Key Takeaways
- CBSA requires Registrar of Imported Vehicles (RIV) Form 1 at release for most used vehicles, and missing it triggers automatic exam hold.
- HS classification errors on automotive imports carry AMPS penalties up to CAD 3,500 per Level 1 contravention under the Customs Act.
- CUSMA origin claims on vehicles assembled in Mexico or the U.S. require proof of Regional Value Content under Automotive Appendix rules, not standard CUSMA origin certificates.
- A specialized car import broker will pre-clear admissibility with Transport Canada before you ship, preventing refusal at the border after you've paid ocean freight.
Why Car Imports Need Specialized Broker Attention
CBSA treats vehicle imports differently than palletized freight. A car arriving at the Port of Montreal or crossing at a land border requires admissibility verification against Transport Canada standards, correct HS 10-digit classification, proof of origin if you're claiming CUSMA duty relief, coordination with the Registrar of Imported Vehicles (RIV) for safety compliance, and accurate luxury tax calculation if the vehicle's customs value exceeds CAD 100,000. Most general freight brokers will file the Commercial Accounting Declaration (CAD) but miss the vehicle-specific documentation. A car import broker who handles automotive imports routinely will coordinate RIV Form 1 submission, verify VIN details against the bill of lading, and confirm admissibility before you ship.
We see importers attempt self-clearance on personal vehicle imports, only to have CBSA flag the entry for exam because the declared year, make, or model doesn't match Transport Canada's admissibility database. The exam delay adds two to four working days, and the vehicle sits in a bonded lot accumulating drayage and storage fees. CBSA's Vehicle Importation and Exportation guidance outlines the admissibility rules, but the practical workflow requires pre-clearance checks that a broker handles as standard procedure.
CUSMA Origin Claims on Vehicles Are Not Simple
If you're importing a vehicle manufactured in the United States or Mexico, you can claim CUSMA origin to avoid the 6.1% MFN duty. That sounds straightforward until you read the CUSMA Automotive Appendix. Regional Value Content (RVC) thresholds for passenger vehicles range from 62.5% to 75% depending on the production year and category. Light trucks face different rules than passenger cars. Commercial vehicles over 30,000 lbs GVWR have separate requirements.
CBSA can request detailed production records during a CUSMA origin verification. The manufacturer's certification letter is the starting point, but if CBSA doubts the claim, they will ask for bill-of-materials breakdowns, supplier affidavits, and RVC calculation worksheets. We have filed CADs on vehicles assembled in Mexico where the importer assumed CUSMA eligibility, only to discover that battery packs or transmissions sourced from non-CUSMA countries pushed the RVC below the threshold. The result is duty recovery, interest, and AMPS penalties if CBSA determines the origin claim was negligent.
A car import broker familiar with automotive origin rules will verify RVC eligibility before filing the CAD. If the manufacturer cannot provide adequate proof, we advise paying the MFN duty upfront rather than risking a verification that triggers penalties. That judgment call is worth the brokerage service fee.
HS Classification Mistakes Trigger AMPS Penalties
Vehicles fall under HS Chapter 87, and the 10-digit classification determines duty rates, luxury tax applicability, and statistical reporting. A passenger car with a spark-ignition engine under 3000cc is HS 8703.23, while the same vehicle over 3000cc is HS 8703.24. Electric vehicles are HS 8703.80. Importing a hybrid and classifying it as fully electric will result in incorrect luxury tax calculation and a CBSA correction notice.
The Administrative Monetary Penalty System (AMPS) treats classification errors as contraventions under the Customs Act. A Level 1 infraction (negligence) carries penalties up to CAD 3,500 per occurrence. If you import multiple vehicles and repeat the same classification mistake, each entry is a separate penalty.
Self-clearance importers often rely on the manufacturer's description rather than reading the HS classification criteria in CBSA's D10-14-69 memorandum. A car import broker will classify the vehicle correctly at the 10-digit level and document the rationale in case CBSA requests justification during a post-release audit.
RIV Coordination Prevents Release Delays
The Registrar of Imported Vehicles (RIV) program, administered by Transport Canada, requires that most vehicles under 15 years old undergo safety and emissions inspection within 45 days of import. You must present RIV Form 1 to CBSA at the time of entry to obtain release. Vehicles 15 years or older are RIV-exempt but still require admissibility verification to confirm they meet Canadian Motor Vehicle Safety Standards.
Importers who do not pre-register with RIV before the vehicle arrives will face a release hold. CBSA will not release the vehicle until you provide proof of RIV registration or an exemption letter. The hold generates drayage detention charges and bonded storage fees at the port of entry. We coordinate RIV registration as part of the pre-clearance workflow, so the Form 1 is ready when the vehicle crosses the border.
Some vehicles are inadmissible under Canadian standards regardless of RIV inspection. Right-hand-drive vehicles not originally manufactured for Canadian or U.S. markets, grey-market European models without North American crash-test certification, and certain modified or salvage-title vehicles will be refused entry. A car import broker will verify admissibility with Transport Canada before you commit to the purchase and arrange ocean freight. Refusing a vehicle at the border after you have paid shipping and insurance is an expensive mistake.
Luxury Tax Calculation Is Not Optional
The federal Select Luxury Items Tax Act, effective September 1, 2022, imposes a 10% or 20% tax on the portion of a vehicle's retail price (or customs value for imports) that exceeds CAD 100,000. The tax applies at the point of importation, and CBSA collects it along with duty and GST on the CAD.
The luxury tax calculation uses the greater of manufacturer's suggested retail price or the transaction value plus shipping and insurance (CIF). Importers who declare a low invoice value to reduce duty exposure will trigger CBSA valuation review, and the luxury tax will apply to the adjusted customs value. Attempting to avoid luxury tax through artificial pricing is a Customs Act violation and generates penalties well beyond the tax owed.
We see importers surprised by the luxury tax on vehicles they purchased used overseas for well under CAD 100,000. The customs value includes freight, insurance, and currency conversion at the Bank of Canada daily rate on the date of importation. A vehicle purchased for USD 85,000 can easily exceed CAD 100,000 after conversion and shipping, triggering the tax. A car import broker will calculate the luxury tax exposure before you finalize the purchase, so there are no surprises at release.
When to Involve a Physical Warehouse Partner
Most vehicle imports release directly from the port or land border to the importer or their authorized agent. Some importers need temporary storage while arranging final delivery, especially for commercial vehicle imports arriving in volume. CBSA allows release prior to payment under an RPP bond, but the vehicle must move to a bonded location if it is not immediately transported out.
FENGYE LOGISTICS operates a CBSA-licensed sufferance warehouse in Montreal where vehicles can be held under bond after customs release while awaiting final transport arrangements. That coordination is separate from the brokerage CAD filing, but we work with FENGYE when importers need dock-to-stock handling or short-term bonded storage for automotive imports. Most personal vehicle imports do not require warehouse involvement, but commercial shipments of multiple units often do.
The CAD Filing Workflow for a Vehicle Import
Filing a CAD for a vehicle import through the CARM Client Portal requires the bill of lading, commercial invoice or bill of sale, title or ownership document, RIV Form 1 or exemption letter, CUSMA or other origin certificate if applicable, and VIN verification. We submit the CAD electronically, and CBSA's release system (PARS or RMD depending on mode of entry) will issue a release notice within minutes if the entry is low-risk.
CBSA flags vehicle imports for exam more frequently than general freight. Common exam triggers include first-time importer, high-value vehicle, declared condition inconsistent with age or mileage, RIV status unclear, or origin claim without adequate supporting documentation. An exam typically adds two to four working days to the release timeline and generates additional fees at the port.
We advise clients to arrange insurance coverage that remains in force until CBSA releases the vehicle. Some policies terminate when the vehicle arrives at the Canadian port, leaving a gap during customs clearance. If CBSA examines the vehicle and discovers undeclared damage, you need coverage in place to file a claim.
Small Errors Have Large Consequences
CBSA's post-release audit program reviews vehicle CADs for classification accuracy, origin claim validity, luxury tax compliance, and correct valuation. Audits can occur up to four years after importation. If CBSA identifies an error, they will issue a correction notice demanding duty recovery, interest, and AMPS penalties. The burden of proof is on the importer to demonstrate that the original CAD was correct.
We maintain complete documentation files on every vehicle CAD we file, including RIV correspondence, origin certificates, valuation worksheets, and Transport Canada admissibility confirmation. If CBSA requests justification during an audit, we provide the supporting records immediately. Importers who self-clear often discard documentation after release, leaving no defense when CBSA challenges the entry years later.
Vehicle imports are visible. CBSA knows the make, model, year, and VIN. They can cross-check declared values against market data, verify RVC claims through manufacturer audits, and confirm admissibility with Transport Canada databases. Attempting to cut corners on classification, valuation, or origin claims is higher-risk on vehicles than on palletized freight.
We file vehicle CADs correctly the first time. RIV coordination, HS classification at the 10-digit level, CUSMA origin verification, luxury tax calculation, and admissibility pre-clearance are standard procedure. The alternative is release delays, AMPS penalties, and refused entry at the border.
If you are importing a vehicle into Canada and need a broker who handles automotive CADs routinely, talk to us.
Frequently Asked Questions
What documents does CBSA require to release an imported vehicle?
CBSA requires a completed CAD filed through the CARM Client Portal, proof of ownership (title or bill of sale), the Registrar of Imported Vehicles (RIV) Form 1 for vehicles under 15 years old per Transport Canada's Vehicle Importation Regulations, and any origin certificate if claiming CUSMA or other preferential duty treatment. Missing RIV Form 1 is the most common reason for exam holds on personal vehicle imports.
How much duty do I pay on a car imported into Canada?
Most passenger vehicles enter Canada duty-free under CUSMA if manufactured in the U.S. or Mexico and meet Regional Value Content thresholds (62.5% to 75% depending on production year and category per CUSMA Automotive Appendix rules). Vehicles from other origins face 6.1% MFN duty on the customs value. Luxury vehicles over CAD 100,000 trigger federal luxury tax at 10% or 20% of the portion above that threshold, effective September 1, 2022 per CRA's Luxury Tax Act.
What is the RIV process and when does it apply?
The Registrar of Imported Vehicles (RIV) is Transport Canada's program for ensuring imported vehicles meet Canadian safety and emissions standards. Vehicles under 15 years old require RIV inspection within 45 days of import, and you must present RIV Form 1 to CBSA at the time of entry. Vehicles 15 years or older are exempt from RIV but still need admissibility verification. Failing to declare RIV status correctly will delay release or result in refusal.
Can I use CUSMA to avoid duty on a car from Mexico?
Yes, if the vehicle meets CUSMA Regional Value Content (RVC) requirements and other production rules outlined in the Automotive Appendix. You need the manufacturer's CUSMA certification and supporting production records. CBSA can request detailed RVC calculations during verification, and incorrect claims trigger penalties and duty recovery. A broker familiar with automotive origin rules will confirm eligibility before you file the CAD.
What happens if CBSA examines my imported vehicle?
CBSA vehicle exams verify VIN accuracy, odometer reading, declared condition, admissibility for Canadian roads, and HS classification. If the exam reveals undeclared modifications, incorrect year or model, or non-compliance with Canadian Motor Vehicle Safety Standards, CBSA will refuse entry or hold the vehicle pending correction. Exam delays typically add two to four working days and generate drayage and storage fees at the port of entry.
Do I need a car import broker or can I self-clear a vehicle?
You can self-clear by registering as a Non-Resident Importer (NRI) in the CARM Client Portal and filing the CAD yourself. Most importers hire a car import broker because vehicle CADs require Transport Canada admissibility checks, correct HS classification at the 10-digit level, luxury tax determination, RIV coordination, and origin proof assembly. Errors result in release delays, AMPS penalties, and potential vehicle refusal.
Originally published at https://www.canflow-global.com/en/insights/car-import-broker-what-cbsa-actually-checks-before-releasing-your-vehicle/.
