AUTOMOBILES
Loonie has Canucks eyeing U.S. for cars

GREG KEENAN
AUTO INDUSTRY REPORTER

July 10, 2007

The surging dollar has sent a record number of Canadians looking for a new or used car bargain south of the border, says the North American Automobile Trade Association.

Canadians imported 112,826 vehicles from the U.S. last year, the first time more than 100,000 vehicles came north and a 50-per-cent increase on the number brought into Canada in 2005 - a dramatic reversal of what happened just five years ago when the dollar was hitting record lows. The dollar closed yesterday at 95.27 cents (U.S.), a slight decline from Friday's 30-year high of 95.33 cents.

In 2002, Americans imported 211,797 Canadian-purchased vehicles. That number plunged to just 9,496 last year.

Cross-border shopping for new vehicles is a huge can of worms for auto makers, many of which are defendants in a class-action suit that was filed in the U.S. in 2003. People filing that suit charged that manufacturers deliberately restricted the supply in the United States of what were then cheaper Canadian vehicles, which forced all Americans to pay more for cars and trucks.

A series of U.S. class-action suits has been consolidated in Maine.

Some companies refuse to honour warranties if people who bought vehicles south of the border try to get them serviced in Canada.

Among them is Chrysler Group, which reaffirmed yesterday that warranties apply only in the country of purchase. The price difference on new cars may not be as dramatic as consumers are being led to believe, said Ed Saenz, a spokesman for DaimlerChrysler Canada Inc.

Prices are set for specific markets and rebates and other forms of incentives are just some of the elements that affect the price of a vehicle, Mr. Saenz said. Furthermore, spokesman Kerri Stoakley of Ford Motor Co. of Canada Ltd. said the strong Canadian vehicle market indicates that Canadians are still buying vehicles in Canada.

But one Ford dealer maintained that "there's a lot of product coming north."

He has purchased new, heavy-duty F-550 pickup trucks and souped-up Mustang models that are in high demand. He has bought used Chevrolet Corvettes and other models he calls nearly new.

Canadians interested in buying cars in the U.S. can have dealers do it for them or do it themselves, said Brian Osler, president of the Richmond Hill, Ont.-based North American Automobile Trade Association, which represents dealers and brokers who engage in cross-border vehicle sales.

Those who do it themselves will pay the goods and services tax, an import duty of 6.1 per cent if the vehicle was manufactured outside North America and a provincial registration tax. They will be sent to a Canadian Tire Corp. Ltd. store for a $200 inspection to see if the car meets Canada's safety and emissions standards.

There must be metric markings on the speedometer, but it doesn't mean the speedometer must be replaced even though miles per hour are more prominent on vehicles manufactured in the U.S.

Cross-border car shopping: prices compared

Luxury model: BMW 331i sedan

Base price in Canada

$49,900, sport package: $2,500

Total before taxes, etc.

$52,500

Base price in United States

$38,900 (U.S.), sport package: $1,700

Total before taxes

$40,600

Price in Canadian dollars

( exchange rate of $1.05)

$42,630

Compact Model: Honda Civic DX

Base price in Canada

$16,980, automatic transmission: $1,200

Total before taxes and charges

$18,180

Base price in United States

$15,010, automatic transmission: $800

Total before taxes and charges

$15,810

Price in Canadian dollars

$16,600

Blue Ford Escape XLS with automatic transmission

Base price in Canada

$23,299

Total before taxes and charges

$23,299 (excludes Ford family price discount)

Base price in United States

$19,700

Price before taxes and charges

$19,700

Price in Canadian dollars

$20,685

Source: Company reports