I recently looked into this as I also find the same issues here on the east coast of Canada (PEI) The cars are either overpriced, badly beat up or a combination of the two. I recently looked at a 240d that needed a lot of work - offered the owner what I thought was a reasonable offer and she laughed at me suggesting that it was worth every penny she was asking because it was a Mercedes.

Therefore I am also thinking of bringing in a car from the US. What I discovered was the following:

1. Cars 15 years & older are exempt from duty if made in the US. If manufactured elsewhere but imported for the US market there was a duty. (I was quoted 6.1% for a 80 Benz) In addition you have to pay GST at the border on your bill of sale & also a $100 tax if you have ac. Any provincial taxes will be paid when you register the car in your province. Check out this site -http://www.ccra-adrc.gc.ca/E/pub/cp/rc4140eq/rc4140-e.html#P93_2350

2. Vehicles older than 15 years not have to meet Can. safety standards. Vehicles newer may have to get modifications done to meet these standards. In the case of a vehicle less than 15 years old there is a $192 fee to register and get the car checked out
through your local CTC. (What a Joke?)
Some newer cars can be exempt - you can check out this website - www.riv.ca

3. Finally you need to inform US Customs of your intent to export a vehicle from the US. They need to have the origional Title ( not the same as registration from what I gather?) 72 hours prior to crossing the border back into Canada. The title has to be sent to the actual border location that you are crossing at. They check the car do some paperwork (no cost) and then you give this stuff to Canadian Customs along with your hard earned cash.

A word of caution, the above is just information that I have gathered through the above websites and by phoning both US & Canada Customs. I haven't actually tried to bring a Mercedes across yet.

Good Luck, and please keep me posted!

Aivars