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Importing Canadian Vehicles to the U.S.

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Comments

  • jlawrence01jlawrence01 Posts: 1,828
    If this is off-topic, please let me know.

    I have lived in the Detroit area for a few years. I never purchased a car in Canada because I could always find a good deal in Detroit on a used car. However, it would not have been difficult to 1) establish an account with a Canadian bank and 2) to use the address of a Canadian friend who was working with me. Nearly half of the nurses and doctors that I worked with were refugees from the OHIP system.

    Having read every message and having talked to friends at Rose City Ford in Windsor and a few of the other dealers, I have determined that the two major issues in buying a new car in Canada are 1) the ability of the dealer to sell you a vehicle and 2) the warranty issue.

    My question is this. If the NEW car prices in Canada are so low, how does this impact the USED car prices? Does the discount continue down the line?

    I never buy a car with less than 40k miles and drive the vehicle until the wheels fall off. Therefore, neither the above issues really bother me as I will be paying for all the repairs anyway.

    Will a new car dealer sell a USED car to me?
  • sonjaabsonjaab Posts: 1,057
    Pick one out at a Canadian dealer. Shop,shop
    they will be MORE than happy to deliver it to
    you......40 something % exchange rate you can
    get a super buy ! Check back on my earlier
    posts.............geo
    BTW; Was in Canada today at the new casino
    near Gan. ONt.....15 miles from me !!!!!
  • rroyce10rroyce10 Posts: 9,359
    ...... It's very easy to by a Canadian vehicle .. and it's done every day and you will save $$, no doubt about it.

    What the problem is: Canadian vehicles have Canadian titles and the "maple leaf" punched on the door -- that in itself is not a problem. Most are built in Canada (and they do a darn good job).. even that isn't a problem.

    What becomes the deal is that .. Canadian vehicles are worth about 40 cts on the dollar at trade time. It makes no difference whether you trade the vehicle in Detroit or Flagstaff .. it takes a beating at trade time. Plus you get no warranty ...

    Me personally, it doesn't make much difference, but the across the Country, it makes a huge difference. Will you save $$ upfront ..absolutely.! Will you get your "clock cleaned" at trade time .. Oooh yeah.!

    If you are going to keep the vehicle for 50/60/70 months, then it becomes a deal .. but for whatever reason, if you have to trade or sell early - the $2/$3/$4,000 you saved, will get sucked up at trade time plus a bunch more ....

    Terry.
  • masspectormasspector Posts: 509
    DTW---I agree with you. What you said is the exact reason that Ford USA is not honoring warranties on canadian vehicles and I can understand that.

    landru--thank you for your clarification of where the export policies are coming from. I, at least, took some of tincup's posts a saying that Ford Motor Company was not involved and that only Ford, Canada and Ford, USA were stating these policies due to who has to pay for the warranty and gets to sell the vehicle. Your example of the thunderbird, I think is a little extreme. That is a rare low production car. I am sure chrysler has the same issue you mentioned with the prowler and viper in Canada. Can you apply those same statistics to say Taurus's?

    kcram--Guys, please do not get me wrong. I am not trying to advocate diverting all of the Canadian supply of vehicles or causing the price to canadian buyers to increase. I agree with captiano that I too do not see a huge flood of US buyers running to Canada to buy cars. If a dealer were selling 80% of their new car invetory at MSRP, why would they care about parts and service profits? Besides there are still canadians that need their cars serviced, right?

    I believe that you are incorrect about the supply issue. You are forgeting that if I buy a car in canada that I do not buy one in the US. Yes the canadian supply would go down if everyone bought cars there, but the US supply would go up. So the supply between the two countries stays the same. It should not take manufacturers long to figure out that they are selling more cars in canada and to divert supply there.

    I understand what you are saying about reversing the situation. And I am sure that you are correct that if the tables were turned, that canadians would be here buying up US cars. In fact I think isn't there an issue with that about cigarettes? There is a huge black market for US cigarettes in canada because they are cheaper in the US than canada due to taxes.

    I have complete sympathy for the canadian buyer over supply and pricing (hey I am a buyer too, just in a different country). I am not making these arguments from a selfish stand point to benefit only myself or my fellow americans. The canadian dollar is lower than the US dollar. Thats reality. It is the same reality that helps me afford a vacation to canada and spend my money in tourism there. If it were reverse, it would suck for americans, but it would still be reality.

    My opinion is that car manufacturers ( and they are not the only industry that does this)are selling the identical product in canada for cheaper than they do to the US due to its higher income levels. Yet when consumers get wind of this, the manufacturers try to erect barriers to consumers buying in the cheaper country because there are no direct laws against my purchasing.

    All in the name of free trade. When a manufacturer decides to build a plant in a foreign country and divert hundreds of jobs there what power do consumers and workers have to stop it? None. But when the shoe is on the other foot and I am trying to buy a product for less money in a foriegn country, all of the sudden the manufacturers have a problem with it. And they have the power to effect me through warranty service on my product. Not sure about the rest of you, but that does seem like a selfish double standard to me.
  • tincup47tincup47 Posts: 1,508
    You were using my example of an Import car company (Honda) and applying it to a domestic (Ford). These are apple and orange comparisons. They have different business models, but there will still be similarities (like apples and oranges are both fruit). Ford is structured totally differently than Honda. That is also the case in your comparing moving assembly plants to buying cars. Many more companies are actually moving Automotive assembly plants to the US than are taking them out. And consumers do have a way to say that they don't approve of companies that move operations out of the US, stop buying their products!
  • audia8qaudia8q Posts: 3,138
    did you know that Rose City Ford is one of canada's largest used car exporters? They ship thousands of cars to the US every year.
  • masspectormasspector Posts: 509
    Below is the text of the beginning of the NAFTA agreement outlining it's objectives. Please read Article 102, Section 1, paragraphs a and b closely. This seems to indicate that goods and services are to be free flowing between the borders of the parties. And that conditions for fair competition (ie honoring warranty service in all party countries) should be followed.

    PART ONE
    GENERAL PART

    Chapter One

    Objectives

    Article 101: Establishment of the Free Trade Area

    The Parties to this Agreement, consistent with Article XXIV
    of the General Agreement on Tariffs and Trade, hereby establish a
    free trade area.

    Article 102: Objectives

    1. The objectives of this Agreement, as elaborated more
    specifically through its principles and rules, including national
    treatment, most-favored-nation treatment and transparency are to:

    (a) eliminate barriers to trade in, and facilitate the
    cross border movement of, goods and services between
    the territories of the Parties;

    (b) promote conditions of fair competition in the free
    trade area;

    (c) increase substantially investment opportunities in
    their territories;
  • robr2robr2 BostonPosts: 8,863
    NAFTA was aimed at reducing the trade barriers erected by the member nation governments in order to facilitate greater trade among the businesses of the member nations. It's goal was to open markets among the US, Canada, and Mexico by eliminating trade barriers such as tarrifs, paperwork, registrations, procedures, et al. No where does it say that Joe American has a right to go and buy a car in Canada, reap huge savings, and expect the home market organization to support it.

    The auto industry was a prime beneficiary of these agreement along with computer makers, farmers, loggers, etc.

    NAFTA has made it possible for an individual American consumer to go to Canada and purchase a vehicle (or any other product) at a potentially huge savings. You can still bring it across the border with almost no paperwork, hassles, or addtional costs. But you have to deal with the manufacturers rules - rules that currently are not regualted by NAFTA. The reason the party is now over is because too many large importers/exporters took advantage of the situation. That is who the mfrs are targeting - not the individual consumer. It's just unfortunate that to penalize the few, the masses are affected.

    Until someone decides that what the automakers are doing is illegal under the rules of NAFTA, then this is the way the game has to be played. Pricing is different in Canada because it is a different economy and automakers price the product based on that economy.

    In my industry we run into the same thing. I buy from a US based manufacturer at price X. Their Canada operation (selling the same products made in plants worldwide) sell in Canada for 25% below X. I cannot buy from the Candian operation unless I am based in Canada.
  • rroyce10rroyce10 Posts: 9,359
    ..... You my friend, are going to wear yourself out with this discussion ...

    Take any product in your own personal home .. and reflect on it for a moment.

    As U.S. consumers, we pay more for the TV's, stereo's, DVD's, etc. at Best Buy's, than our Southern neighbors, we also pay a ton more for furniture than them.

    We pay an extreme amount more for Jewelry, clothes, shoes, computers -- and even golf clubs.

    I'm not agreeing with the system, but that IS the system. Perhaps your frustration would prove more beneficial to yourself, and others than all the posts that you write, if you spent the time directing all this activity to the officials that "created" those prices, in those markets .... hmmm.?

    Terry.
  • masspectormasspector Posts: 509
    royce...I am just taking it all in stride here...You are right, it is the system we have, one person cannot change it overnight, so no sweat here

    rob--good, well written post. I agree with most of what you said. I would just think in this day and age it would not be so hard for the manufacturers to discern the true one time buy consumers, from the import/export buyers.

    "Mr. Canadian Car Dealer, I would like to buy 500 of those 2002 F-150's. They are just for my close family and friends." LOL
  • robr2robr2 BostonPosts: 8,863
    ...but how does the manufacturer tell who brought the car in from Canada? Mr. Consumer might have bought it from an importer who tells him the manufacturer will warrant it.
  • masspectormasspector Posts: 509
    Not exactly sure, but maybe something like this:

    a) US buyer goes to canada to buy car. Shows saleman copy of his drivers license from US. Signs agreement that he is not a exporter. Salesman enters it into the big manufacturer computer.

    b) Buyer then registers his warranty in US at first service, again buy showing his license.

    c) If buyer sells car during warranty period to another US buyer then new buyer shows copy of bill of sale or tag renewal to service department to update the owner info.

    This isn't rocket science. I would think in this day and age of moon walks and buying items from half way around the world on the internet, that someone could come up with a reasonable system to allow US buyers to individually buy in Canada and then register their warranty in the US and it be legit with no fraud involved.
  • cwjacobsencwjacobsen Posts: 293
    It may not be rocket science, but it is another layer of paper (or keyboard) work that I'm sure none of the parties you mentioned are particularly anxious to do.

    CWJ
  • robr2robr2 BostonPosts: 8,863
    ...so it's up to the manufacturer to spend their money to set up a system that benefits the few people willing to travel to Canada in order to buy a vehicle that is less profitable to the manufacuturer in the first place?

    As noted before, Canadian prices are lower because the market cannot bear a higher price. Canadians have less disposable income than Americans and bear a higher tax burden. The only way this will work is if they raise prices in Canada closer to US prices. Then the currency exchange/price advantage of buying in Canada goes away and the new auto market in Canada is destroyed.
  • landru2landru2 Posts: 638
    First of all, there is no fraud or criminal activity involved in an American buying a car in Canada. The manufacturers are just finding ways to prevent it using there own channels of distribution.

    Second, what do you mean by "registering" the warranty in the U.S.? If you mean just going in for warranty work then that is what is done now. If you mean paying a fee to register the warranty then that would remove the incentive to buy in Canada in the first place.

    Of course, showing your U.S. license would kill any sale in the first place.
  • capitanocapitano Posts: 509
    Someone mentioned earlier that an American could buy a used car from a Canadian after 6 months and still benefit from the warranty. It would seem to make sense that the manufacturers see that as "good faith" and not someone trying to "get over." Is that true?

    I live too far away to take advantage of the Canadian pricing, but I like the idea of having what is essentially a US Spec car with a KM/H speedo and KM odo for my next tour in Europe.
  • tincup47tincup47 Posts: 1,508
    To import the vehicle into the US legally, the speedometer would have to be changed to MPH. Most states won't let you register a vehicle that does not have a US speedometer.
  • capitanocapitano Posts: 509
    it has MPH markings on it?

    My Civic has MPH on the outer scale and KPH on the inner scale. Theonly problem I had with it in Germany was that the KPH scale wasn't illuminated at night. Silly Honda.

    I haven't had a DMV want to check my speedo yet. I suppose there is risk in misidentifying the miles for the title, but they don't ask for annual updates and if I never try to trade it in it should be OK.

    Earlier people descibed the risks as loss of value due to getting TMU status, but that wouldn't bother me.
  • sonjaabsonjaab Posts: 1,057
    As I live along the Canadian border. I see
    quite a few Can. imported used cars with km
    odos & speedos. The ones that are changed
    have a importer sticker on the door jamb with
    the speedo changeout info.......geo
  • masspectormasspector Posts: 509
    I respectfully submit that what you posted above is contradictory.

    In one sentence you say "so it's up to the manufacturer to spend their money to set up a system that benefits the few people willing to travel to Canada in order to buy a vehicle". Note the words "few People".

    In the next sentence you say "The only way this will work is if they raise prices in Canada closer to US prices. Then the currency exchange/price advantage of buying in Canada goes away and the new auto market in Canada is destroyed." I will assume that you meant that prices would go up because there would be a large number of americans going to canada to buy cars. If it is just a few americans as you stated above, I do not think that that would have a large impact on the candian market. As stated earlier in this thread, I think if the manufacturers did honor warranties, there would not be a huge rush to the border to buy cars. It only works well for americans in close proximity to canada. This practice has gone on for a number of years, only recently have manufacturers intervened in the process.
  • masspectormasspector Posts: 509
    what I meant by registering was:

    You know when you buy a TV or some software and you open the box and there is a card to fill out with your name , address, etc and serial number? Then you mail it in and you are registered. Tons of companies do product warranty registration this way.

    Manufacturers have systems in canada and the US to keep up with warranties. One extra form or computer click should not be a huge hardship on a US or canadian dealer. And as to your thought about paying to register your warranty, I would be more than willing to pay $100 to $200 dollars to register a car for warranty service, if I saved $3,000 to $4,000 on the initial purchase price.

    Your post "First of all, there is no fraud or criminal activity involved in an American buying a car in Canada. The manufacturers are just finding ways to prevent it using there own channels of distribution." hits the nail right on the head.
  • masspectormasspector Posts: 509
    Let me give you an example from another industry that is similar to this warranty issue.

    In recent years at Mcdonalds they have converted from having the order taker get your drink to putting an ice and drink machine on the other side of the counter so that it is self serve.
    The intent of this change was to make the order taker more productive by just taking orders and not having to spend time filling drinks and refills. It had a bonus customer service aspect of not having to wait in line just to get a refill. I am sure mcdonalds meticously calculated how much they would save in productivity verses the cost to convert the drink machines.

    However there was an unintended consequence. It did not take customers long to figure out that they could bring their mcdonalds cup back in and refill it on a subsequent visit, or order water and instead get a soft drink, or if two people were together, order one drink and share it.

    Once management saw this, they were PO'd because they were losing their $0.95 profit on the $0.99 soft drink sale. So now there is a sign posted at the drink machine that it is for current visit use only and no sharing of soft drinks. So now Mcdonalds is trying to tell me that if I buy a soft drink I do not have the right to share it with my friend.

    Also if you want water, an order taker has to fill these cups and refills for you as the water spigot is shut off on the self serve machine. No productivity savings there. Mcdonalds wants all of the cost savings of this new approach, but has to erect new policies that in the long run negate the cost savings.

    This is exactly what is happening in car sales. Manufacturers want to get the canadian market share as well as the US market. To get the candian business they offer the same car at a lower price. The unintended consequence was it did not take long for americans to figure this out and go to canada to buy cars. Since there is nothing illegal about this, the manufacturers decided to change the rules and set up new warranty policies on their own. I believe in the long run they will expend a lot more time and money trying to prevent this "problem" than they will ever save.
  • robr2robr2 BostonPosts: 8,863
    There is no contradiction - only realization of the scenario.

    In your scenario:

    "I think if the manufacturers did honor warranties, there would not be a huge rush to the border to buy cars. It only works well for americans in close proximity to canada."

    then it truly would be a few people that the manufacturer would have to accomodate. In this instance, the cost of setting up such a system on a per unit basis would be expensive and reduce the already lower profit they make on Canadian market units.

    You seem to ignore is that the issue at hand is not the individual consumer. It is the bulk importers that the manufacturers are trying to stop. As I noted before, if it were not for them it would be simple for you to do what you wish. The only way to stop the bulk importers other than the warranty issue is to eliminate the reason their businesses exist - potential profit. If Canadian prices were adjusted up to say only a 2% difference, the import industry would dry up - as would the Canadian new car industry.
  • landru2landru2 Posts: 638
    You must be government employee. LOL.

    There is nothing illegal about a car manufacturer discouraging you from buying a car in a foreign country either.

    Within the law, a company can do whatever it wants to protect its markets or its profits. You as a consumer do not have a right to benefit at a company's expense (whether it's buying a car in Canada or taking of advantage of McDonalds self-serve soft drinks). If you don't like a company's policies, you have the the right to not buy from them.
  • tboner1965tboner1965 Posts: 647
    You are absolutely right. One doesn't have the right to cheat by sharing drinks at McDonalds.

    However, I do feel it is bad business for a company such as Ford to deny warranty claims on its products, regardless of where it is purchased.

    Here is my thought on this, as a consumer. As a consumer, I really don't care about the Ford, Ford USA, Ford Canada relationships. Why? They don't benefit me. I just want to buy a car and I want the company whose name is on the logo to stand behind the product they produce, regardless of the distribution system they put in place.

    Sure they have the right to set up these systems, and yes the best way to send the message is to not buy those products, if a company will not stand behind the products they produce.

    The company I worked for has/had a similar problem. With the dot com crash, we found ourselves competing with equipment liquidators that would go in and buy up the computer systems (including those with our name on them) and sell them to customers.

    Our warranty documents clearly state that the warranties were good only for the original purchaser, unless the original owner transferred them to the new owner. (Probably through us.)

    So we were in quite a dillema. Our name is on all that gear, and to tell customers that the warranty wasn't valid really didn't cut the mustard, and potentially cost new sales to customers who found our products appealing at the bargain basement liquidator prices.

    We did provide a way to "buy" the service by offering a certification program where we would, for a fee, service the machine, perform any upgrades, and then place it under a service contract. We had to balance the pressures to sell new hardware, with the opportunity for current service revenue and future sales opportunities.

    Our rationale behind certification was that we can't guarantee the product was properly cared for by the dying dot coms. We had no control over how it was shipped, configured/reconfigured and installed in the new customers location. So it was reasonable that if the customer wanted us to support the product, they have to give us the opportunity to inspect, service and certify the product if they wanted to put us on the hook for future service.

    Most customers were agreeable to this.

    I think something similar would be reasonable in the automotive arena. The average car buyer doesn't know and doesn't care about the distribution network, they just want Ford to stand behind that car with Ford on the hood.

    Ditto for the other car makers, lest it look like I'm picking on Ford.

    FWIW,

    TB
  • masspectormasspector Posts: 509
    That was an awesome post. I think it just summed up the last 165 posts in this thread. You are 100% dead on the money. You are always so eloquent and succint.

    rob---I think that we are a lot closer on our viewpoints about this issue than our posts would indicate. I agree that the problem is with the importers. I just do not think it would be that hard for the manufacturers to devise a system that allows individuals to purchase canadian cars, yet stops importers. At the worst I would be able to buy one of each make.

    landru---whats with the govt employee stuff? You are the second salesmen that has said that. I have been on both sides of that fence. George Bush and about half of our US congress are govt employees also.

    There is also nothing illegal about a dealer charging a customer with good credit 15% interest on a car loan, when they could qualify for 7%. But I think we can both agree that that is not the right thing to do. I have discovered in life that there are a lot of things that are not illegal, but that does not make them moral or the right thing to do, as tboner said in his post above.

    As for shopping around if you do not like a companies policies, the buyer can't win that one either. So I go to Canada to buy a Ford, they say no. So I go to Nissan, they say no, So I go to Honda, they say no. See where this is going? There are only a few manufacturers. i am sure they all read the trade pubs and go to trade shows and associations. They keep up with each other on every aspect of their business. Pretty soon they all do not honor warranties in the US on canadian cars. Now where do I go shop in Canada for a new car?

    We have a similar problem in the US with airlines. There are only 7 major carriers. As soon as one implements a new consumer unfriendly policy, they all do. So what do I do, take the bus?
  • Good post, but this raised a question in my mind. A lot of poster here are against giving dealers any money, whether its justified or not. In you scenario, you are asking the people that are trying to save money by buying cars in Canada to give the dealers in the US the money they saved? Now, if the dealers charged let say $100 for the certification inspection, I am sure 99% of the "Import" buyers will have no problem going for it. But I am very certain that the remaining 1% will post here at Town Hall saying this is a ripoff!! 8)

    Again, great post.
  • landru2landru2 Posts: 638
    The government employee quip was because your posts continue to convey the idea that you are somehow owed whatever you want. So you aren't allowed to buy any car in Canada. You can still buy what ever you want in the U.S. You have no right to save money by buying in another country. Likewise, you have no right to airline travel at whatever terms you feel are friendly enough. If you feel that their policies are not friendly enough for you then yes, I guess you'll have to take the bus.
  • robr2robr2 BostonPosts: 8,863
    mass - if we're so close, how come this is the first time I can recall that you acknowledge the importers are the issue?

    tboner brings up the idea of what his company did - charge the equipment owner for an inspection, upgrade, and certification and then sign them up for a service contract.

    Would you be willing to pay for that process and pay an ongoing charge (service contract as I know it is a monthly charge for a warranty) in order to buy your car in Canada? IIRC correctly, terry and bill, (our used car gurus) have said the inspection and certification process costs about $1,000 to do depending on the make. Is this a cost you are willing to pay? The $100 metioned above will barely cover 1 hour of tech time to go over the car. The buyer should also be prepared to pay for a new speede/odo and that labor, emissions testing, et al. Pretty soon, I think the savings will dwindle to almost nothing.

    As for the manufacturers only dealing with people who bought from a Canadian dealer rather than an importer, it may be possible. But the onus should be on the buyer who is gaining the advantage rather than the manufacturer. But eventually you'll have someone who bought from an importer saying they are entitled to the same deal because after all it is a new car. Also you must remember that many of these importers are US new car dealers, so some of the problem is created by the dealers you want to certify your auto with.
  • tboner1965tboner1965 Posts: 647
    We do have the right to buy in any country we want. And we have a reasonable expectation that the car maker stand behind the vehicle. Certainly a warranty is not a right, but I believe it is a reasonable expectation.

    Ideally for the consumer, the carmaker would stand behind the product they build and not hide behind a byzantine distribution network. Such a network really does nothing to help your customers and mostly serves only to make the organization more complex.

    But then I work for a company that provides 24x7x365 coverage for your systems if you want to pay. The warranty is M-F 8-5, but you can buy additional service.

    But we don't draw the line at where you bought the machine. You buy it here and ship it to Germany to use at Rhine Main AFB, you still get service. And we usually come to you too.

    With a few exceptions (software and encryption export laws and regulations require slightly different distributions outside USA) the products we sell here, are the same as sold worldwide.

    TB
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