MP3inOttawa
Member
US versus Canadian Prices
Living closer to the border of Ontario and New York, I've heard lots about this "different price" issue for Canadians and US citizens lately.
I wish I could find an article I read on one of the local newspaper web sites recently....but here was the jist of the article...
Prices of vehicles (Manufacturer's suggested retail price) in Canada are 5% to 10% lower than those in the states. The reason Manufacturers establish lower prices, by country, they take into consideration many factors:
1) that country's economy and where their dollar is ranked compared to the US $.
2) the competition, e.g. if you take a Ford windstar minivan and price it according to the Canadian economy and dollar, say it ends up at $25,000, but Chrysler comes along and doesn't consider the economy and dollar, but just converts their US price to Canadian funds, the comparable van would sell for $29,000 - they wouldn't sell any!!! They have to establish a country specific MRSP to be competetive.
The article I read then went into a very common scam that is going near border towns. Something the manufacturers are very upset about and are considering punishing their dealers....
Lets say a dealer in upstate New York has a customer who wants a certain car that is $27,000 US on the lot (MSRP) but the customer says thats a little to rich for me....the dealer takes him in the back room, says, look, I can go to Canada (20 minute drive away to a border town such as Cornwall Ontario (only a 2Km bridge separates the US)), US dealer goes to a Canadian dealer, purchase the EXACT same vehicle for (after dollar conversion) $22,000 (US) - a difference of $5000 US. The dealer drives it back to the US, customer gives dealer $1000 for their "work/troubles/finders fee", the customer then buy a 3rd party extended warranty for $500 (as the manufacturer's warranty is not valid if it crosses a border) - and guess what, th customer gets the exact same vehicle, picks it up from a local dealer, with a warranty for a total of $23,500 - which is $3,500 lower than if he bought the exact same vehicle at the US MRSP from the exact same dealer.
The article then interviewed a few people who have purchased a vehicles this way, and they are totally happy, they have a warranty, got the new vehicle they want, and for less than their neighbour down the street (...who's dealer didn't do the Canadian scam).
Apparantley, this is happening a lot and the manufacturers are really getting pissed about it as they see it as their own dealers are hurting their profits. The manufacturers are looking for ways of "punishing" any of their dealers who do this.....
Living closer to the border of Ontario and New York, I've heard lots about this "different price" issue for Canadians and US citizens lately.
I wish I could find an article I read on one of the local newspaper web sites recently....but here was the jist of the article...
Prices of vehicles (Manufacturer's suggested retail price) in Canada are 5% to 10% lower than those in the states. The reason Manufacturers establish lower prices, by country, they take into consideration many factors:
1) that country's economy and where their dollar is ranked compared to the US $.
2) the competition, e.g. if you take a Ford windstar minivan and price it according to the Canadian economy and dollar, say it ends up at $25,000, but Chrysler comes along and doesn't consider the economy and dollar, but just converts their US price to Canadian funds, the comparable van would sell for $29,000 - they wouldn't sell any!!! They have to establish a country specific MRSP to be competetive.
The article I read then went into a very common scam that is going near border towns. Something the manufacturers are very upset about and are considering punishing their dealers....
Lets say a dealer in upstate New York has a customer who wants a certain car that is $27,000 US on the lot (MSRP) but the customer says thats a little to rich for me....the dealer takes him in the back room, says, look, I can go to Canada (20 minute drive away to a border town such as Cornwall Ontario (only a 2Km bridge separates the US)), US dealer goes to a Canadian dealer, purchase the EXACT same vehicle for (after dollar conversion) $22,000 (US) - a difference of $5000 US. The dealer drives it back to the US, customer gives dealer $1000 for their "work/troubles/finders fee", the customer then buy a 3rd party extended warranty for $500 (as the manufacturer's warranty is not valid if it crosses a border) - and guess what, th customer gets the exact same vehicle, picks it up from a local dealer, with a warranty for a total of $23,500 - which is $3,500 lower than if he bought the exact same vehicle at the US MRSP from the exact same dealer.
The article then interviewed a few people who have purchased a vehicles this way, and they are totally happy, they have a warranty, got the new vehicle they want, and for less than their neighbour down the street (...who's dealer didn't do the Canadian scam).
Apparantley, this is happening a lot and the manufacturers are really getting pissed about it as they see it as their own dealers are hurting their profits. The manufacturers are looking for ways of "punishing" any of their dealers who do this.....
