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 don’t. The price differences on cars are now huge! For example, a new Porsche 911 Turbo cost $123,000 US ($127,000 CAD at today’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.
Is it not great how we are getting screwed. They call get government grants, and we enjoy “free trade” but you can buy a LOADED Toyota Camary for 31,420.00 USD = 33,058.99 CAD in New York State, or pay $38,940 ($44,391 with tax) at our local Ontario dealers.
For $11,000 with a Toyota I would take the warranty gamble, or just be making the occasional visit back to Buffalo for warranty work.
Isn’t it great to be Canadian.
I think the car manufacturers price their goods once a year, so they can’t really respond to the currency fluctuations that fast. I’m planning to get a car very soon, who here thinks that the car manufacturers will lower their CAD prices? The Toyota Yarus lowered their 2008 model prices, I just hope the others will follow suit.
I talked to a salesman at a new car dealership in Yorkton, Saskatchewan the other day. He said that his service department is already seeing Canadian customers bringing in their U.S. purchased cars. Now, Yorkton to Minot, North Dakota is at least a six hour drive. These people are apparently quite willing to take the 12 hour round trip. And they simply don’t care that this salesman’s dealership cannot offer them warranty. They are purchasing aftermarket warranty. I asked him if his ‘FACTORY’ would be lowering their new car prices and he stated that if they didn’t his dealership was looking at at least a 10-15% drop in sales for this year. He would not even hazard a guess as to how much business thay might lose in 2008. The dealer principals won’t comment because the automakers are basically telling them to ‘KEEP THEIR MOUTHS SHUT’. Toyota Cda, it is rumoured, has told it’s dealers to refer all inquiries about cross border price differences to Toyotas head office. The car manufacturers just don’t get it. We live in a free market society and we will no longer tolerate being ripped off. At this time I do not need another vehicle; but if I did I would be off to North Dakota too. We are already planning a trip to do our Christmas shopping.