OTTAWA — The federal government agency responsible for tracking cars and trucks imported into Canada from the U.S. is bracing itself for a record-setting year as tens of thousands of Canadians head south to buy vehicles for thousands of dollars less than they could get them in Canada.

The Registrar of Imported Vehicles, an agency of Transport Canada, is on track to deal with as many 160,000 vehicles this year, which will be bought by Canadian consumers from U.S vendors. As recently as 2002, the Registrar was averaging about 38,000 vehicles a year.

In 2006, as the loonie started its climb versus the U.S. greenback, the Registrar recorded 113,000 transactions. This year, it's on track to record between 150,000 and 160,000 transactions.

"Our numbers just went through the roof," said Gary Moriarty, the Deputy Registrar of Imported Vehicles. "We are now receiving 5,000 phone calls a day."

Before the loonie surged against the greenback, calls to the Registry were averaging about 900 a day, said Moriarty. Earlier today, one U.S. dollar was worth 97.63 cents Canadian. Or, put another way, one Canadian dollar was worth 1.024 U.S. dollars.

'Pretty sweet deal'

Nick Bontis, an associate professor at the DeGroote Business School at McMaster University in Hamilton, is one of the thousands of Canadians who have found significant savings south of the border. This week, Bontis took delivery of a 2007 Lincoln Navigator, a luxury sports utility vehicle, that has a manufacturers' list price in Canada of about $75,000. After winning an online auction, Bontis paid a New Jersey dealer $46,200 U.S., the equivalent of about $45,000 Canadian.

"Just on the purchase alone, we saved over $30,000," said Bontis. "It's a pretty sweet deal but you have to do your research. It's not as simple as heading down to New Jersey and driving the car across the border."

To get the vehicle -- a dealer's demo model with only a few hundred kilometres on it -- from New Jersey to his home in Ancaster, Ont., Bontis paid a shipping firm $1,000, then paid a customs broker $100 to handle the paperwork at the border, and also was required to pay a $200 import fee charged by the Canadian government.

Even with the extra fees, his total vehicle purchase from the New Jersey dealer was well under $50,000 U.S. compared to the nearly $80,000 Canadian he would have been charged by an Ontario dealer.

Just as he would on a vehicle purchased in Canada, Bontis also paid the Goods and Services Tax and provincial sales tax on his purchase. But there are no extra tariffs or duties that have to be paid by consumers importing a car from the U.S. into Canada.

"We're very, very happy with the vehicle that arrived today in our house," Bontis said.

"We looked in Ontario, first of all, to find out what Navigators were available and at what price and we were starting to get a little discouraged because we saw such a huge difference between the Canadian prices and the U.S. prices."

Bontis is the kind of sophisticated consumer ideally suited for such a purchase. For one thing, this was his fourth purchase of a Lincoln Navigator. As a result, he was familiar with the product he was buying.

And, as a business professor, he understood some of the risks and liabilities he faced as a consumer completing a complex transaction largely on his own.

Registrar's website

But he also praised the website operated by the Registrar of Imported Vehicles for providing a comprehensive checklist of issues a potential purchaser has to deal with before completing the transaction.

"We went through that website and did every single thing step by step that that website asked for," Bontis said.

Moriarty's team at the Registar has collected plenty of helpful guides and information for Canadians considering purchasing vehicles from the U.S., most of which has been posted at the agency's website at http://www.riv.ca.

The Registrar's mandate is to ensure that any vehicle imported into Canada meets Canadian safety standards.

"Folks should know that the U.S. standards are substantially similar but there's some small significant differences," Moriarty said.

An Ontario Ford dealer -- Lincoln is a vehicle brand marketed by Ford Motor Co. of Detroit -- said that the price differential problem is "the hottest issue dealers in Canada have with Ford right now."

The dealer asked not to be named, citing concerns about spoiling the relationship between the dealership and Ford.

The dealer said he believed it would have been impossible for a Canadian dealer to sell a 2007 Navigator for a price of less than $50,000.

Most dealerships in Canada are independently owned and receive what is, in essence, a franchise from the manufacturer to sell a particular product line. Acting as a group, dealers have considerable power to influence a manufacturer's decision. But manufacturers have considerable power, as well, to fine a dealer or even suspend a dealer's ability to sell their cars.

U.S. dealers face threats

CTV News has learned that some U.S. dealers have been threatened with fines or suspension if they sell new vehicles to Canadian consumers.

There are, however, several bureaucratic pitfalls that could trip up Canadian consumers who are seeking vehicle bargains in the U.S.

• The U.S. Department of Homeland Security (DHS) requires that any vehicles being brought into Canada are registered with the department. The measure, intended to reduce auto theft, requires importers to provide DHS with the vehicle identification number ahead of the border crossing. Then, once the vehicle reaches the border, the importer is required to show proof that it has the appropriate DHS paperwork.
• It is illegal to import certain vehicles into Canada. The Registrar of Imported Vehicles maintains a list of which vehicles can and cannot be imported.
• Vehicles imported into Canada must meet Canadian safety standards. For example, Canadian vehicles must have daytime running lights. There is no such requirement in the U.S., although many vehicles in the U.S. have them. Where there is a deficiency, a consumer will have 45 days after importing the vehicle to correct any deficiencies before the vehicle must pass a Transport Canada inspection.

Moreoever, vehicles sold in the U.S. are not necessarily identical to the same models sold in Canada. Jim Miller, vice-president of Honda Canada Inc., said, for example, that windshield washer reservoirs tend to be larger in Canada because of our harsher climate.

For the same reason, batteries that are part of the original equipment on vehicles sold in Canada tend to be more powerful than those sold in American vehicles. He said there are dozens of other kinds of small but significant differences like that between Canadian and American models that can make a big difference to a Canadian consumer.

Honda and its upmarket cousin Acura, are notable in that warranties for their new vehicles are specific to the country they are sold in. In other words, a Canadian who buys a Honda vehicle in the U.S. will find that the warranty is no good in Canada.

BMW Group Canada of Whitby, Ont., by contrast, will honour warranties on vehicles purchased in the U.S. but says maintenance plans sold by U.S. BMW retailers are valid only in the U.S.

"BMW Canada's focus is on our own Canadian retailers. We encourage Canadian retailers to keep customers in Canada by offering the highest level of service possible," said BMW Canada spokesperson Jochen Frey.

Bontis asked Ford about his Navigator's warranty. New vehicles sold by Ford come with a "North American" warranty, which means they are covered in both the U.S. and Canada, regardless of where they are sold.

"Ford of Canada's concern is the consumer, and we do honour the warranties in both countries," said Gina Gehlert, public affairs manager with Oakville, Ont.-based Ford of Canada.

Gehlert -- and other manufacturers contacted by CTV News -- said pricing of new vehicles in the Canadian market is meant to reflect Canadian conditions.

"Despite exchange rate fluctuations, we have and continue to price to the Canadian market. The Canadian vehicle market is highly competitive with 16 (manufacturers) selling vehicles here."

Warranties are often a key issue for new car buyers. Canadians who choose to go to the U.S. for their purchase will have to do extra homework to make sure they have the warranty coverage they seek.

"There are a lot of risks involved in importing a vehicle form the U.S.," said Bontis. "First of all, caveat emptor. Are you actually buying and receiving exactly what you think you're buying and receiving?"