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From a Canadian perspective and from the Province of Ontario, a lot depends if the car is still legally licensed. There are so many scenarios and you best speak with the US Customs Office, possibly check out their web site. Technically, if selling within the province, you should surrender the plates, with the owner at a Ministry of Transport office. Now the car is your responsibility and technically you cannot drive it until it receives a fitness certificate. A temporary permit cannot be issued for an "unfit" vehicle, even if you need to transport it to the border.
I guess a simple solution is to have it put onto a trailer or flatbed, then delclare it coming back to the States. Even with a set of provincial plates, you are not again allowed to transfer the car into the States because you're not technically the owner.
I suggest the seller calls MOT (Provincial) and CCRA (Canada Customs and Revenue Service) and asks what is the proper procedure. In Canada, these agencies publish a set of guidelines for the importation of a vehicle into Canada, so I figure your Government must do the same, with any exclusions and exceptions. It seems outwardly like a Catch 22, but I'm sure there's some bureaucratic procedure to protect both the seller and buyer and collect the maximum amount of duties and taxes - so much for Free Trade between our countries.
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Cam a.k.a. CVOLVO.COM
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