Pro hockey: great game, bad business

Car buyers make a run for the border

COLIN CAMPBELL November 26 2007
Pro hockey: great game, bad business

Car buyers make a run for the border

COLIN CAMPBELL November 26 2007

Car buyers make a run for the border

COLIN CAMPBELL

As the U.S. dollar continues to stumble along, deals for Canadian shoppers are becoming more and more alluring, and nowhere is this more evident than in cross-border car sales.

Over the past month, many car manufacturers have gone to great lengths to try to stop Canadians from taking advantage of the huge discrepancies in car prices between the two countries. Companies like General Motors and Honda have told their U.S. dealers that they are not allowed to sell to Canadians or Canadian auto brokers. Others, like Chrysler, have said they won’t honour warranties on U.S. cars that end up in Canada. The restrictions have already prompted one lawsuit by disgruntled shoppers.

But in the meantime, none of this has actually stopped brokers from importing U.S. cars into Canada and selling them to legions of ready buyers. One company, Toronto Auto Brokers, circumvents the prohibition by working through a U.S. partner, which buys the cars from American dealers, then passes , them on to Canada. Toronto Auto Brokers actually specializes in car exports, but demand is so high for U.S. cars nowadays that it has moved into importing, too, says sales manager Avi Zur. “There’s a lot of people doing this,” says Zur, who adds that he now gets about 35 calls a week on the subject.

While there are plenty of good bargains, the best deals are in new luxury cars, like the Lexus RX350, says Zur. In Canada, the SUV sells for $52,000, compared to $37,000 in the United States—a difference of $15,000. On top of this, because the RX350 is actually manufactured in Canada, under NAFTA rules there’s no duty. Consumers only pay about $1,000 to the broker to navigate all the bureaucratic, cross-border paperwork.

With deals like that, the only thing that will deter Canadians from buying U.S. cars is fairer pricing from the automakers. M