Jul 29
Taking the Plunge! A local Purchase it is!
Yesterday I finally took the plunge and decided to buy my new Lexus RX 350 from my local dealer.
The following bullets explain my rational:
- As a Canadian citizen, I was being refused my right to purchase a new Lexus in the U.S., (I wonder what the Americans would do if the reverse was true! )
- In the case of a Canadian broker; a couple were able to find the car I wanted, but with brokerage and transportation fees the savings deteriorated quite significantly. They both admitted to me that because the dealer knew the car was going to go to Canada, he was not willing to offer any further discounts. (Remember as well that there appears to be a shortage of these cars right now) . One Canadian broker told me he could obtain a discount from his U.S. partner,, but them went about calling me a liar for telling the public that I had negotiated over a $5,000.00 discount from the Canadian dealer. He indicated that this is not possible and I should be “ashamed of myself for lying to the public” People like this we really want to stay away from!
- I contacted an American broker through the help of some of my friends out West, this deal was a bit more attractive but again the savings were not significant enough for me exercise this option.
- Remember, I wanted a new car, not used.
- My local dealer found the car I wanted and was prepared to trade with another dealer in Quebec. The car would be ready for me on Monday!
- Another major factor was the re-sale value. Most Brokers and dealers tell me that when selling a
- Finally, I asked the dealer to install a hitch. It advertised on the Canadian site for $855 plus tax and on the
So in summary the difference , by my calculations and estimations was $3,500 and not enough to justify a buy in the 
July 30th, 2011 at 3:24 pm
Nice purchase Bob and nice negotiations - you would never have so much a discount if it hadn’t been for the US pricing knowledge and option. JOb well done and the dealer also did his job. He sold you in Canada for a win-win.
August 3rd, 2011 at 8:50 am
Thank you for the report! Great job! Speaks volumes about due diligence! Enjoy the new vehicle!
August 6th, 2011 at 9:46 pm
Enjoy indeed, Bob.
You mention that most brokers and dealers warn against the purchase of vehicles in the US because of lower resale value in Canada. I’ve heard this before, and always from someone in the car business in Canada. I’d really like to see some proof that this is a disincentive for purchasing in the US.
Firstly, it would be silly to buy a vehicle (available in both countries) in the US unless the price differential is “substantial”. (each person will have their own view of substantial). Let’s assume a car that cost 50k in Canada cost 40k in the US and that it will be kept for 5-7 years before being sold in Canada. Let’s further assume 60% depreciation in that time. The Can vehicle is listed for 20k (ie 30k loss). The US vehicle is listed for 16k (ie 24k loss). So, the US vehicle is listed for less than the Can one, but the owner is still ahead of the game if it sells. Even if it were sold for 12k (70% depreciation), the owner of the US car is still ahead. And I would think 12k would be very competitive in a market where the same vehicle is listed for 20k. Bottom line, you don’t need to sell a US car for the same price as a Can car to be in the black.
Secondly, when I visit used car dealerships in Canada, why is it that at least a third of the vehicles for sale are “US” vehicles. Are dealerships not trying to play both sides of the fence?
Finally, if push comes to shove, you can always take the car back to the US to sell - something that you can’t do with a Can spec vehicle.
August 9th, 2011 at 9:05 am
Thanks for the feedback! And yes resale value should not be taken as asignificant deterrant, but in fairness to all our members and followers I thought I would include it. Dollar is down to almost par and falling fast as investors worldwide panic…. what goes down goes up… and vice-versa.. not a time to panic!
August 12th, 2011 at 8:58 am
Bob, congratulation for the new car !
Very good analysis from PJ concerning the resale value. I think this is just another tactic used by dealers to scare consumers. They have tried before with propaganda such as components (alternator, air conditionning, etc..) are differents in a car built for US market.
I finally purchased a brand new 2011 Honda Odyssey EX-L from US in April, below are the pricing in details. Please note that the EX-L in Canada comes with DVD, in the US is an option in which we don’t need as my children already have their portable DVD.
As for the pricing, I went to 3 dealers in Montreal area, they were not in mood for any negociation and above all some of the sale guys are arrogance ! They all want me to leave a deposit because color-trims are not available, delivery is 6-8 weeks.
On the opposite side, US dealers are all pretty nice, very quick to response. All my negociation are done through internet (email). I made the initial deposit with my Visa card, then my relative take over for the delivery. In the process, I also checked the Toyota Highlander Limited and the Acura MDX Tech. The difference in pricing are between $11K to $14K. I noticed the price in US is well below the MSRP. Hope this help to other cross border shoppers.
USA USA Paid CAN
MSRP 34725 30947.00 40990.00 MSRP
Destination Fee 810.00 100.00 A/C Tax
Processing Fee 100.00 1590.00 Transport & PDI
Tax 3.12% 993.94 2134.00 GST 5%
Sub-total 32850.94 3809.19 PST 8.5%
Tag + Registration 109.00
Out the door price (FINAL) 32959.94
Conversion rate 1Can=1,03US 31971.14
Air Conditionning 100.00
GST 5% 1598.56
PST 8.5% 2853.42
RIV 220.35
Quebec inspection 87.00
TOTAL 36830.47 48623.19