• Sep 26th 2007 at 1:58PM
  • 64
A few days ago we posted on the price discrepancy between identical vehicles sold in the U.S. and Canada. The discrepancy was always there, but became apparent when the value of the Canadian Loonie reached parity with the U.S. dollar recently. It was then that consumers couldn't ignore the fact that they were paying more for vehicles than their U.S. neighbors, up to 38% in some cases.

The Toronto-based class-action lawsuit firm Juroviesky and Ricci is taking up the case and expected to file a $2 billion class-action suit on behalf of four Canadians who feel that they paid more for their cars than they would have in the U.S. The class-action suit is open to any Canadian consumer who bought a new vehicle between August, 2005 and August, 2007 when the Canadian dollar was rapidly appreciating, but the prices of Canadian cars weren't adjusting.

Thanks for the tip, SS3!

[Source: Canada.com, photo by KAREN BLEIER/AFP/Getty]

The fact that cars cost more in Canada is hardly new information, and many Canadians simply cross the border and buy their new cars in the U.S. The class-action lawsuit, however, also charges that automakers conspired to inhibit this practice by making consumers sign "no-export clauses" preventing them from returning to Canada with their cars, as well as refusing to perform warranty work on cars purchased in the United States. Even dealers have gotten caught up in the mix, with U.S. dealerships allegedly being penalized for selling cars that were later exported and Canadian dealers threatened with termination if they didn't comply with these practices.

The lawsuit also names the Canadian Automobile Dealers Association and the National Automobile Dealers Association in the U.S as defendants. Cases like this have been brought up before apparently, but have been long, drawn out affairs with little ultimate effect on the issue at hand. With the Loonie and US dollar at hovering around parity, however, the discrepancies are now shockingly apparent.

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    • 1 Second Ago
      • 8 Years Ago
      "...to file a $2 billion class-action suit on behalf of four Canadians who feel that they paid more for their cars than they would have in the U.S."

      Did they each pay $500,000,000 more than their car's value? I can understand suing to be compensated, but don't tell me you deserve any more than that. How do you ever argue that? Pain and suffering? Mental anguish?
        • 8 Years Ago
        Do you think anyone in here would give a rats ass if the lawsuit was of 25000$
        • 8 Years Ago
        It's a class action lawsuit... not a suit brought about by four plaintiffs.

        Even if you don't know what a class action suit is, the article did a pretty good job of explaining it. Did you read the article? This suit is to be shared by anyone wishing to opt in providing they purchased a new vehicle in Canada between 2005 and 2007.
      • 8 Years Ago
      The point is less about whether or not a car costs more or less in the United States, or Canada based on currency valuation. The USD has lost ground against most of the major currencies, Japanese Yen, Euro, British Pound. As a Canadian I shouldn't be questioning why we pay more for a car, note that if one does the math Europeans pay more for the same cars than we do, it is why auto makers have not increased prices in the United States. As US currency has hit rock bottom, cars not only cost less in the United States, the Big Three pretty much give them away while complaining about lagging sales, and overhead costs.
      • 8 Years Ago
      Classic international finance question. However, Price != Cost != Value. I used to mock americans all the time (okay, not used to, every chance I can get) because they didn't understand this. Now I get to mock Canadians too?
      • 8 Years Ago
      Will these lawyers give back their legal fees when the Canadian dollar drops and the prices are lower in Canada than the US? Or will they just sue south of the border.

      I'm all for consumer pressure, but do we really want every price in our society indexed to the greenback? Why not just switch to using it then?
      • 8 Years Ago
      Things always cost more in canada than they do in US near as I can tell the reason why they do that is because the sheer volume of cars that are sold in US is much higher.

      Additionally they can get away with it.
      • 8 Years Ago
      The lawsuit alleges automakers and dealers conspired to fix Canadian car prices 25-percent to 35-percent higher than U.S. prices, violating competition and consumer protection laws. The automakers will argue the higher prices are coincidental and driven by market forces, the same bull$hit the domestic oil cartel has slid past toothless government watchdogs for years. Cutthroat competition drives prices up!
      • 8 Years Ago
      If you think about it, yes it does stink that Canadians pay MORE for the same car they did a few months ago. However, the Canadian income hasn't decreased... In USD a Canadian that was making $50k Canadian was making $33k american with a $0.66 exchange. Now canadians are making $50k USD with the 1:1 ratio.

      Sure the value of these cars is not equal, but I am sure a lot of Canadian dealers have to pay extra for an import tax on the vehicles. The adjustments can't be made every day to go with the change in the currency.

      If anything comes of this (and I sure hope nothing does) then you can have any country that experiences a currency change sue all the automakers.
        • 8 Years Ago
        We typically earn less than our U.S. counterparts and get taxed a lot more (I work in the I.T. field). To top it off the only excuse the automakers used was that it was because they needed to make up the difference because the Canadian currency was weak. That excuse no longer applies. I think that while the prices won't be adjusted overnight, these lawsuits will put enough pressure on manufacturers to be fair as far as the price goes.
        • 8 Years Ago
        Well understandable, now that I have been informed. But truely, and as stated by other people earlier, anytime you're paying some price that's not the same in another country. I don't know exactly the taxes on imports, nor a direct relation to salarys. I was going off the base on UK salaries for engineers. Most were starting in the 35k pound range which back when it was 1.5:1 that was a reasonable ammount. Now that it's a 2:1 it's a significant ammount.

        But still, my point was that the whole picture isn't just the price of the car, which is what this lawsuit seems to be poking at. I do agree prices need to be more equal since the drastic change in the canadian/US dollar, but it all doesn't happen overnight. This lawsuit I could consider a "let's get rich quick" suit. I'm just surprised that one guy from jail who sues everybody with handwritten entries isn't the one filing this.
      • 8 Years Ago
      Buying a car in the States isn't that simple. The biggest problem that people will encounter is that they have to buy the car outright. They can't lease it. Most banks won't lend you the full amount for a 50K plus car.
      • 8 Years Ago
      I'm all for lower car prices here in C, but a class-action lawsuit seems a bit over the top. Does anyone know which manufacturers were imposing the "no export" clauses and which penalized dealers. I know Audi can't be one of them because I explored this avenue last year and spoke to a US dealership as well as Audi Canada about this. There was no problem from Audi's perspective. The US dealer did say that my future Canadian dealer might not be very curtius because I didn't buy it from them.

      Porsche announced that they will be dropping their prices around 5-8%. So someone is starting!
        • 8 Years Ago
        What some manufacturers have done is void the warranties on what's essentially the same product if you buy a car in the U.S. and import it to Canada. Driving television also did a segment where some dealers didn't want to sell the car when they found out it was destined for Canada. All in all it's pretty crappy when a car in Canada costs more after all the duties have been paid for a U.S. vehicle. It's even worse when the dollar is now at par.
      • 8 Years Ago
      • 8 Years Ago
      2002 Mazda 6??? This car wasn't introduced in Canada until the 2004 model year (available mid 2003). Please keep your comments realistic.

      The price of everything you purchase can not be adjusted every day based on currency values... if you are tired of getting ripped off in canadian dollars, buy some yank bucks and shop south of the border... problem solved.
      • 8 Years Ago
      It's not just cars either. Many products like such as books and magazines and CD's / DVD's carry a price discrepancy that has always been explained away by the difference in the currencies. That excuse no longer exists and now people are looking for accountability. Should be interesting.
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