A while back, I wrote about the price differential between cars in Canada and the United States. Some of the readers who commented and sent e-mails, couldn’t believe that there was such a drastic difference between dealers who are sometimes even in the next town. There is.
I just came across the following statement by John Chow that hits the nail on the head:
It would also be nice if businesses that import their stuff from the US start to lower their prices, but they donÃ¢â‚¬â„¢t. The price differences on cars are now huge! For example, a new Porsche 911 Turbo cost $123,000 US ($127,000 CAD at todayÃ¢â‚¬â„¢s exchange). Walk into MCL Motorcars and they want $177,000 CAD for it. I told MCL I could save $50K by buying the car from the US and importing it to Canada. They said Porsche would not honor the warranty. I said $50K pays for a lot of repairs!
Now the car manufacturers talk about the difference in infrastructure and supply chain and, and, and. The reality is that car manufacturers are screwing the Canadian consumer with prices that are inflated well above what our friends and relatives to the south of us are paying.
Manufacturers have always been afraid of cross border shoppers, but now that the US dollar has gone for a huge dump the problem is worse (for them) than ever. The US border is within an hour’s drive of downtown Toronto. Other cities, like Vancouver are just a few minutes from the border. Lately the answer from all of them seems to be: No warranty for you. With price differentials like this, who cares if there is no warranty?
Now I know that this opinion affects my livelihood, but why the hell would anyone buy a new car from a dealership in Canada these days? I can understand a grand or two difference, but the examples in my previous post averaged out to $9565 more to buy a car in Canada! That is about what we are planning to spend to take our family of 5 to Disney World for a week. Or, as John Chow says, that pays for a lot of repairs.
When are car manufacturers going to wake up and realize that consumers aren’t stupid. If this continues, the sales market for American border town dealers is going to pick up and Canadian dealer’s business will dwindle.