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Importing Canadian Vehicles to the U.S.

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Comments

  • leadfoot4leadfoot4 Posts: 593
    Then why are there two prices for the same car?
    I live in the metropolitan Rochester, NY area, which isn't all that far from the Canadian border. On many occasions, I've seen dealers here selling cars that originated in Canada. I was never aware that there were two pricing structures. I realize that there are exchange rates to deal with, etc; but why two prices?
  • millerro3millerro3 Posts: 136
    buying American cars from Canada? I thought the idea of buying american was to support OUR auto workers and economy, not Canada's? How much were these poseurs saving?
  • alwaysfordsalwaysfords Posts: 210
    The Canadian $$ is weak compared to the USD, and the pricing reflects it. The Pathfinder board is full of people hwo have done the Canada trip, both on the East and West coast. The cost difference is around 4k on a 28k vehicle. Nissan also has clamped down on the practice in the same way Ford has.
    This sort of stuff is not limited to cars, it happens on lots of products. I am in a different field, and our products are priced differently all over the world. You charge what the economy can support. We have also recently been stung by false distributors setting up shop in second and third world countries, buying our product at the prevailing rate, and reselling them into the US at full price.
  • masspectormasspector Posts: 509
    Can a Canadian citizen/company set up a business of purchasing vehicles from Canadian dealers and then selling them to Americans? Sounds like a no brainer to me. Canadian broker buys Nisaan at $4000 discount sells it to me at cost plus $500. I would do that all day long. Then the dealer and manufacturer are out of the loop.
  • alwaysfordsalwaysfords Posts: 210
    One little hitch - by the VIN they know where the car was sold and can refuse warranty service on that vehicle in the states. Nissan is reportedly trying to address the problem that way now. Your concept was used quite frequently on European cars as well when the exchange rate was more attractive. Even private purchasers got into the act - you could order a Benz for delivery in Germany, pick up the car at a reduced price, vacation with it in Europe, ship it back, and still be ahead of the US price.
  • rroyce10rroyce10 Posts: 9,359
    ....... Right now, Honda and Nissan will not cover their warranties across the borders ..

    Chrysler has just fined 10 of their biggest dealers in Canada for bringing them across the border.

    Ford will stand behind their vehicles 110% --- So we will see what happens next month... l.o.l...

    Terry.
  • shiposhipo Posts: 9,148
    BMW still has a program for European Delivery, I just got back from Germany two days ago after picking up a new 530i which cost me about $5,300 less than buying the car here in the States. Oddly enough, in this case BMW acutally encourages people to buy via the ED option. All I had to do was negotiate with my local dealer for the ED price, he then ordered the car from here, I picked it up in Munich, drove with my wife to Paris for a long weekend, drove it back to Munich, dropped it off, and flew home. My car will show up here at my local dealership in about three weeks, and all I have to do is go over and pick it up.

    Best Regards,
    Shipo
  • im_brentwoodim_brentwood Posts: 4,883
    I know with a lot of them, the warranties ARE Valid in the US.. but they ask a questiuon to the dealer...

    "What do the license plates on the Unit say?"

    Bill
  • tboner1965tboner1965 Posts: 647
    probably couldn't make much $$$. I suspect he/she would have to pay taxes/VAT on the car. To then turn it over to a US buyer, that person would have to pay the canadian sticker, taxes and whatever vig the canadian buyer/seller wanted.

    I suspect the difference wouldn't be enough for the hassle at that point.

    TB
  • Could you be purchasing a vehicle imported from Canada? Read our guide to the gray market before you close the deal: Gray Area - What You Need to Know About Canadian Cars in the U.S.. As usual please feel free to use this discussion to post your thoughts on this particular article or Gray Market vehicles in general. Thanks.

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  • masspectormasspector Posts: 509
    for opening this discussion. I read the article and I think it is a crock what the manufacturers are doing. My points:

    Why is the car so much cheaper in Canada? It should cost the same in both countries, they are both fairly similar.

    And why not honor the warranty? Are canadian cars not made as good as american cars?

    I do not understand why a manufacturer would do this...why do they care if they sell 10,000 cars in canada and 100,000 in the US or 100,000 in Canada and 10,000 in the US? Don't they make the profit on a sold car, whether in the US or Canada?
  • Kirstie_HKirstie_H Posts: 11,077
    From what I could gather, it doesn't seem to be the manufacturers; rather it's the dealerships -- I could be wrong.

    mass, I *think* the difference is in the profit. If a dealer makes, say, $1000 CAD profit on a vehicle, that's not worth as much as $1000 USD. And the demand for particular vehicles is different in the US than in Canada, and thus they can get a near-sticker price in one country and well below sticker in the other.

    But it seems that, by not honoring the warranty, manufacturers are hurting the (seemingly) innocent consumer rather than the illegal importer, no? How could they hit the importer where it hurts?

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  • andre1969andre1969 Posts: 23,496
    ...in relation to the average Canadian buyer's salary? For example, let's pretend my $20K Intrepid cost $15K in Canada, once you factored in the exchange rate. However, if the average U.S. worker makes $40K a year, but the average Canadian makes $30K a year (again adjusting for the exchange rate), then the U.S. and the Canadian workers both have it equal.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    (today's exchange rate is CAD1.52 to USD1.00, or CAD1.00 to USD0.66)

    Andre, you pointed out the problem. When adjusted, the Canadian car is less to the US buyer, and that's why they want it. Doesn't matter that domestically, the car's price-to-income ratio might be the same. It works both ways, though... ask a Canadian who lives near a US border crossing where they buy gas.

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  • masspectormasspector Posts: 509
    kirstie: It is the manufacturers that are making a big push to stop gray market. Yes they are getting pressure from their american dealers, but the manufacturers are the ones doing it. Read some of the QX4 boards or ask landru2 (he is in canada for Ford). They have been sent lists of known exporters and cannot sell to these people. The list comes from the manufacturers. There are also posts of letters from infiniti, ford, nissan about this matter on a number of TH borads. I am sure that the manufacturers are not getting equal profit for the cars in both countries, this would not make sense. They should be making more profit on the car in Canada to compensate for the exchange rate difference.

    andre: I see what you are saying, but in MHO it is irrelevant. It should not matter what the countries average income is. The cost to produce the car is $xx,xxx. I want to sell it for $yy,yyy to the dealer. I should set my $yy,yyy price to equal the profit I want in my local currency. I do not think that manufacturers make a consious effort to sell at lower prices to dealers in countries that have lower average incomes. I could be wrong, but that does not make any sense to me. If I want to make $6,000 USD profit, I should set my selling price accordingly in whatever foriegn currency, so that it equals $6,000 USD profit when the car is sold to the dealership. Following this example, I guess I should find the country with the lowest average income and then try to buy a $100,000 MB for $5,000 and then ship it home.
  • dustidusti Posts: 36
    The manufacturers use the relatively wealthier markets (US) to subsidize their market incursions into relatively virgin or newer markets (Canada, et. al.), so as these markets develop, they already have a foothold.

    Then they get all bent out of shape when free trade (which they're all for since then they can take capitalize on the cheaper markets for making their stuff to sell in the wealthier markets) means the customers in the wealthier markets can also BUY the stuff there.

    Are they stupid or what...?

    nah, just hypocritical as all get out.
  • rroyce10rroyce10 Posts: 9,359
    ....... We have spent months going over this subject .. I'm sure there is a topic open on it somewhere.

    The bottom line is: The manufacturers won't allow it. The Canadian dealers were dropping the vehicles through NY, MI, WI, etc. Most were, and are showing up at the auctions and as late, the traffic has slowed down.

    See the point is .. the Canadian dealers will drop off, lets say 40 vehicles at the auction (they have to be declared) .. let's say they turn and burn 30 of them there. At that time, they have made at LEAST 30% more (per unit) than if the vehicles were sold up north. So there was droves of them popping up ... and that doesn't include the 2,000+ a week that go rolling through the border for US customers at stops in MI and NY, that folks pay 4/7/$10,0 less than American for.

    Well anyway, some have little difference .. some have some large differences, interiors, colors, options, warranties, etc. The most important difference is, the .. mileage. The speedo is on KM .. not MPH. So when these folks buy these vehicles from Canada the speedo reads in Km and they go to the local "converter" in NY, or wherever, pay $800 and have converted over to MPH.

    The one thing the customer has forgot is: the title ... The title will show Canadian .. KM when they go to sell it, the miles on the vehicle become TMU .. and the vehicle is worth about 1/2 of what a normal vehicle would be worth.

    As of late .. Honda, Nissan, Chrysler and a few others, have slapped the dealers in Canada with $250,000 fines, that seemed to slow em' down -- So Chrysler, followed Honda and all 03 Chryslers will void the factory warranty if bought here in the USA ...

    So that's the gist of it .. I would just recommend you don't purchase a Canadian vehicle. It's not that they have a bad product, it's as good .. if not better than ours. But, that is marketing and can cost a consumer big $$$ at the end.

    Terry.
  • landru2landru2 Posts: 638
    it is the exporting of new vehicles that they are wary of. Anything over 6 months old the manufacturers don't care about. With new cars the manufacturers have forced us to treat certain customers almost as criminals that have to prove their intentions before we can sell them a vehicle. There is a comprhensive list of due diligence we must follow if any flag pops up indicating the vehicle may be destined for the U.S. For example, if a person wants to pay cash with a bank draft rather than a personal cheque, the light starts to flash and the process begins. Or, if a young kid living in a downtown apartment shows up with cash to buy a 1-ton Crew Cab diesel, the flag pops up. If we can't show Ford that we investigated thoroughly enough and the car ends up in the U.S. we get charged back any profit plus unspecified penalties.

    From the dealer's point of view we are here to sell the product to whoever wants to buy it. It is very frustrating to have to jump through these hoops and to tell someone that no, we can't sell you the truck because we suspect it will be exported.

    There are larger issues that I'm sure are coming in to play from the manufacturer's perspective though regarding trade agreements, and plain old marketing. For example, the exporting issue has rendered the market for diesel trucks practically non-existant for a regular buyer and there is no such thing as a used diesel truck market. I read that something like 70% of the Thunderbirds sold in Canada are now in the U.S. In fact I've only seen one on the road without a dealer plate since they were introduced.

    Obviously, situations like these affect how a company markets its products but it still feels like the dealers are caught in the middle.
  • dikrandikran Posts: 12
    Regarding your remark to andre in post #6:

    dusti is correct (see #7). Let's say you're a manufacturer and just trying to maximize your profit on your blahmobiles which cost $x to produce. Well, you could say that "the price is $y" (where y > x). And you could choose y very carefully to maximize profit.

    But then one day some joker in your marketing department reads an economics textbook and says, hmm, maybe we should try to get _every_ customer to pay the maximum that _that_particular_customer_ is willing to pay . . .Surely there are some customers who would have been willing to pay MORE than $y for a blahmobile. After all, they rushed in the door on day 1 and paid the asking price. And of course there are some who would pay $x + $100 who we're not selling to right now. So you'd make more money charging lots of different prices rather than just one price $y.

    Well, of course it's hard to charge a different price to every single customer. The customers start selling to each other! The guy to who whom you sold at $x + $100 resells at $x + $500, to someone from whom you would have otherwise been able to get $x + $2000.

    But if there are ways to prevent this, by "splitting your market", then you make more money by selling at different prices. In this case, there are only two prices we're talking about, the US price and the Canadian price. But the principle is the same. In general, you make more money selling at 2 prices rather than 1.

    From the consumer's perspective, this is irritating. Someone else gets to buy essentially the same car for much less.

    But this goes on all the time, with all sorts of consumer goods. DVD prices, for example, vary quite a lot from country to country. Anytime you see a coupon for something in the paper, that's an example of someone splitting their market. The two parts of the market are the coupon-clippers and the non-coupon-clippers. (There are also other purposes to coupons, but that's not the point here.)

    Ok, enough economics lecturing for today.
  • sonjaabsonjaab Posts: 1,057
    THE Archives here on this thread
    for more info and experiences with
    Canadian cars sold in the US......GEO
  • janzjanz Posts: 129
    What IF the person has access to the cars purchased by the Canadian Ford dealership, but perhaps separate in some way and is buying the NEW or nearly new cars and sends them to the US for resale? to a auction?

    Throw in a middleman or two, and it becomes difficult to trace titles and vehicles coming into the US from Canada and there is a LOT of room for profit.

    Canadian cars certainly should be mfg similarly to those available in the US. But this practice is taking away sales from US distributors and because of the high level of fraud, (see the article) it does not benefit the distributors and certainly not the buyers. I agree with Kristi it is probably the distributors and perhaps with THEIR pressure to the mfgs. They hit the importer where it hurts by not honoring the warranties. I do believe it is that simple.

    MASSPECTOR - The economies, GNP, demographics, etc. between the US and Canada are VERY different.
  • masspectormasspector Posts: 509
    Thanks everyone for their input.

    Dusti...Right on. They are all for free trade as long as it benefits them, but heaven forbid it helps the consumer a little.

    Royce...I did not quite follow your example, but what does TMU mean? I think I understand what you are saying, but it appears to be just a perception thing. A Taurus in Canada is the same as a Taurus in America to me. Just the speedo is different. It doesn't make sense to me that it is worth 1/2 as much just because it started out with a Canadian title. Can't that be switched to a US title?

    landru...I agree with you 100%. Canadian dealer wants to sell car, american buyer wants to buy for cheaper price, manufacturer moves a unit...what is wrong with this? Are the manufacturers assuming that if you do not buy the car in Canada that you will buy it automatically in the US? The buyer is just using the currency conversion to his advantage, just like it is cheaper to eat in Canada on vacation for an American. What's next, American tourists have to sleep in the street and bring their own food so they can't save a buck on a canadian vacation?

    I have never taken a businees course, owned a business or been a CEO ( although I like to play one in my fantasies). I am just trying to understand this from a layman's perspective. The scenario of gray market cars seems to only hurt one party, US dealers. Like I said before, The dealer in canada is happy, the buyer form US is happy, and the carmaker sells one more unit. The only person that loses is the dealer in the US that did not get to sell a car. Of course this assumes that the buyer is going to buy a car, period, either in Canada or the US. If manufacturers price their product cheaper to canadian dealers, that may be true, but that makes no sense to me. If I ran the company, I would have a bottom line profit that I wanted from each car and that is the selling price (in my local currency), to whichever dealer buys the car. Of course if we had any factory reps to post here and clear this up would be nice, but they seem to never be on any edmund's boards. And if the manufacturers do price their product cheaper in other countries, then why do they care who buys it? The discussion of gray market products comes up in other products too, such as cameras and electronics. Manufacturers of these products have taken the same tack, not honoring warranties on products bought in other countries. I think that this is unfair to the consumer. The product is identical, just purchased in a different place. They are trying to artifically keep the prices higher in the US market. I will admit that a manufacturer may have a problem with an importer buying 1,000 copies of a product and then selling it in the US, but if an individual consumer wants to buy the identical product cheaper in another country, I do not see a problem with that, and the warranty should be honored.
  • rroyce10rroyce10 Posts: 9,359
    ..... Anytime you change the mileage on a vehicle .. it becomes TMU or True Mileage Unknown -- it "shotguns" the value of the vehicle.

    Even on factory work .. it awful hard to explain away and people do have a tendency to draw a deaf ear to it ... no matter what the reason.

    Terry.
  • masspectormasspector Posts: 509
    Thanks for the clarification. But is it that hard to take the mileage in KM and convert it to Miles? When the title is converted from canada to the US a person looks at the mileage in KM. Uses a calculator or computer to convert the KM to miles and then issues the title in miles in the US. Or do you mean that just because there is a change in the "mileage" on the title that it automatically becomes TMU, even though someone can clearly look at the odometer and see the KM's?

    Also, would this be a big issue if I am buying a brand new car at a canadian dealer and the car has say 10KM on it? I am sure that canadian dealers have laws that apply to new and used cars just like here in the US. From what landru said it appears that this is not seen as a problem with cars after they are 6 months sold.

    Landru, help with this issue. Do you have to issue a statement, like here in the US, that the car is being sold as new and is not used (to the best of your knowledge)?
  • bretfrazbretfraz Posts: 2,021
    I'll tell ya - - the Canadian consumer loses.

    If all Canadian dealers sent their cars to the US for an easy sale, what's left to sell to Canadians?

    Canadian consumers lose again because if cars aren not sold, taxes are not collected. No taxes collected means base tax rates go up and other taxes are increased to make up the difference.

    The fewer cars sold in Canada means fewer cars needing replacement parts, maintenance, gas, tires, etc. It has a growing impact on a massive part of the Canadian economy. Think about it.

    Canada does not exist so greedy and cheap Americans can suck it dry. Every nation has tarriffs and trade restrictions in order to protect their native industries and businesses. The continued erosion of the Canadian dollar is not doing anyone any good.

    On the surface this may look like it only hurts Canada but if you look a little deeper it hurts America too. I encourage all of you to look past your wallets and bank accounts. There's a bigger picture out there.
  • landru2landru2 Posts: 638
    Just to expand on your point that U.S. dealers are the only ones hurt by grey market sales:

    U.S. dealers are some of the biggest buyers of vehicles from Canada.

    Canadian dealers are definitely not happy because as I said earlier they get penalized when they sell a new unit that ends up in the U.S.

    As bretfraz has suggested there are obviously some larger issues at play here. He is absolutely right that the Canadian market would be destroyed if there were no barriers to Americans buying new cars in Canada. I've already mentioned how the diesel truck market has already been wiped out. In the short term I guess the Canadian dealership would be glad to sell to whoever, but as has been repeated many times here, dealerships cannot survive on new vehicle sales alone. And if everything we sell ends up in the U.S., there goes the used car, service, parts, and body shop business with it.
  • masspectormasspector Posts: 509
    Good post and some very valid comments. So now car buyers are greedy and cheap if they want to save a few thousand dollars buying the second biggest purchase of their lives? Tell that to the canadians that cross the border to buy gas or cigarettes in the US. Some one else you need to tell is all of the US manufacturing companies that have moved US jobs overseas, because they are greedy and cheap and want to pay their workers pennies for a day's work.

    I do not think every car buyer in the US would be buying a car in Canada. For some like me, it does not make sense since I live in the SE. I would expect that if I buy a car in canada that I pay their taxes to buy the car.

    But what happened to NAFTA? I thought we were suppose to have free trade. Free trade is a two way street, buyers and sellers. I admire your concern for the welfare of other countrie's economies, however I find it doubtful that the board of directors at the US auto firms are saying "We need to crack down on gray market cars because it will wreck the canadian economy and eventually trickle down to effect joe sixpack here at home." Manufacturers---your response here--->. I thought so, lots of silence from the manufacturers.

    I whole heartedly agree with your last two sentences, however the you needs to include automakers and all businesses world wide. But no business is ever too concerned with any effect they have on consumers, unless they are losing business, just next quarters earnings statement so the stock will stay high. But of course we can just fib about that too, until we get caught (read Enron and Worldcom).
  • masspectormasspector Posts: 509
    You could sell a canadian car at MSRP and still be cheaper than the US model. Couldn't your dealership survive if every car you sold was at MSRP? Also, canadian buyers are not going away. They still need to buy cars and have them serviced and get fuel etc. So this business does not go away. It is like you are saying that if you sell 1000 cars to the US buyers that 1000 canadian buyers would have to walk and could never buy a car.
  • Kirstie_HKirstie_H Posts: 11,077
    mass, that was basically my take on it. I didn't see anything in the article that indicated that there's a supply problem in the Canadian market.

    Maybe I've misunderstood.

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  • dustidusti Posts: 36
    If the auto companies didn't think taking the profits they earn in the US (thanks to the goodwill of US customers who are wiilling to help them out with this) to subsidize their losses from sales in Canada ...

    wouldn't make them money in the long run ...

    they wouldn't be doing it.

    Theoretically, free trade benefits everyone and all countries by directing capital toward its most effecient use and reducing the cost of goods. (ie, increasing productivity world-wide)

    but that's not what these corporations want.
    (for what they want see the part about making money above)

    So now you got big business playing the role of big government in telling Canadian dealerships to "investigate" what their customers are going to "doing" with their purchases.

    Here's a newsflash.

    If I were to buy a Canadian vehicle...

    whether I then decide to follow the laws and regulations in converting it to US specs and crossing the border with it...

    or drive it slam bang into the pacific ocean ...

    THAT is MY business.
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