We’ve determined that on your average sedan or pocket rocket, the Canadian consumer will save about 5 grand by picking up a new car south of the border. On the surface, that would appear to be a pretty choice if one were in the market for a new car. But is it really the best choice?
Financially, there are obviously some vehicles that are a better deal than others and typically, the dollar value is relevant to the price point of the car you are looking at. For example, a Mitsubishi Lancer sells for $13,990 in the States and $2,500 here in Canada. At the other end of the scale, a BMW 750i, which sells for $108,500 in Toronto can be bought south of the border with a whopping discount of $32,700.
A $32,000 discount makes the decision pretty clear. $2,500 on the other hand is a bit more fuzzy.
The owner of a $13,000 car is likely a lot more reliant on his vehicle than the guy who’s driving a sedan that cost over a hundred grand. The BMW guy probably has another car or two in his garage if that one goes down for a couple of days, while the Lancer guy will be riding the bus. If something fails that isn’t covered under warranty on the BMW, the owner will be able to afford to chalk it up to the risk he took to buy the car from another country. The guy who bought the less expensive car probably doesn’t have that cash in reserve. Besides, repairs can escalate to $2,500 pretty quickly.
Is warranty an issue? Once again, that depends on the manufacturer. Some manufacturers are used to their cars traveling the world on a regular basis and their warranties reflect that. Other manufacturers have always shied away from cross border warranties. Have a read through your warranty book. Chances are there are some clauses in there that limit your ability to take your vehicle across borders. As the industry tries to cope with the cross border issue, most brands are panicking that they & their regional dealers are going to suffer. As a result, many are sticking hard to those clauses buried in the books.
Another thing to think about here is the dealer. I’m not talking about the loss of revenue to the dealer body, that’s another topic for another day. No, I’m talking about getting your car serviced once you’ve brought it home. Even today, there a some dealers who will not service cars they did not sell. Also, when it comes to getting paid for warranty claims on cross border cars, dealers have a tough go at the best of times. Dealer service departments typically don’t behave too favourably when they are forced to do something and then have to fight to get paid. End result? Don’t expect a very warm reception from the dealer. If you are one who is nit picky about little things about your car, you can almost expect to get run out of the place.
Another thing to think about is the actual vehicle. Is it compliant to the country you plan to take it to? Believe it or not, many US and Canadian models are equipped differently. You may have to make upgrades or changes to the vehicle to bring it home. Daytime running lights are required here in Canada and many cars don’t have provision for them. It’s not uncommon to see a new car from the States driving around Toronto with an ugly set of dim fog lights bolted to the front grille that were installed by our national tire chain. Dumb.
So is it worth it? As with any other big purchase, it is important to analyze your own situation. Will you be saving 2 grand or 10, or 30. What are the policies of the brand you are considering buying? How reliable is the car you want to buy? How much do the typical repairs on that vehicle cost in relation to how much you are saving? Can you handle taking the occasional long weekend to stay near your selling dealer to get warranty work done? Will you save enough to make this feasible? If you’ve answered all of these questions with a resounding yes, then maybe your next new car should come from across the border.