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Canadian Car Buyers Are Geting Ripped Off
Friday, November 16, 2007
For anyone living in Canada looking to purchase a new automobile you know that every time you visit a car dealership you end up bending over.... So for weeks now I have been wanting to write a post about this. You see for years now I have questioned the pricing of Canadian dealerships. I had figured out that (even with the exchange rate) when the Canadian dollar wasn't as strong as it is now, I figured out that the cost of a new automobile in the United States was much less than that of it's Canadian counterpart. So about two years ago I began looking into the option of purchasing a Toyota Tacoma pickup truck in the US.

In fact, right around this time a friend of mine did actually purchase the exact truck that I was considering. Now keeping in mind that at the time, the Canadian dollar was trading at about 30 cents less than it is today. I asked my friend how much he saved on his brand new Toyota Tacoma... his response "...about $8,000". I almost fell over. I knew that we were getting ripped off by the Canadian auto dealerships, just not that bad.

Here's a more recent example. A couple of my uncle's were in need of new ATV's (Quads for those of us here in Canada). In fact there was 4 of them each looking to purchase a new TV. As the story goes, instead of purchasing them in Canada, the four of them went south of the border. How much was their savings you ask? Well after all was said and done, they each purchased an ATV for roughly $6700. The same exact item in Canada would have been closer to $10 - $11, 000. Between the four of them they saved approximately a staggering $13-$14K.

Check this out, a 2008 Toyota Tacoma 4WD in Seattle is listed at $24,243.00. In Kelowna, BC, Canada the same truck is listed at $34,195.00 for a difference of $9,952. OUCH!!! and this is just off of the list price not factoring in the current exchange.

Now I'm not the only one who has done comparisons on Toyota products as Gord Hotchkiss (my boss) had an excellent post about Canadian Car Buyers Calling BS on Higher Prices on his blog. As taken from Gord's post:

Just today, I went to Toyota's Canadian website (toyota.ca) to see what a fully loaded Prius would cost, delivered and ready to drive. The price tag came to just over $41,000. The exact same vehicle, just across the border in Spokane, Washington? $28,000. And remember, that's $41,000 Canadian. If we calculate at current exchange rates, that's $44, 300. Everytime we buy a vehicle, Canadian's are getting screwed, in this case, to the tune of over $16,000.

Now, thanks to the transparency of the web (it took me about 4 minutes to figure out the extent to which Toyota was screwing us) Canadians figured out pretty quickly that we were being had, which lead to a flurry of cross border shopping. Suddenly, vehicles were flying off the lot, headed north for the border. The manufacturer's answer? Certainly not to consider a pricing change. No, they forbid US dealers to sell to Canadians. Of course, in today's world, for every wall you put up, a dozen holes are quickly rammed through it. The auto brokership business is thriving, thank you.

Gord goes on to say:

Now, as a Canadian, that makes me furious. There's no excuse for it. The media have started to pick up on this and there is some pressure on the manufacturers, all of which have remained stonily silent. I suspect that if the reverse were true, and American's were being fleeced out of $16,000 everytime they buy a vehicle, they'd be a little more responsive. I did hear Buzz Hargrove, spokesman for the Canadian Auto Workers Union, say that this wasn't about pricing, it was about keeping jobs in Canada by supporting the Canadian auto industry. What? Like the Canadian auto industry is supporting us by giving us clear, fair and transparent pricing? Buzz, you have your head up your ass. This is about not treating customers like a bunch of stupid sheep. It's about doing the right thing and valuing us. And if you can't do that, you don't deserve your jobs. I want Canada to be able to compete in a fair and open market place, not by slipping a fast one past your neighbours.

By the way, this is not just about cars. We're paying more for pretty much everything. If you're in Canada, pick up a book and see the Canadian price, relative to the American price. We're paying about 40% more. A friend of mine actually had some US cash with him and tried convincing the seller to give him the US price if he paid in US cash. It didn't work.

As Gord mentioned in closing, the customer isn't ignorant. We know when we're being screwed. We've been screwed by the auto dealers for years. It really is time for a number of consumers to get their heads out of their asses. This really is disgusting when you think about it. How long will Canadians stand for it? My money is that they won't. Great post Gord.

By the way, for anyone looking to purchase a Toyota from say Seattle, WA visit this site.

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posted by Jody @ Friday, November 16, 2007  
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