Driving Across the Border in a Rented Car
There are special rules that apply any time you drive a rented car or truck from one country to another. Customs agents are always on the lookout for people trying to import a vehicle without paying taxes so they pay special attention when you are driving a vehicle that is not yours.
The trickiest situations arise when you fly across the border, rent a car, and then drive back to your country of origin. This will always raise questions with customs agents so you need to have your paperwork and justification in good order.
The basic question the Customs officer is trying to determine is whether you are bringing the vehicle across “temporarily” or permanently. If the agent is not confident the rental is coming back across the border relatively soon they may decide you are importing the vehicle. You will then be subject to duties, taxes, and all of the country’s vehicle safety laws. If they catch you lying about your intent, they will likely seize the vehicle start talking about jail time and large fines.
Crossing the Border into the U.S. in a Rented Vehicle
Generally speaking, both American and Canadian citizens can cross the border into the U.S. in a rental car without much problem. The primary requirement is that the customs agent is satisfied you plan to drive it back out in a reasonable time.
Americans Driving a Rented Vehicle into Canada
American or other foreign citizens should have no problem bringing a rented vehicle into Canada. Questions will arise however, if you are a dual U.S. / Canadian citizen or have a permanent residence in the country. In that case, you will be questioned much more closely to determine your intent with the vehicle.
Canadians Driving a U.S. Rental into Canada
Before June 1, 2012, it was very difficult for Canadians to bring a U.S. rental into Canada. As of 6/1/12 Canadians can drive a U.S. rental car across the border into Canada without paying GST, HST, or Green Levy taxes if they meet all of the following requirements:
- You have been out of Canada for more than 48 hours
- The vehicle is for non-commercial use
- You return the vehicle to the U.S. in no more than 30 days
This is useful if a Canadian tourist fly’s into the U.S. and then decides to drive back home to Canada.
Canadians Driving a Rental After Less than a 48 hour U.S. Stay
If a Canadian resident wants to drive a foreign rental back into Canada but they have not been outside Canada for at least 48 hours, there will be a partial levy of GST/HST taxes. The GST/HST will be computed based on an amount intended to approximate the average cost of a weekly rental of the same type of vehicle in Canada. These rental estimates will generally be as follows:
- $200 / week for cars;
- $300 / week for pickup trucks, sport utility vehicles and vans; and
- $1,000 / week for recreational vehicles, such as motor homes.
The tax will be computed on these amounts and so you will pay a tax of somewhere in the neighborhood of $24 for cars, $36 for trucks etc.
General Rules and Tips for Driving a Rental Car Across the U.S. / Canada Border
Below are general items that apply any time you are going to take a rented vehicle across the U.S. / Canada border in either direction.
- Make sure you have all the normal required documentation for a border crossing such as passports and drivers license. Driving a rental car plus having document issues will probably make for a slow crossing and additional interrogation.
- You must let the rental company know you are going to take their car out of the country, and they must confirm it is ok. You will be violating your renters agreement if you don’t and all kinds of very expensive problems will come up if you get a ticket or have an accident. In addition, U.S. Customs actually requires that the rental company has given their consent for the car to leave the country so it had better be in the rental agreement.
- Auto Insurance – Most auto insurance will cover you in both countries but you should absolutely confirm this with your provider. You must always carry your usual insurance card but you may need to get an insurance card for the country you are visiting as well. Your carrier should provide this at no charge. If you take out the rental agencies insurance they should issue you a non-resident insurance card which must be kept in the rental vehicle.
- Make sure you understand how the mileage rates will work when converting between metric and U.S. standard measurements.
- Keep in mind that rental agencies are never responsible for legal fees, fines or tickets. You may see additional penalties or fees if they end up being assessed against the vehicle.