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Importing Canadian Vehicles to the U.S.

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Comments

  • masspectormasspector Posts: 509
    So you are basically saying that Honda,Japan is selling a vehicle to Honda,USA and saying that if it tears up the day after it is off the truck it is Honda,USA's responsibility and Honda,Japan doesn't give Honda,USA any type of warranty at all? Doesn't sound like very good "Japanese" quality to me if they do not warrant their product at all.

    Is there that big a difference for there to be a Honda,USA and a Honda,Canada? Couldn't there be a Honda, North America distributor and this problem would be solved?
  • bretfrazbretfraz Posts: 2,021
    Warranties involve legal protection for consumers and mfr's and cannot directly be equated to product quality. Even the junkiest products have a warranty - doesn't mean the company making the product is any good.

    When thinking about warranties, you have to separate legal issues from product issues in your mind. Tieing the two together only makes for confusion.

    Same kind of reasoning applies to "North American" distributorships. They won't work. The laws that protect American consumers and American businesses do not apply in Canada or any other country. The distributorships may be very similar in operation but legally have to be completely separate.
  • masspectormasspector Posts: 509
    Some very good points

    There are many businesses that operate out of a North American distributorship model. I was just on www.epson.com and on the home page you choose North America if you want to go to US or Canadian help. I think a lot of electronics companies operate this way also.

    I am by no means a lawyer or know the ins and outs of the legal issues, but wasn't that what NAFTA was suppose to do: create one big FREE TRADE zone? So companies and consumers could trade freely without restrictions or tariffs? It appears "legally" that you cannot be stopped from buying a vehicle in Canada. So the distributors are circumventing the intent of NAFTA by saying, sure you can buy it, but if it breaks, we are not going to cover the warranty. Has this issue come up whith other products, like televisions or sereos? I wonder what Sony or JVC do about this.

    The FDA has finely had to acknowledge and allow that pharmacuetical companies were providing the same exact drugs to canadians and other countries for cheaper and that americans can buy them online in canada or elsewhere for way less than they can in the US.

    Landru has said that Ford fines its canadian dealerships that knowingly sell to americans. Who levies the fines? Ford, Canada or the top Ford company? If it is the top company than that goes against what tincup has ben saying about the distributors paying for warranties. It would imply that a company level above the distributor companies is involved in setting warranty and fine policy for all of the distributorships.
  • landru2landru2 Posts: 638
    Ford of Canada levies the fines you are talking about. As a Canadian dealership, we do not deal directly with Ford Motor Company.
  • capitanocapitano Posts: 509
    the price advantage in buying a car in Canada. I alwys thought the prices would have been the same since I always thought that the standard of living and incomes were comparable. If anything I would have expected prices to be a little higher due to taxes like on fuel.

    The mess in europe is interesting to me and more understandable since there are marked differences in the economies. The manufacturers are insisting on charging Germans more than say the Spaniards or Italians simply because they can. They have paid fines and continue telling dealers in these "discount" countries not to sell to customers from the "premium" countries. At some point the fines may negate any revenue gained from the higher pricing in some areas.
  • robr2robr2 BostonPosts: 8,863
    The intent of NAFTA was to create a large free trading zone in order to compete with the EU. It was targeted at manufacturers, distributors, and retailers in order to provide an incentive to keep production in North America and to open markets to North American manufacturers. It was to initially reduce then eliminate taxes. It also provided for the reduction of paperwork in order for product to cross borders. It's ultimate intent was to create jobs in North America. It was not intended to create level pricing throughout North America. Until the economies of the US, Canada, and Mexico are merged under common laws and currency, you will continue to see this disparity in pricing in many products.

    The EU has those common laws and currency and hence have a true issue with the mfrs charging different prices in different countries.

    Further, although Epson may have a click for North America for their help section, that may be a function of language commonality. Even with this "North America" selection, you can pretty much presume that there is an Epson US and Epson Canada that report individually to Epson in Japan. Different countries have different laws regarding presence/taxes that usually create the above.
  • capitanocapitano Posts: 509
    Earlier the comment was made that importers look to Canada for hard to find colors and or options.

    How are cars allocated to Canada?

    Are there special colors that the manufacturers consider appealing to Canadians but not to Americans?

    Do they sell more manual transmissions in Canada than in the states?
  • masspectormasspector Posts: 509
    Combining all of the above information does not make any sense to me. Let me try to explain with a little scenario. Since Landru has provided some of the information, I will use Ford in my example. This is just an example and does not imply any exact information about the way Ford Motor Company runs its business.

    The way I see it there are 5 principle players involved in this gray market and warranty issue.

    A) Ford Motor Company (the big cheese, the original manufacturer of the vehicle)
    B) Ford USA (they distribute Ford’s cars to dealerships in the US. They pay for and provide warranty service for Ford vehicles in the US according to tincup).
    C) Ford Canada (they distribute Ford’s cars to dealerships in Canada. They pay for and provide warranty service for Ford vehicles in Canada according to tincup).
    D) The Canadian dealership (they buy cars from Ford Canada and provide direct warranty service for these vehicles, in Canada).
    E) The US consumer (they want to buy a vehicle in Canada because of the lower cost).

    I will also make the following assumptions (which make sense to me):

    A) The ultimate goal of A, B, C, D above is to sell cars. This is how they all make their money.
    B) The most cost effective warranty (to a company) is the one where the purchaser never has to have any warranty work done. In other words, the consumer buys the product, and never has to return the product for replacement or service during the warranty period. In effect the company has provided a full term warranty, but has not had to spend any money out of its pocket to replace or service the product.

    Now things start to get fuzzy to me.

    1) US consumer goes to Canada to buy a Ford car cheaper. Landru’s dealership wanting to sell cars to make money sells the car to the US consumer (this is assuming no fine would be levied on the dealership).
    2) US consumer takes the car to the US and only drives it in the US. Any and all warranty work would be provided by US dealerships and paid for by Ford USA, according to tincup.
    3) Ford Canada and Landru’s dealership get to sell a car and make money on it, but never have to provide or pay warranty service on that car. The most cost effective warranty, as noted above.
    4) But wait a minute. Landru has stated that if his dealership did this they would be fined by Ford Canada. Why would Ford Canada fine a dealer for selling a car that they would profit from and returns zero warranty cost to Ford Canada?
    5) I can see where Ford USA would not want to provide the warranty in the US for a product that they did not get to make a profit on and they have to spend money providing warranty service. Ford USA in this case could say we will not provide warranty service for cars not bought from Ford USA dealers.

    According to what tincup has stated the above three companies are separate independent entities. I would also assume that since Ford Canada and Ford USA are two separate independent companies that they would have no contractual obligations to each other as they serve two different markets. There is no compelling logical reason for Ford Canada to fine the Ford dealer for selling the car to a US consumer, unless they are getting some kind of pressure from Ford Motor Company such as their allocation will be cut or stopped if they do not fine their dealers for selling to US consumers. But this would conflict with tincup’s and landru’s statement that Ford Motor Company has nothing to do with the warranty or fine policy of the two independent distributorships.

    This is why I am confused. I can understand Ford USA saying that they will not honor Canadian car warranties, but assuming that the fining issue is also involved somehow with Canadian dealers not selling cars to US consumers (and a $100,000 fine sounds like a pretty big incentive not to) I do not understand why Ford Canada would do this without some level of involvement from Ford Motor Company.
  • landru2landru2 Posts: 638
    Mass, maybe you can add these to your theories.:^)

    How much did Ford of Canada spend to market the Thunderbird in Canada? Would this be seen as a good investment if there are no cars for Canadians to purchase?

    What about market share? If all of Ford's F-350's go to the U.S. does Ford of Canada just say "oh well" while Canadians all buy Dodge trucks?
  • masspectormasspector Posts: 509
    I think I see what you are saying about the supply of vehicles for canadians to purchase. That would be a negative for canadian buyers. But isn't the goal of your dealership and Ford Canada for that matter to sell as many cars as it can? If customers are paying you MSRP for thunderbirds or f-350's, why would you care if they are US buyers are canadian buyers, as long as they are flying out the showroom? Is there some benevolent purpose to sell only to canadian buyers?
  • tincup47tincup47 Posts: 1,508
    You have to remember that these policies came about due to the wholesale importation of vehicles, not the due to the individual sales to private buyers. Unfortunately, the greed of these importers results in closing of the loophole for everyone. You do not necessarily have a right to travel wherever you want to go to save money and also have the same protections offered to people who obtained the vehicle or product through official channels. The manufacturer and/or the official distributor have the right to protect their and their dealer partners investments and profits as long as they abide by the law.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    You're making your comments on the assumption that there is an unlimited supply of vehicles heading for dealers. Assembly plants can only build so many vehicles over the course of a year. To add to what landru said, if he sells all his F350s to US buyers, he can't simply call Ford Canada and ask for an allocation increase because he sold his stock over the border Ford Canada has a pretty good idea of how many vehicles they will sell, and overstock is the big no-no in the auto industry.

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • masspectormasspector Posts: 509
    tin cup--"The manufacturer and/or the official distributor have the right to protect their and their dealer partners investments and profits as long as they abide by the law" It was just sounding like the parent manufacturing companies were not involved in this issue, only the distributor companies. I am sure that Ford Motor Company and Honda, Japan, etc are very involved in these decisions.

    kcram--I see what all of you are saying about Canadian buyers, in theory. If all of the canadian supply is sold to US then no supply for canadians. But is there a law that canadian dealerships can only sell to canadians? I would not think that there is. And I would not think that canadian dealerships are so benevolent that their only concern is the supply of vehicles for canadian customers. Their concern is selling the cars they have for the most profit. I still do not see where the dealership would care if the buyer is american or canadian as long as they pay MSRP for the vehicle.

    I would be willing to bet that if you walked into a US dealership and told the owner that you had a sure fire way to sell most all the inventory he can get his hands on at MSRP, but that he had to sell to canadian buyers and none of his inventory would be available to local buyers, he would say where do I sign up. Isn't this why this is an issue at all? If only one canadian dealership was selling like 10 cars a year to US customers, we would never have heard of this. Alot of canadian dealers were selling to americans or importers to the american market, they did not care what was left over for their canadian buyers, they were making money selling to the US.

    Right now supply does not seem to be a big issue, at least in the US, not sure about canada. If supply were so low, why all of the rebates and 0% finance offers? I would think a company would want to expand and produce and sell more. It doesn't make sense to produce only a set predetermined amount of inventory. If there is an increased demand, build more plants, produce more jobs. I know I am oversimplifying this, but this makes sense to me on the macro side of the issue.

    Oh yes, our good friend "just in time inventory". The reason that retail stores are always out of stock on most items that they carry and advertise on sale. Of course Honda has this down to a science, produce a vehicle everybody wants, but only produce about half of the anticipated demand. Works great for them. They have at least three current vehicles with waiting lists and that sell for MSRP or more.
  • Let's say Ford USA is planning to sell 1 million cars and trucks per year and earmark a budget for that number, but due to the influx of Canadian Ford vehicles, they have to pay for warranty repairs for 1.2 million Ford products, for example. Who do they go to for the extra warranty repair bills? Ford of Canada?
  • landru2landru2 Posts: 638
    I thought it was made clear before that the export policies in discussion are being set by the manufacturers, not the dealers.

    Of course an individual dealer would like to sell to whoever, that is why manufacturers are stepping in - so that the cumulative effects of many dealer's behaviour doesn't have negative effects on an entire market.

    Sort of like how you as a consumer would like to save money on your individual purpose even if the effect of many consumers doing this may be detrimental to a market as a whole.
  • capitanocapitano Posts: 509
    Somewhere in this thread or the Edmunds article there was mention of the used car guys from the US looking for specific color and feature combinations that are hard to find here in the States.

    Why would it be that these were easier to locate in Canada?

    Also on the supply side thing: I can't see a stampede of US buyers cleaning out Canadian dealers leaving the Canadians nothing to choose from. If a dealer sells more units this year, won't he get a bigger allocation next year?

    On the other hand, I could see a TMV shift to the Canadian buyers' detriment since if there are enough Americans fully willing to pay Canadian MSRP, then the dealers won't be as likely to deal.

    Reminds me of a friend who tried to make a deal on a 4runner in Alaska. Offered a cash price well below the ADM sticker price. Dealer told him to walk. Perplexed, he asked the dealer why he didn't want to deal since he always heard that dealers liked to get cash in full upfront. The dealer said that they sold enough 4runners to cover the overhead for the dealership and that any other car was just gravy. Pay the sticker or you don't get the car.

    Then the Canadians would really start to hate the US. "you take all the good cars, drive up prices on the others and you stole all our comedians. We hate you. We hate you. We hate you."
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    And I would not think that canadian dealerships are so benevolent that their only concern is the supply of vehicles for canadian customers. Their concern is selling the cars they have for the most profit. I still do not see where the dealership would care if the buyer is american or canadian as long as they pay MSRP for the vehicle.

    The dealership's problem is, that customer never comes back for parts, service, trade-ins. A good dealer wants to make more than the sale, they want you back for reasonably priced, properly executed service later on. THAT is where the dealer makes their money - on the long-term relationship.

    Let's turn this around. Let's make the US dollar worth less against the Canadian, but leave everything else equal. Canadian buyers will be here in droves with their pick of the litter for what cars and trucks they want because there are more models and combinations available in the US. Wouldn't it bother you that the best vehicles are constantly snapped up by Canadians because they're saving thousands over what the vehicle would cost them at home - AND - the manufacturers don't have the production capacity to replenish those units that leave the country?

    This is what is happening now. Jim in Winnipeg sees a truck on the lot that he could really use. It's a little pricey for him, so he wants to negotiate it down a bit. Tony from North Dakota sees the same truck, and based on the exchange rate, full Canadian sticker is still thousands less than what he could negotiate in the US. So he goes over the border, pays full Canadian for it, and goes home. Where does that leave Jim? Now he has no truck and the dealer is less likely to get a similar unit anytime soon than the US dealer, simply because the overall market is smaller in Canada.

    There's only a finite amount of vehicles to go around. If the supply is constantly under siege by exporters due to the exchange rate, what's left for you as the domestic consumer?

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • landru2landru2 Posts: 638
    About 2 months ago, I read that 70% of all T-birds sold in Canada had gone to the U.S. That combined with the relatively limited production effectively means that even if Canadian buyers wanted they probably couldn't get one. Now, how do you think the used T-bird market in Canada will be affected? There will be basically no such thing as a used 2002 T-bird market in Canada. And obviously, the prices of the few available will be inflated much higher than normal.
  • sonjaabsonjaab Posts: 1,057
    Local ford dealer has 3 T-birds in stock
    at MSRP...Syr. NY area.........
    There is a yellow one up here in Alex. Bay
    NY around..Have only seen 2 Merc. Mauraders
    also........geo
  • bretfrazbretfraz Posts: 2,021
    KC's post #138 is a good one, but I said most of the same stuff in post #16. Looks like we keep going round and round in this thread.

    Sounds like this topic has been talked to death. Again. Which I remarked about in post #97.
  • 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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