I am attempting to purchase a new car, and quite frankly the entire experience is leaving me with a very uncomfortable feeling.
Should I buy in the U.S. or should I buy in Canada? This would be a no-brainer if we were to just go over the financials. With our dollar at close to 1.06 U.S. today the stats below do not lie.
As you can see, buying in Canada is 10.0% more expensive and will cost me approximately $5,600.00 more. So what is the problem?
For a novice car buyer out to purchase their first vehicle this seems like an easy answer. But just let me go over a bit of the background on my buying adventure and review some of the show stoppers and roadblocks that have been set up by the Car Companies to encourage hard working Canadians to pay more than their American cousins.
Over six months ago I decided to buy a new car. My current car, a Dodge Caravan 2002 was still in relatively good working order. I had just recently purchased new tires and wheels in the U.S. at a 50% savings over the Canadian price. I knew though that the next repair would most likely be a major one. It was time.
At first I ventured to a few local car dealers looking at several different models and was told quite abruptly many times that I would be lucky to get more that $1000 as a trade in, despite the blue book value being over $2200. So I decided to sell the car myself on “LesPac”.
Two weeks ago the car was sold for $3250!
Walking home from the License bureau after selling my van, I ventured into a Lexus/Toyota dealership. Obtaining a salesman’s attention was aggravating; it was almost like they were doing me a favor by being there. Once I was finally granted the audience of a smooth talking salesperson we got down to the nitty-gritty and I was quickly discouraged from buying a new vehicle. The price seemed beyond what I wanted to pay, and when I mentioned that the car was several thousand dollars cheaper in the U.S., I was told but it is not the same car, and to “be careful because you will have problems”. The salesman then presented me with a “pre-programmed” presentation highlighting all the reasons why I should not buy in the U.S. Finally he told me that I will never find a dealer willing to sell me a new car. I was told “They will be punished by head office if they sell to Canadians”.
Of course the presentation was a lot of false / stretched statements. Some were outright lies.
That evening and the next day I called several dealerships in the U.S. wanting to purchase a new car. Each was ready to sell until my famous line came out: “so you are willing to sell to a Canadian, I will be there tomorrow with the cash!”. More often than not I was told they will not sell a new car to me , but I was encouraged to look at their stock of used 2010s with anywhere from 25 to 30k miles. Some salespersons suggested that I have an American relative buy the car!
Finally I called several Canadian car brokers, they all gave me the same message: the car companies forbid American dealers from selling new cars to Canadians! Each broker suggested that I buy a used car. One broker indicated that he might be able to find me one, but insisted that it was going to be real tough. He indicated that he was getting at least 4 requests a day, and that my best alternative was to buy a new Cadillac or Ford. He could save me thousands on those, but Lexus, Acura, Toyota and Honda were out of the question and were very tough to find.
I decided to try the local Lexus dealership again. This time I was introduced to a very sharp salesperson. He gave me the keys to a demo and insisted I take a test drive. Then he listened carefully to my needs and was extremely accommodating. I mentioned the difference in the price in Canada and the U.S. and negotiated a further $2000 dollar discount off of the initial price that he quoted. Once done, I was then told that the car I wanted was not in stock and that he would try a find one for me in the next couple of days, failing that we would go to the plant and have one for the second or third week of August.
My local salesperson called me yesterday, he found the car I was looking for in Quebec. It seems someone cancelled their order. I asked him to put a hold on it for me, and that I will call him tomorrow.
Shorly thereafter I received a call from my broker friend, he has located 2 cars of the type I wanted, but the American dealer is scared to sell it to him for fear of reprisals by head office. I told him to sweeten the pot and try again and hopefully get back to me today.
Decision time! Not sure what to do, but it looks like if I want a new car that I will be forced to buy it in Canada and pay $5,000.00 more.
Buying a car these days is like going to the dentist! But at least I was able to negotiate a further $2000.00 off the Canadian price. Of course if I buy the Car in Canada I was told the dealership will give me a dozen golf balls and a golf hat!
So in summary here are a couple of hints to follow when purchasing a car.
- make sure you check the prices in the U.S. for both new or used. Use the CarsWithoutBorders comparison format to understand what you are up against. (always make sure the car is on the acceptable RIV list)
- make sure you understand all the features and differences of the model of car you want. This can take a hour or so of your time but it is worth it. You will be able to readily debate the Canadian sales presentation on why it is better, but more expensive to buy in Canada.
- use your knowledge to negotiate a better discount or maybe obtain more features.
- consider the use of Canadian broker.
- if purchasing a used car in either Canada or the U.S., review the Carfax and consider purchasing an on site inspection.