Discuss: Feature - Canadian vs U.S. vehicle prices: are we paying too much?

[Turbo Bob]

Like I've posted in all the other 'US pricing' threads....

Blah blah blah blah.....blah blah blah blah......

So what exactly are you saying there MD..?

 

[Martin]

 
It’s interesting that the manufactures and dealers also use the term “what the market could bear”, the reality is that Canadians would buy bigger and better vehicles if they were priced similarly to the US market.

The person spending $38,000 on a CRV would probably buy a pilot (which is about 35K USF) and the guy buying the base 6 cyl. CTS may look at the CTS-V or an STS.

Having been inside the Auto industry for several years, I know that the margins go up as you move up the food chain in terms of vehicle type. (i.e. Low margins on a Focus, very high margins on a Lincoln), so it surprises me that the OEM’s wouldn’t try to move Canadians up market.

So, we’ve had some good suggestions:

1.   bring in US prices when buying your next car
2.   Buy from the US

But what could we really do ?

With a Provincial election around the corner, perhaps it’s time to make this an election issue  . . . . when that politician knocks on your door and asks for you vote, ask him if he will take the fight to Queens park. Now I know that the Government will never regulate prices, but the politicians are supposed to be our collective voices. Pressure from the political arena can only help

If the Journalist truly want to help (which they don’t – they should be impartial pervious of information), they would report on a ground swell of concern by citizen on the “LACK” of buying power we have with our new mighty dollar. Ok, so Bananas are 10 cents less, but having the Ontario manufacturing sector is being battered by the high dollar and those who still have jobs, have to pay a premium for their 2nd most expensive purchases?

Making a large fundamental shift as we all want will not come overnight. It will take a lot of lobbying, thousands of similar internet threads, FAR FAR more press coverage and the creativity of Canadians to get the best THEIR hard earned, over taxed dollars can get.

STAND UP and SPEAK OUT !

[safristi]

can't find the post at the moment but "somewhere" it was posted that over 114,000 (or thereabouts) cars were bought by Canadians in the States (this year so far OR whole of last year )..
 THATS STILL a SHIPLOAD or 10

[martin]

Here's a website of a US Used car dealer willing to ship across the border.

wwwsascars com

[soj]

So the hope of getting any appreciable number of people in the general population to source their cars in the USA is fruitless IMHO

I agree. So basically the argument is that Canadians have a "right" to buy things for less than they are being sold for. I'm in favour of cheaper prices as much as the next guy but I just don't see a compelling argument that that "right" exists, especially for discretionary purchases like cars and trucks.

tpl; you're entirely right, I was just being facetious because as Cord has stated, there seems to be a perception among some that somehow they have the "right" to buy a car for the same price as in the States.  Not so long ago when the exchange was $0.65, we in Canada were the ones that were favoured.  Now we're on the flip side but if this whole issue does bug someone enough then they should increase their line of credit or take out a second mortgage and go buy it in the States.  Sadly the reality is, when you factor in all costs, the savings are pretty marginal.  Guess what, those certain manufacturers know this as well and that's why they're doing what they're doing.

 

[johngenx]

Sadly the reality is, when you factor in all costs, the savings are pretty marginal. 

There is a long list of cars that have substantial savings.  There are several northern US Subaru dealers that do a big business selling to Canadians.  One salesperson in Seattle make a very good living selling mostly to BC residents.

As I stated in a different thread, this is not just a "I want a cheaper car" issue.  The strong dollar has effects that are traditionally offset somewhat by the lowering of prices of imported goods, and without those price changes, we may have medium-range effects that have much stronger consequences than simply paying "too much" for a car.

[Jameel]

can't find the post at the moment but "somewhere" it was posted that over 114,000 (or thereabouts) cars were bought by Canadians in the States (this year so far OR whole of last year )..
 THATS STILL a SHIPLOAD or 10

I read an article that stated it was 122,000 cars.

[Cord]

Which consumer goods aren't cheaper in the U.S.?

[safristi]

 TOQUES..............

[johngenx]

Which consumer goods aren't cheaper in the U.S.?

For some time now, climbing and high-end backpacking gear has sold for the same in Canada as the US.  We used to get things much cheaper when the dollar was lower, but even now, we pay about the same.  A $100 item in the US typically sold for $100 in Canada.

Now, this wasn't the case some time ago.  We got HOSED.  How did it change?  MEC is one of the big reasons.  MEC was formed by some climbers that got sick of the situation and tired of having to travel to the US to get the good stuff and pay a decent price.  MEC, being a coop, forced the other stores to get aggressive and really altered the Canadian market for gear.  People often said "Canada is a small market, that's why we pay more."  Hear that around here?  MEC proved that idea wrong as manufacturers played ball big time with MEC in order to be in Canada with the right player.

[Cord]

I assume this MEC was formed well before the dollar's recent run up? If so, then currency changes weren't really an issue as it has been described for car prices.

Does anyone have any example of any consumer products where the price has dropped due to the Canadian dollar's rise? I recently read that some analysts are predicting that the CAN $ will head back to the $.90 US level in the new year. If it does, should we all expect prices to rise in unison?

[AVToller]

Mountain Equipment Coop (MEC) was formed back in the 1970s in Vancouver. I've been a member for 30 or so years. 

[Cord]

Thanks for the clarification. So obviously that example has nothing to do with recent currency fluctuations.

[TopGun]

Re: The inability to lease or pay cash for your NEW car

There are lots of used car dealers that purchase nearly new (~ 10,000 km) cars from the US and ship them for purchase/lease/finance here.

[Cord]

Re: The inability to lease or pay cash for your NEW car

There are lots of used car dealers that purchase nearly new (~ 10,000 km) cars from the US and ship them for purchase/lease/finance here.

Yes, there sure are plenty of alternatives to buying new cars. I think that's why there doesn't appear to be a compelling argument that someone just has to have a new WRX (or whatever).

When someone says to me. "I can buy the same car for $10,000 less down the road," the standard response is always, "then what are you doing here." I don't see why it would be any different if "...in the U.S." is used instead.

[sailor723]

This topic seems to be getting more attention in the mainstream media. CBC radio's "The Current" did a fairly indepth feature this morning including an interview with the federal finance minister. The basic tone of the piece was that consumers are getting the shaft and that somebody is making a S**tload of money on imported goods (especially on cars.)

[swishguy]

There are 3 dealers on Regent Avenue in Winnpeg that bring in a ton of used US iron. They have a rep living in Phoenix & they buy used rentals from the auction there & ship them up. They are selling them typically 2-3K less then a similar canadian used vehicle.

[Baron von Raschke]

I listened to the show on The Current as well and it was very informative.  The Current archives their shows, so you can still hear it on their website if you missed it.  I would provide the link, but I can't until I have posted at least 10 times on this forum.

Glad to see this issue being aknowledged and addressed on CBC.

[taflet]

This may be a slightly longer reply, but I thought I'd copy in a reply I received directly from Subaru Canada when I posed the very same question to them just last week.  First, my inquiry:

As you may be aware, there are a segment of buyers out there that are looking to the US for their new car purchases due to the very favourable current exchange rates.  In my cursory research on both the Subaru Canada and Subaru US websites, I've found a substantial difference in prices - even after taking into account the exchange rates.  It is the  2008 Impreza WRX that I refer to below:

Subaru Canada
    Base model Impreza WRX 5-door with manual transmission ---- CA $33,895

Subaru USA
    Base model Impreza WRX 5-door with manual transmision ---- US $24,850 (converted at today's exchange rate of 1.0485 = CA $26,055)

This is a price premium in Canada of almost $8000 or 23% higher than the same base vehicle offered in the States.  I'm guessing that a dealer may even sell for less once prices and options are negotiated into the package.  So I have a couple questions that I hope Subaru can answer and clarify for me:

1.  Why is there such a huge price differential between the US and Canada?  Subaru should be keeping up with the financial times and offering the same value pricing in both markets, given that today's buyer can so readily do comparative shopping.
2.  If a buyer was to purchase a new Subaru in the US and import it into Canada, would Subaru Canada honour the warranty from an imported new vehicle?

And here is the fairly quick reply from Subaru:

Thank you for contacting Subaru Canada, Inc. regarding American vs. Canadian pricing concerns.

Historically, vehicles have always been less expensive in Canada compared to the United States. However, with the abnormal strength of the Canadian dollar this year, the price gap between the United States and Canada has become a concern for many Canadian consumers. Nonetheless, the exchange rate is not the only factor that we consider in determining our pricing; otherwise, automobile prices in Canada would constantly fluctuate throughout the year whenever the value of our dollar changes. It is important to note that this situation is not exclusive to Subaru. Rather, it applies to the entire auto industry.

Canadian Subaru vehicles are priced to be competitive within the Canadian market and in part are driven by market conditions. Subaru Canada, Inc. will continue to monitor and adjust prices competitively to those key competitors in the Canadian market.

With regards to your question about warranty, there exists a reciprocal warranty agreement between Subaru of America and Subaru Canada, Inc. This agreement covers US vehicle owners who have purchased US vehicles and currently reside and/or are traveling, transferred, or vacationing in Canada. The intent of the reciprocal warranty agreement is to allow US visitors the benefit of emergency warranty repairs while in Canada.

As it is an uncommon practice and only meant to offer assistance to US citizens vacationing or in transit through Canada your dealer may encounter difficulties determining if a repair is warrantable which may in turn delay the repair process. This program was not designed to accommodate Canadian residents who have purchased a Subaru vehicle in the United States for the purpose of importing the car into Canada.

Should you decide to import a US vehicle into Canada you will need to contact the NRIV (National Registrar of Imported Vehicles) at 1-888-848-8240 or online at riv.ca for additional information regarding this process.

Yes, we do honour the US warranty. However, as the reciprocal warranty agreement was not designed for Canadian residents that purchase new US Subaru vehicles for the sole purpose of being operated in Canada, as such you may encounter some delays having warrantable work completed as we do not keep records of US vehicle information in our database and US warranty coverage is not the same as Canadian coverage.

We trust that we have clarified our position regarding this matter.

Kind regards,

Danielle Gavan

The position stated is similar to the one quoted in the article - "we price according to the local market".  To me, this sounds like "we will charge as high a price as we can get away with until consumers demand better".  The comment from Subaru regarding warranty coverage was delicately put, but is a basic admission that vehicles will be warranted. I think with more vehicles being imported from the US, the manufacturers will need to start standing behind their products. If they would prefer that they get the sale of the vehicle from the buyer as well, they better start looking at modifying their pricing policies in keeping with this new reality.  This is the same situation as happened with various manufacturers with the advent of online shopping.  Buyers were able to price compare vehicles from a much wide geographic region to get the best deal.  Now that region includes the US  for us Canadians while our dollar climbs towards par.  There are plenty of articles and postings out there from people who have imported from the States.  It will only get easier as the volumes go up.  So, as a previous poster said, the manufacturers will only change when their actual sales start dropping. Or more directly, if you go into a dealer looking to purchase and then tell them that you can get the same car for X dollars less (usually significant numbers) in the US, the dealers may start taking this feedback to the manufacturers directly themselves.  They'll only change when their bottom line starts changing.

Taflet

[Turbo Bob]

Canadian Subaru vehicles are priced to be competitive within the Canadian market and in part are driven by market conditions. Subaru Canada, Inc. will continue to monitor and adjust prices competitively to those key competitors in the Canadian market.

To me, this sounds like "we will charge as high a price as we can get away with until consumers demand better".

Sorry to be blunt Taflet, but which part of supply and demand don't you understand?  Why would they sell for any less if they are hitting their sales targets?

There may be a lot of people unhappy with the pricing but until demand slows, Subaru have no need or inclination to reduce the price.  Hopefully this thread and your efforts will highlight the fact to the masses and the masses will vote with their cash.