• Sep 23rd 2007 at 2:04PM
  • 65

Due to the dollar's dip, one American greenback is worth the equivalent Canadian Loonie. At least, it's worth the same at the exchange window. However, it is not worth anywhere near the same amount at Canadian car dealerships, and at least one Canadian wants to know why.

Even though the two currencies are at parity, the difference in the prices of various cars ranges from $7,000 to $10,000. An Audi A4 Quattro with the turbo 2.0-liter is $32,000 in the US, but it'll set you back more than $40,000 in Canada. A $25,095 Taurus here will run you $33,399 in Canada. The discrepancy when it comes to Volvo is highest, with a 38-percent markup that equates to an $11,000 premium if you buy in Canada.

With those kinds of numbers, it's no surprise that Canadians are going south of the border to find a set of wheels. The blogger, Clever Shark, has written to automakers to find out why the land of the maple leaf has to pay so much, but he's not holding his breath for answers.

[Source: Clever Shark, photo by KAREN BLEIER/AFP/Getty]

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    • 1 Second Ago
      • 8 Years Ago
      I just purchased a Subaru in the US and imported it to Canada. There is no duty applicable since the vehicle is a NAFTA car assembled in Indiana.

      There is no reason why the same car in Canada is $23,000 more. It has nothing to do with taxes, duties or anything else. It's simple greed.

      The prices for most of the 2008s have not shown any dramatic decrease. In fact, many of them have gone up in price - which is totally absurd!

      Contrary to what people are saying, most cars require very little modifications. Typically he only real requirement is Daytime Running Lights which many cars now have as standard equipment.

      The riv.ca site indicates what each particular vehicle requires.

      Exports from the US into Canada are expected to go over 150,000 units this year.

      That's 10% of the Canadian new car market.

      • 4 Years Ago
      • 8 Years Ago
      It's probably best that I don't mention South Carolina's wacky $300 sales tax limit on all vehicles. D'oh! Too late...
      • 8 Years Ago
      I work in sales at a Hyundai dealership in Canada. I have lost 6 deals this month to people going to the states to buy. It makes it harder to sell cars, but I understand why people will travel to save. The govt better do something and fast.
      • 8 Years Ago
      • 8 Years Ago
      A $2-billion class action law suit has just been filed on behalf of Toronto consumers against major US and Canadian auto manufacturers for "artifically" enhancing the prices of automobiles in Canada.

      Link to article: "http://www.canada.com/nationalpost/financialpost/story.html?id=d6db47d3-ab3b-4e0b-bfe8-9c076c593bc2&k=57065"
      • 8 Years Ago
      Just a note to the poster; the Canadian dollar has made significant ground against the Euro and the Sterling too, so it's really not just the US dollar tanking that is contributing to the parity.
      • 8 Years Ago
      Maybe I should add a few notes here to help dispel some apparent confusion.

      1- No, cars aren't going to be repriced month-to-month. However the last time that a 38% markup could be considered representative of different currency values was in 2002, a full half-decade ago.
      2- I deliberately chose mostly imported cars for the comparison because they're made in neither the US nor Canada. The Ford Taurus was only added later as a curiosity.
      3- I have no idea where adamrobertg gets his $3k figure. Depending on where you buy your cars it will probably already have daylight running lights standard, pass emission requirements that are more stringent than the Canadian ones, and so the only major issue will be to have the gauges replaced. I don't think that costs $3000, although I suppose I could be wrong on that score.
        • 8 Years Ago
        But cars assembled outside the NAFTA zone are subject to U.S. or Canadian import duties. In your comparison of MSRPs, how do you account for the difference in the amount of the duty collected by the U.S. and Canada (assuming the difference is significant)?
        • 8 Years Ago
        you do NOT need to have gauges replaced when importing into canada. I live here and already looked into it. All gauges in the states have both MPH and KPH markings. The fact that KPH are smaller makes no difference. In most cases all you need to do is just add the daytime running lights, which would cost you probably around $200 for parts and labour to add the DRL module.
      • 8 Years Ago
      Also, I remember when the Canadian dollar was trading at about 66 cents to the American dollar (about 7 - 8 years ago). The Canadians were paying more CAD than the Americans were paying USD, but it worked out that the Canadians were getting a better deal, right up until around the 2005 or so when the dollar passed 80 cents (roughly, as people have researched discrepancies vary from one manufacturer to another.
      • 8 Years Ago
      A few car oriented shows and magazines have asked the question earlier this year.... most responses they got from companies were around the lines "exhcnage rate is only 1 of the factors and we're pricing our cars to remain competitive in the canadian market"....AKA... if that guy ain't lowering his prices, why the hell should I... you buy them anyway. A lot of Nissan and Chrysler dealers in border states have been found to refuse to sell to canadians due to pressures from the corporation.
      • 8 Years Ago
      Heres the car that gets my blood boiling!

      2007 Chevrolet Corvette Base MSRPs from GM Websites
      COUPE $45,075 US, $68,565 CDN = 52% more!
      CONV. $53,415 US, $80,665 CDN = 51% more!
      Z06 $70,000 US, $90,485 CDN = 29% more!

      Should Canadian Z06 buyers feel better for being 40% less ripped off? I doubt it...

      I wanted a Corvette next summer with profits from Currency Trading, but I think I will buy something else since I will still remember their current profiteering!!!
        • 8 Years Ago
        Doc Robot - yeah, that is a pretty huge difference. I would just buy it in the USA regardless of the exchange rate "gouging". Based on what you said... uh, you are profiteering off the exchange rate as well. Nothing wrong with that and good for you to be able to it.

        Hooper - I think that is bang on! There should be some large incentives or rebates to get the prices in line until they adjust them accordingly. I don't think we will ever get price parity though, but the automakers should be stepping it up in other ways.
      • 8 Years Ago
      uhhhh...lived there! Socialism. Tax is 15% in most provinces. U think companies want to give up their profit premiums. They'll ask the govt to subsidize before they'll reduce prices. Got out of there a few years ago when the wife decided social medicine had ruined her health. She is dying of heart failure at 38. Great system all-round
        • 8 Years Ago
        First off, Canada's health care isn't the best (that award goes to Europe) but it is better than the US (which actually ranks below many _second world_ nations in healths services, yet spends more than _Sweden_ per capita). Sure, the rich get care first, but the poor either get seen and go bankrupt, or die.

        Thanks, if it's all the same to you, I'll take the Canadian system.

        Second: this is gouging on the part of the manufacturers. The problem they face in lowering, though, is that they'd see a consumer revolt amongst those who bought the year or two prior. What should have happened is that manufacturers ought not to have raised MSRP as high (they did, under guise of currency fluctuations, but they got greedy) and eaten it. But this is the era of 30-day profit cycles, so we can't sit and wait for the market to change.

        They could have used PDI to offset this, but Canadian PDI fees are already stupidly high--even for cars like the Corolla and RX, which are friggin' built here.
        • 8 Years Ago
        I'd be willing to bet that the prices differences are due to:
        - Different import duty amounts - As an example, the AUS $ is really strong against the rest of the world at present but because we have about 62.5% worth of duties and taxes as soon as a car comes into the country, our car prices are still high. Plus if the price goes over $57K, a luxury car tax is imposed.
        - Cost of Canadianising the car, speedo and running lights...
        - And finally, the car makers only review their pricing against the exhange rates at most once per year. This is done to protect from falling values and to profit for increasing values. And from when the cars are purchased from the manufacturers to when they are sold off the lot can be as much as 3 months, the exchange rate is very volatile and can change a lot in 3 months.
        • 8 Years Ago
        Your name says it all...

        Socialism? We may be a bit more than the USA, but try and explain to me how that is a bad thing. Your government is not looking out for your best interest and the result is your dollar has fallen as much as it has in a very short period of time. The currency value of the USD is dropping because the world markets have been losing confidence in your country and its sliding economy. This is also why the price of gold has been climbing along with the rise in the strength of the Euro. The record debt levels your government is creating based on a war that should not have been along with allowing the outsourcing of your manufacturing base to the Chinese for pure profit are eating away at your ability to ever pay back the debt you are adding to every day. This has made the elite very rich while cutting out the middle income earners who actually buy and spend more than the rich as a whole. Throw in the tax cuts for the rich, the only people who are making money and can afford to and should be paying more taxes are the ones getting the breaks. I guess the theory is as it always has been, the rich get richer and rest get... Hey, I am all for making a good living and a profit, but too much greed is a bad thing. Can a government or country actually go bankrupt? I guess we will find out in the next year or so.

        As for sales taxes in Canada:
        Alberta 6%
        British Columbia 13%
        Saskatchewan 11%
        Manitoba 13%
        Ontario 14%
        Quebec 13.95%
        PEI 16.6%

        Clearly you have no idea what you are talking about in regards to our tax system. The manufacturers to not benefit from high taxes, the government does. We buy smaller cars on average, or maybe less options on more expensive cars as the tax eats away at our buying power. Less taxes would mean more options and the manufacturers would love that as would any consumer. I am sure they will have to adjust their numbers when pricing out the 2008 models, but I would no expect and drastic movement as our economy has been great and our retail auto sales have been on a tear this year.

        I am sorry to hear about your wife though. Our health care system is not the best, but everyone is covered. Unfortunately everyone has a different situation to deal with on a regional basis with average wait times, as well as the types of specialized facilities in each area. The only way to get moved up a list is having a more serious case than the others. Everyone pays and everyone is treated... eventually.
        • 8 Years Ago
        You'll have to do better then 15% socialism. We pay provincal & federal taxs and you do pay state and federal taxs. These taxs are above the gouging.
        • 8 Years Ago
        Ummm. Idiot much.

        I live there. Currency fluctuations are not immediately compensated for. The price of cars has nothing to do with universal health coverage.

        You can't blame the health system for giving you heart disease.
        • 8 Years Ago
        Re: Taxes
        Clever Shark writes, "[Y]ou do have to pay tax on the car plus some import fees, but if you’re buying an upscale vehicle you could potentially save many thousand dollars by shopping south of the border." So the higher VAT/sales tax/whatever in Canada doesn't account for all of the entire difference.
        • 8 Years Ago
        Whoops, I stand corrected. I thought Canada had something like the VAT in European countries that's included in the selling prices of goods sold there, but Toledo Guy and Judy Zik point out in their comments below that that is not the case in Canada.
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