks more than once. I (and James or Vasco, et al) can call someone up and say "hey it's me again, what is my price on such and such" and know that it is a real number.......unlicensed curbers buying "onesies and twosies" per year do not get that.

There is no money to be made by importing and holding high end US cars for resale. If there was, CAD dealers would have lots chock full of them. Probably 90% of the high end US cars that are currently here and for sale, were initially presold to someone at the time of importation, and are now back for resale again.

There is however, money to be made by importing cars that are PRESOLD for clients. But in order to make a worthwhile margin on the transaction, you gotta be a dealer to get the best pricing all the way along the chain of events that occurs in the deal.

 

The definition of cubsiding is not necessarily black and white. The idea behind "cubsiding" is evading registration issues, most specifically taxes. If you import the car as a private person and pay the PST upon registering it in a private name you can resell it to whoever you want to from there but you threw away the PST and GST. If you are involving a company along the way trying to avoid this you face all kind of restrctions, basically then you have to be a dealer to avoid legal and tax issues.

 

I thought a 'curb-sider' was a private person who sold cars without a dealers licence? so if they wanted to be asses about it and saw him selling two 'expensive' cars in a short period of time they would have to assume he's a curbsider or looking to a make a quick buck which should be fine as it's the same as buying from a dealer, DO YOUR DUE DILIGENCE!
But they're not making any coin from him which is the real problem.

 

Sorry James, I think we are saying the same thing with different words. At the end of the day a cubsider is selling the way they are to avoid taxes since they are not licenced and cannot defer or recapture them...or the vehicles they are selling are not registered to them. My main point was that if he registers them personally in Ontario to himself he can then resell them without being considered a curbsider but WITH incurring the 13% taxes he cannot claim back legaly.

You and I both, doing what we do for a living, know there is no easy way for this whole thing to fly but this is an open forum and all questions deserve an answer. I believe he should just buy a car here, or have someone like yourself help him find one down south and be done with it. If after enjoying the car he decides to sell it the all the best...but as KDS said if the was that much of an upside you and I would have a fleet of them for sale here already.

 

Edward, it is my understanding that even if he were to pay both taxes you can potentially still be charged with curbsiding. I forget where I put all of my omvic literature but I recall that anyone purchasing vehicles for resale that is not a dealer can be charged. I know what your talking about not registering the car in there name and then do the transfer from who he purchased the car from into the name of the long term buyer.

As a note, anyone who sells a car privately you should go with the purchaser to the license office to see the vehicle transferred out of your name to the purchaser. These guys leave the cars in peoples names until they are sold and must likely driving around uninsured opening a huge possibility of legal issues if anything were to happen.

 

Nope, if he pays both taxes and it is his car = not curbsiding. CRA might have something to say if you do a certain amount of transactions thus saying you are running a for profit business. Then you are considered a dealer operating without a licence. But as far as OMVIC and the MTO in Ontario with our current "1 or 2" a year discussion it believe it would not be a problem....other than being profitable.

 

I agree 1 or 2 cars a year and you most likely won't have any trouble. Let's agree to disagree on what defines a curbsider as this is just going to turn into us beating a dead horse. It really is a grey area and I hear people all the time saying stuff like, "I can do 4 a year and it isn't curbsiding".

 

Lax? Sorry Tony but I don't think so. Getting a licensed as a dealer in Ontario is much easier to do than Quebec. In Quebec you have to be bonded. Enough said.

There are some good resposnses here. Alot I didnt read fully but here is my take (As I am a registered dealer). The set number you are allowed to sell privatly for profit is 0. You have to be carefull because OMVIC does NOT mess around. The curbsiding penatlies can be huge. I see in the OMVIC newsletter those who get nabbed and the huge penalty they pay per car!

Now, as some have mentionned. Simply get a license and attach it to a dealer who is willing to work with you and let you run cars through him. keep in mind that if you have a sales license you can ONLY sell through that dealer. You cannot go around assuming you have full dealer privledges.

There is NO SUCH thing as a broker in Ontario. However, with the new OMVIC rules set to take charge in the new year there's talk that there will be a broker license issued. Personally, if you have access to space for the minumum 5 cars required and also the proper zoning then i'd just get your dealer license. It will take some funds $2-3G's iirc for OMVIC fee's. 2 months wait. Lot's of paperwork and lots of questions asked etc. And voila, you can be a dealer.

You guys are talking about collecting GST and PST just because you have a company? Oh I don't think so....

Not trying to be a smart a$$. Just sharing info since i've been there. I've also attended the OMVIC meeting for the upcoming rules (a huge amount to remember). I am also a UCDA member (5 years now). Man, time flys

This is what I have learned. Take it with a grain of salt. Simply do your due dilligence, order the info package from OMVIC and see for yourself.

 

Always the 13%. Unless you have indian status. 5%GST when it's dealer to dealer. That is it. Then of course the HST hits...

 

There are two licenses (3 if you count a wholesaler license where you only wholesale from dealer to dealer - much easier to get as you only need a commercial office).

A salesperson license is what all salespeople have to have in order to sell for a dealer. As a dealer you personally have to have a salesman license (aside from the actual dealer license). There is a book you must study and test etc to do at the ministry in order to get the sales license.

Yes, only dealers can charge tax as only dealers are allows to retail. If it's a private sale we both know there is no tax to collect. All you do is write up a contract and the buyer then pays the 8% (Soon to be 13%) at the ministry when they register the car they just bought...

 

Classicferrari, My name is not Tony it is Tyler although I know the Tony you work with well(your out of WFC right?). I have no experience with Quebec and your point was taken.

Ferrari355 I don't want to sound rude but if you are not aware of a salesmans license and asking about collecting tax without being a dealer you have A LOT to learn before you can even decide if this is for you. www.omvic.on.ca is the website for the Ontario Motor Vehicle Council. These people are the ones who regulate the automotive industry from a sales standpoint. You can find all the requirements for becoming a dealer.

I lurk here a lot and post very sledom. What I have seen is a lot of discussion on price in the U.S. vs Canada, and if you are reading about $60k 360's and thinking your going to sell them for $100k here for a smooth $40 profit its not happening. This business is not for everyone and I was born into it (not exotics/ferraris but cars) and if it wasn't for that I probably wouldn't be in it. Long hours, alot of aggravation and a real gring. I do love it though and most likely will continue to do it for the next 40+ years. Start by looking around the OMVIC website (look at all the charges laid in one of the sections and notice that it is almost all for curb siding).

There are a lot of guys on here knowledgeable on the topic and if you decide you want to pursue this after all send me a PM with any questions you run into because you are just scratching the surface in this thread.

Good luck!

 

Sorry Tyler. My mistake. Tony was the original poster. And glad you got my point. By the way don't take it bad that I am being sooo to-the-point. I am being harsh in my posts but its not towards you or anyone here. Just trying to get my point across.

It's a touchy subject. For one, you can get in serious trouble for curbsiding and two, if one wants to play the game you simply gotta pay and jump through the hoops like we all did to be a dealer

Cheers,

P.S Yes, Tony does work at WFC. As i've mentionned before in another thread....I registered my dealer license out of there. That is another common practice. If the place is big enough and zoned properly then you can register your dealer space from another dealership. Another tip for the original poster. There are some buildings that register a number of dealers under one roof. Very common.

 

FWIW, here in Alberta, you can register and sell 6 cars a year PRIVATELY in your own name, as long as you pay and forfeit the GST (as applicable, depending on whether or not it is a dealer or private purchase you made) plus, buy provincial license plates in your personal name, which also means getting insurance each and every time.

You are not considered a curber......yet.......but do it more than 6 times, or do it but don't buy plates while staying under 6 cars, or trying to get the GST back on one, and you get dinged as such.

 

Tony buy the damn car! you have been looking for years and years now, you should of bought that yellow 355 fiorano that was for sale a few weeks ago