With all the lackluster offers Canadian manufacturers have been using to entice consumers to shop in Canada, it was only a matter of time before an underdog appeared with a real offer. Hyundai Canada announced today that it was offering an incentive package that ranges from $3,000 up to $5,500 on selected vehicles.

To put this in perspective, there is $3,000 on Tiburon. In Canada the Shark starts swimming for $18,995 while beginning at $16,695. With this incentive and the partial GST reduction Hyundai has on the go, it’s cheaper to buy a Tib in Canada than in the States.

Well done Hyundai!
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Today Audi Canada announced that it will offer consumers additional incentives for cash buyers in an effort to turn the tide of consumers who are staying away from Canadian showrooms. The incentives are as follows:

A3: $1000
A4: $1500
A6 and Avante: $5000
Q7: $3000
A8: Up to $7500

Now I’m not here to stir anybody’s pot, but let’s do a quick price check.

A3 in Canada: Starting at $33,800
A3 in USA: Starting at $25,930
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Following this morning’s news that Chrysler is hitting hard with sales incentives, Volvo has announced that they too are interested in keeping Canadian consumers in Canadian showrooms. Unlike some other manufacturers however, Volvo is offering cash incentives to all new Volvo buyers. That’s right, even on financed or leased vehicles.

To give you an idea, a base S40 in Canada retails for $31,495. Subtract the $3,250 in savings and that comes to $28,245. Still not quite as thrifty as the US price of $24,365 but it is a good start and is close enough that it will keep many buyers from making a run for the border.

Get all the details, including all the deals after the break
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It was only a matter of time before the Canadian arm of all the car manufacturers began to stir. They just can’t sit back and watch as consumers stop buying cars to wait and see when the prices will drop. Perhaps the biggest problem is how to react.

If new car prices are reduced, the dealer body will go insane over their existing inventory which was purchased at a higher rate. That and the effect on a lot full of recent used cars that would then have to be sold at a loss.

The solution seems to be incentives for cash buyers. Over the past few days, Mercedes, Chrysler and BMW have announced healthy incentives for cash purchases. How healthy? While I haven’t been able to confirm actual pricing yet, a reliable source at a BMW dealer gives an idea. Apparently the cash rebate on a 7 Series Beemer is somewhere north of $40,000. That actually seems a bit optimistic given the advertised pricing on a 750i in Canada of $108,500 and $75,800 in the States.

Either way, it seems the giants have awoken and are beginning to correct the pricing structure to reflect the stronger than ever Canadian dollar. Now, maybe consumers might start venturing into showrooms again.

The price disparity between the United States and Canada affects more than just cars, it affects most consumer items. Yesterday, Canadian Finance Minister Jim Flaherty met with the Retail Council of Canada and retail company executives to discuss what changes need to happen to bring prices into line. The end result of this meeting was essentially that Flaherty is barking up the wrong tree and that consumers will have to be patient.
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A soaring Canadian dollar and ongoing news of price disparity between cars sold in Canada and the United States has prompted 4 new car buyers to take matters to court.

Four Toronto residents, who’ve all bought new cars at Canadian prices recently, have enlisted the help of law firm Juroviesky & Ricci to launch a lawsuit against the Canadian and American branches of General Motors, Chrysler, Nissan and Honda. Apparently the Canadian Automobile Dealers Association and the National Automobile Dealers Association have also been named in the suit.

In the suit, the manufacturers are being accused of collusion between American and Canadian head offices of some manufacturers and the subsequent battle to prevent cross border shopping. The suit alleges that US dealers who sell vehicles to Canadians are threatened with penalties that could include revocation of their franchise. Also mentioned is the practice of refusing to honour warranty on US cars in Canada as a method of discouraging cross border shopping.

It’s interesting to note that this news comes hot on the heels of Porsche’s announcement that they would be dropping the price of some models by 10% to help decrease the disparity.

This is going to be a fight worth watching folks!

Full press release and contact info for interested parties after the break
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In our ongoing series about cross border shopping, we’ve focused on the price and convenience. While retail prices of new cars are substantially cheaper in the United States than they are in Canada, the practicality of a cross border purchase depends on a buyers individual needs.

So you’ve made the decision that buying a car from south of the border is the way to go for you. You’ve called around to a few dealers, found your car and done the deal. Now what?

Fellow Nissan Truck Club member Derek Penny recently went through this process when he imported a Land Rover Discovery into Ontario. He’s gone to the trouble of documenting his story for the benefit of other intrepid cross border shoppers:
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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.
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There has been a lot of talk in the Canadian media these days regarding cross border car shopping. The topic has become a daily discussion within the industry, as dealers try to benefit from the cheap prices to the south and manufacturers try to stem the flow of cars into Canada.

Recently we discussed the problem of the price differential from the US to Canada, but we didn’t go into any real dollar details other than the Porsche 911. Most of us will never buy a new 911, so that’s not a real world comparison. Why don’t we see what the differences are for the rest of us and see if it really is worth the effort to buy from south of the border.
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