Freight and PDI charges in Canada

[cruzzer]

Does anyone know why Freight and PDI charges in Canada are generally around double what they are in the US? I notice this to be the case for the Canadian built Honda Civic for example. In Washington state, the delivery charges for a car built in Ontario are US$650. In Vancouver, they're $1300. For a car that's built in this country. Is this a case of finding a way to charge Canadians even more than the already inflated sticker price? It seems to me, it is.

[initial_D]

It is gravy for the dealers.

[Cord]

It is gravy for the dealers.

That's a common misperception. If freight and PDI are line items on the window stickers then they also appear as cost items on the dealer's invoice. Freight and PDI are higher in Canada. The manufacturers are responsible for that not the dealers.

[rrocket]

Isn't PDI a dealer thing though? (Pre-Delivery Inspection)??

[Cord]

Isn't PDI a dealer thing though? (Pre-Delivery Inspection)??

Since the op mentioned Honda, the Honda website clearly lists "Freight and PDI" at $1295. If a dealer is going to try to charge extra for PDI then it is up to the customer to say yes or no, just like if a dealer wants to charge more than the price on the window sticker.

[Zoo]

Cord, do you make decent margin on P.D.I.? We all understand that dealerships have to make money and margin to stay in business. Other than the extra warranties, undercoat etc I wonder if P.D.I. is a decent moneymaker for the dealerships.

[Cord]

Cord, do you make decent margin on P.D.I.? We all understand that dealerships have to make money and margin to stay in business. Other than the extra warranties, undercoat etc I wonder if P.D.I. is a decent moneymaker for the dealerships.

From the point of view of the sales department, there is no such thing as margin on PDI. In the Ford world, if a window sticker says Destination and Delivery (Ford's version of freight and PDI) is $1200 then there will be a line on the invoice that adds $1200 to the vehicle's cost. Now being from the used car world I'm not sure what the exact story on new car PDI is at the dealership owner's level. I'll have to look into it but I believe that Ford pays the dealership to help offset the cost of doing the PDI. At my store these are done by a senior tech with 40+ years tenure so there are definitely some costs involved. (The stories about 16 year old part-time kids doing PDIs may be true but really just indicate the type of stores to avoid - I've never seen it in my experience).

Now, whether or not a store can make any margin on the manufacturers PDI money depends on the efficiency of the store. This is very similar to "holdback" money that manufacturers give dealers to offset floor plan (interest) costs to keep a stock of vehicles on the ground. These monies are paid to the dealers monthly or quarterly and are not tied to the sale of individual vehicles. As such, they may have a bearing on the dealership's balance sheet as a whole but have no bearing on individual vehicle sales.

[toolatecrew]

Cord, do you make decent margin on P.D.I.? We all understand that dealerships have to make money and margin to stay in business. Other than the extra warranties, undercoat etc I wonder if P.D.I. is a decent moneymaker for the dealerships.

You need to ask this as two seperate questions.

Does the sales person/dept make margin pn PDI? NO

Does the DEALERSHIP make $ on PDI? Yes

Why the difference? As stated abouve PDI is a line on the invoice. If it says 1000 for PDI then the sales department pays $1000 to the service dept or to the manufacturer. If they pay it to the manufacture the manufacturer then sends them a check for $1000 on delivery. That $1000 goes to the service dept for say 10 hours at $100 and hour of labour. But since the service dept makes money on labour at $100 and hour and since many PDI operations can and are done by unskilled labour (removing the protective coatting or washing the car can be done by a $10 kid) the service dept makes a profit off of PDI.

So yes it can be "gravy" for a dealership but the salesperson sees none of it.

[articsteve]

Listing Freight and PDI together as one cost makes it easier to deflect customer objections about the real cost of the PDI which is about a quarter of what is being charged.  In the US, generally the charge for prep is $50.00.

[rrocket]

PDI=

Air in tires? Check

Motor Oil? Check

Tranny Fluid? Check

Protective Film Removed? Check



That's about it, really...

[initial_D]

Also, put on CarDealership sticker.

[Winklovic]

Also, put on CarDealership sticker.

and dealer license plate frame.

[swishguy]

I am fighting this whole pricing issue with my wallet. my last 2 cars were purchased from the us & I let the manufacterers know it with a friendly e-mail. Sorry; i buy new every year & figure i overpaid about 100k at least on all my cars combined. I will continue to buy in the us until the price is with in 5%.

[articsteve]

Check torque on lug nuts.  It's always a bad day when a customer's wheel comes loose.  

[Zoo]

Does anyone know why Freight and PDI charges in Canada are generally around double what they are in the US? I notice this to be the case for the Canadian built Honda Civic for example. In Washington state, the delivery charges for a car built in Ontario are US$650. In Vancouver, they're $1300. For a car that's built in this country. Is this a case of finding a way to charge Canadians even more than the already inflated sticker price? It seems to me, it is.

 
That is whacked (people in the US paying half of the PDI that we do; especially when the Civic could literally driven a short distance to many dealerships in Ontario from the factory in Alliston).

I guess there is an increased cost to doing business in Canada with our vast geography, 2 official languages etc.

Still though... I wonder if most of our PDI fees are double like the example you quoted.

[hoodlum]

I guess there is an increased cost to doing business in Canada with our vast geography, 2 official languages etc.

The cost for 2 official languages is a cop out.  Although not official in the US, almost all literature is available in both English and Spanish in the US.  Just go to bestbuy.com for an example.  Now take a look at the following US link.

http://automobiles.honda.com/spanish/

http://www.toyota.com/espanol/index.html

http://www.nissanusa.com/espanol/

http://www.gm.com/utilities/espanol/espanol.jsp

[ovr50]

AFAIK freight charges in Canada are set so that all dealerships, regardless of where in the country they are located, pay the same freight charge; ie. a dealer on Vancouver Island pays no more freight for an Ontario-built car than does a dealer in Toronto. This is done intentionally. As why it's higher in Canada - distances involved, far less dealers, and some amount of "what the marker will bear" likely are the main determining factors.

PDI is a different animal altogether and I suspect that the dealers are told by their Canadian HO what to charge and the markerplace accepts it (for the most part).

This is not necessarily totally accurate, just my understanding.

[Cord]

For a car that's built in this country. Is this a case of finding a way to charge Canadians even more than the already inflated sticker price? It seems to me, it is.

And yet Canadian car sales are at record levels lately while U.S. sales are dropping. Either the vast majority of Canadian consumers have no problem paying Canadian prices or they're just much dumber than their U.S. counterparts.

Again let's look at Honda. Their sales have skyrocketed well the beyond the market in general. Which market force is it that would see Honda lower its prices in the face of increased demand?

[xviper]

PDI=

Air in tires? Check

Motor Oil? Check

Tranny Fluid? Check

Protective Film Removed? Check



That's about it, really...

If they actually do it.  There has been a shocking number of incidents where a new vehicle isn't even checked over, just washed.
Why is PDI so high here?  For the same reason why car prices are so much higher here.  Funny how once the dollars were almost the same and people started to see the difference that car manufacturers started to offer THOUSANDS in rebates that still didn't bring the pricing to equal footing.  So, where did those thousands in rebates suddenly come from?  Were the car companies suddenly losing money.  Get real!  They just made a little less but still plenty to be profitable.  The difference in doing business here?  Again, get real!
It costs a private citizen about $500.00 to ship a car from the east to the west of Canada.  It costs about the same for a US citizen to do the same.  So why does it cost so much more for a car company to ship a vehicle across Canada?  Put finger to lips, blow out and hum and flick finger up and down.
Honda sales may have taken an impressive jump, but that's not because the buying public doesn't care about the difference price.  It's because Hondas have consistence done very well in consumer reports and have developed a reputation for reliability and good resale.  Most people won't bother with the hassle of bringing a Honda from the States and just suck it up and by local because they perceive it as being the "only game in town".  Have "no problem" paying the price"?  No, they do have a problem with it and no, they aren't stupid.  They just grin and bear it and grudgingly pay it.

[jcon]

It costs a private citizen about $500.00 to ship a car from the east to the west of Canada.

Not even close. The best I could do was $1300 from Kingston to Winnipeg.