Buying a car in the U.S.
(updated Nov-2010)The Canadian dollar reached par with the U.S. dollar in late September, 2007 for the first time in over 30 years. This touched off a whirlwind of changes in the pricing of new and used cars in Canada, which has never been seen before.In the following weeks and months, seemingly never ending media stories of how low new car prices were in the U.S., caused Canadian new car sales to drop, as many consumers either delayed their purchase or bought new cars in the U.S.
Most car companies reacted quickly by offering new cash rebates and or attractive low interest loan and lease rates in an effort to drive traffic back into quiet showrooms. This caused great confusion in the marketplace as consumers scrambled to try to figure it all out.
At CarCostCanada, our customer service department spent most of their days answering questions about buying cars in the U.S. and our data department scrambled to keep up to the ever changing prices, rebates and interest rate offers as the car companies changed their programs dramatically three to four times more often than normal.
Now that things have settled down and the U.S. question is rarely asked, as Canadian consumers, are we better off today than we were last fall? Absolutely!
In most cases new cars in the U.S. are still less expensive than they are in Canada, but the gap has narrowed very significantly. In the fall, with a Canadian dollar worth more than the U.S. dollar, it was common to see Canadian prices on similarly equipped vehicles 20%-25% higher than in the U.S., even after factoring the cost of getting one home.
Today the story is quite different. Now that the Canadian dollar is worth a little less than the U.S. dollar and car companies have either lowered their prices or increased their incentives, which effectively is the same thing, the gap has closed to a more reasonable average of 10%-15%. The gap is even smaller on many popular small cars after factoring in all costs of importation.
However, in many cases the new lower Canadian prices are not very easy to obtain, since most of the lower prices are not advertised. Some are, but many are not.
Lower new car prices have caused lower used car prices. With most car companies leasing 40%-50% of all new cars, they don't want used car prices to drop too much. So on the one hand they are prepared to lower new car prices to sell more, but if it’s too transparent, the used car prices on all of their lease returns will trigger huge losses. See 'Effect on leasing' below.
Therefore, in many cases they've left their new car Retail prices the same, while lowering their Wholesale prices to the dealer via secret factory to dealer rebates, to allow them to discount further than ever before. The problem is, if you know about these rebates, you’ll get them. If you don't, you may not get them.
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This is where a CarCostCanada membership really becomes valuable.
When you join for only $39.95 or $29.96 for CAA members, not only will you have full access to our proprietary database of dealer wholesale invoice prices, you’ll also have access to all of the current secret factory cash rebates. We'll also help you find a good low-priced dealer and send you email alerts any time prices change on any vehicle in your Wholesale Invoice Price Reports history folder.
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To get your CarCostCanada Wholesale Invoice Price Reports click here
Still thinking of buying a car in the U.S.?
Before wasting too much time drooling over lower U.S. MSRP (Manufacturer Suggested Retail Prices), get a CarCostCanada Wholesale Invoice Price Report first to see how low you can actually buy a new car in Canada, after factoring in the deals you can get by being a CarCostCanada member. Then read the balance of this report.
As a general rule of thumb, most vehicles priced at less than $30,000 Canadian rarely make sense to buy in the U.S. and the more expensive the vehicle, the greater the potential savings.
The bottom-line is very simple. If the savings are big enough and the aggravation is small enough, it's worth it, otherwise it's not.
Since everyone's personal circumstances are different, please read carefully.
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Latest News!
Canadian prices now lower! Canadian car companies have recently announced very attractive cash rebates, low interest rate loans and leases, as well as numerous other incentives to help offset higher Canadian retail prices.
Many of the most attractive cash rebates are secret and therefore not advertised. However, as a CarCostCanada member you will have full access to ALL Factory Incentive Programs.
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