TORONTO, Sept. 27 /CNW/ - Drive one hour to a border city and save
$10,000 - that's a huge incentive for consumers, and it is creating a lot of
friction between dealers and their clients. It isn't just luxury vehicles that
have a large price disparity. Everyday vehicle prices are almost as high.
Most research looks at advertised Canadian versus US prices. No
consideration is given to the final negotiated selling price differences. Here
are some actual selling price differences of everyday vehicles:
- 2007 Honda Odyssey is over $11,500 more in Canada than in the US
- 2007 Toyota Camry is over $11,000 more in Canada than in the US
- 2007 Chevrolet Malibu is over $6,000 more in Canada than in the US.
Dealers have a hard time justifying the reasons for the difference,
however their hands are tied as well. The vehicle costs to the dealer are
significantly higher in Canada and therefore must be passed on.
It is no wonder that Automall Network, a professional vehicle buying
service, has been receiving a number of Canadian inquiries looking for help
with cross-border vehicle shopping.
"Our mission is to help our clients solve their vehicle buying
challenges" says Viraf Baliwalla, President of Automall Network, "and $10,000
on the identical vehicle certainly qualifies as a major challenge. We agree
that consumers can save a great deal of money buying a US vehicle - if it is
done right. Otherwise, there are pitfalls that one will face".
Speaking to the Toronto Area Dealers' Association on this subject,
Baliwalla was told that a small percentage of consumers are savvy enough to do
this on their own, however most do not have the resources so it is not yet
affecting Canadian purchases.
"Expect that to change in the very near future" claims Baliwalla, who
predicted the downfall of the used car market when GM, Ford and Chrysler first
launched their employee price incentives to consumers two years ago. "We were
telling our clients to wait a few months and then buy used" says Baliwalla.
Sure enough, there was an inventory glut of used vehicles on the market within
2 months and nobody was buying. Prices of used cars plummeted.
When buying a US vehicle, here are some of the things Canadian buyers
- Vehicles acquired in the US have to pass a different set of standards
than in Canada. Some are not importable. Others have to be
"Canadianized" before they can be put on the road. Paperwork must also
be done properly before the vehicle gets to the border. Otherwise, you
could be the proud Canadian owner of a US vehicle that you can't bring
into the country.
- Dealer franchise agreements prohibit dealers from selling new vehicles
across borders, so it will be difficult to find a franchised US dealer
to buy from.
- Financing and leasing incentives wouldn't apply. Hence, one would have
to pay cash, use a line of credit or obtain financing from their local
bank. Most manufacturers in the US are also offering rebates for cash
purchases which further increases the savings.
- A trade-in cannot be used.
- Watch out for flood and accident damaged vehicles. Many states don't
have reporting requirements on such vehicles. Many such vehicles have
found their way back into the consumer marketplace after being written
off by the insurance company.
- Some manufacturers are not honouring the warranties on new vehicles,
however this is the least of your worries. Good third party warranties
are available that mimic manufacturer warranties at a reasonable
price. Automall Network offers their clients a coast to coast warranty
that is good in either the US or Canada. The beauty is that the owner
doesn't have to even go back to a franchised dealer to get service.
They can have repairs done at their favourite local garage.
"When you factor in the savings in the vehicle price, even paying for the
additional warranty still makes a lot of sense" says Baliwalla.
One more piece of advice Baliwalla provides is to buy a slightly used
vehicle instead of new. Warranty and dealer contract issues are typically on
brand new cars. If a vehicle is brought into the country as a used vehicle,
say after six months to a year on the road in the US, there won't be the same
issues. A further benefit is that someone else has taken the hit for
depreciation, thus further lowering the selling price and increasing the
savings by several thousand dollars.
"We definitely exist as a consumer advocate and advisor. We believe in
supporting the local economy and local dealers in each market. However we
serve our clients' needs first" adds Baliwalla.
Automall Network has launched a Fight for Fair Pricing campaign to
advocate for price parity. Consumers can sign up at www.AutomallNetwork.com.
Once they have collected enough names, their intention is to lobby the auto
manufacturers to reduce the differences, thus eliminating the temptation to
not shop locally.
Automall Network is a Professional Vehicle Buying Service, providing
independent expertise and assistance to the insurance industry and consumer
buyers for new and used vehicles. Automall Network services clients in both
Canada and the United States.
For further information:
For further information: Viraf Baliwalla at (416) 249-5474 x303, (866)
310-8701 x303 or email to firstname.lastname@example.org