Canadians take note about US bought cars

[red beast]

just found this a nasioc

 

New warranty agreement, not retroactive. Warranty coverage is now official, but... for Canadians who purchase in the US, warranty work must either be done in the US or, if done at a Canadian dealership, the customer must pay for the work and be reimbursed by SOA.

 

 

http://www.cars101.com/canada.html#warranty

[Gire]

Thanks. Looks like they have successfully made it much more of a pain in the ass to save over 10 thousand dollars on a new car.

[zmarko]

At least you can get reimbursed by SOA. Inconvenient, but at least it's not totally your expense.

[PhilT]

Considering you can save up to $15,000, then it's not going to put many people off.

[bosco]

Thanks. Looks like they have successfully made it much more of a pain in the ass to save over 10 thousand dollars on a new car.

 

why is there such a big difference in price? bosco

[edkwon]

why is there such a big difference in price? bosco

 

probably political nonsense that we'll never be privy to.

[Gire]

why is there such a big difference in price? bosco

 

Because we're idiots? I really don't know... but the performance sedan category is a 40 - 45K category here. Quite crowded with G35's, 3-Series, A4's etc.

 

This is what our market masses are willing to pay, and Subaru wants to position the Legacy right in the middle of it.

[bosco]

Because we're idiots? I really don't know... but the performance sedan category is a 40 - 45K category here. Quite crowded with G35's, 3-Series, A4's etc.

 

This is what our market masses are willing to pay, and Subaru wants to position the Legacy right in the middle of it.

 

the exchange rate today is $1.00 usd to $1.069 cd so the way i see it not counting frieght/taxes is $30k usd (what an LGT is here) to $32,070 cd or am i missing something? where is the $10k difference at? bosco

[PhilT]

A new Legacy GT here is C$41,000

[bosco]

A new Legacy GT here is C$41,000

 

ok i'll try one more time where is the big difference in price coming from? is it taxed by the Canadian government that high? where is the $10k? bosco

[PhilT]

ok i'll try one more time where is the big difference in price coming from? is it taxed by the Canadian government that high? where is the $10k? bosco

 

It goes into SoC's pocket.

[Vimy101]

why is there such a big difference in price? bosco

 

No doubt it's due to when the cars were sourced and the C$ was really low vs the US$. Now the loonie has come way up to 94 cents US from a low of 63ish only 2 or 3 years ago (it's more like the US$ has been devalued vs the world's major currencies).

[afici0nad0]

an old article, but, gives some thought into the causes for the large price differential...

 

Special Feature - Canada/U.S. vehicle price differences: why Canadians pay more

 

http://www.canadiandriver.com/articles/dd/canada-usa_price_differential.htm

 

Vehicle pricing is an issue fraught with difficulty for automakers selling into any world market. Success in every segment - even those featuring upscale vehicles - is strongly influenced by competitive pricing. In most years since 1999, we have performed an MSRP analysis comparing vehicle prices in Canada and the United States (adjusted for exchange rates), and this year's study has yielded some interesting results.

 

The subject of pricing is especially pertinent in Canada because of this country's proximity to the United States. Unlike in other international vehicle markets - where major differences in economic, social, and regulatory environments require automakers to tailor their lineups to a specific country's needs - Canada's showrooms are filled with vehicles similar and in some cases identical to those available in the United States. Having the same products available in both markets makes it fairly easy to draw conclusions about pricing trends between the two countries.

 

Many manufacturers obfuscate the equivalency issue by offering alternative trim levels or options packages in Canada and the U.S., but our study takes those potential differences into account by comparing base models and/or fully-loaded versions. The definition of "base model" (or even "loaded" model) in each country can be very different, and this analysis does not take all of these differences into account. However, we think that it gets you into the ballpark. It's certainly close enough to understand price differentials between countries.

 

We started doing this analysis in 1999, when vehicles were generally cheaper in Canada than in the U.S. Due to a number of factors (e.g., lower average incomes, frugal consumers, devalued currency, etc.), prices generally tilted in favour of Canadian buyers. In 1999, the average Canadian market vehicle was $3,167 (Canadian dollars) less expensive than its U.S. counterpart (exchange rate adjusted). We believe automakers made a conscious effort to bring vehicles into the realm of affordability for a wider swath of the Canadian market (a practice that was less necessary for the U.S. market). True, this strategy limited per unit profitability, but there is little doubt that the surging new vehicle market of the early 2000s was at least partially aided by this cut-rate pricing - pricing that could not logically continue.

 

In recent years, however, the situation has changed enormously. Using an average of U.S. dollar exchange rates from January to June 2006, we have determined that the typical vehicle is $5,842 (17 percent) more expensive in Canada than in the United States.

 

To take this down to a more comprehensible level, consider the case of the Subaru Impreza WRX. In Canada, this sporty sedan lists for $35,495, while in the U.S., it bases at $24,995. Converted using the abovementioned exchange rate average, the U.S. price works out to $28,524 in Canadian currency. The Subaru WRX is 20 percent more expensive in Canada than in the U.S., the price differential effectively moving it from the upper end of the "Compact Sedan" category and into the meat of the "Small Luxury" market. A great number of other cars display similar social mobility when their Canadian and American prices are compared.

 

Contrary to our previous years' findings, only five 2006 models in the study (we did not price every vehicle) achieved the distinction of being more affordable in Canada than in the United States: the Pontiac Montana SV6, Toyota Corolla, Hyundai Elantra, Chrysler PT Cruiser Convertible, and Hyundai Accent. It appears that, to date, automakers have not adjusted their MSRPs to reflect our dollar's newfound strength, and Canadian vehicle buyers have not reaped the benefits resultant from a strong currency.

 

Why? First, prices this year are comparable to last year. Only the exchange has changed, not fundamental pricing. Second, stable pricing regimes are valued and have a lot of merit. Drop prices too quickly and consumers will just wait for the next price decrease. Third, the economy and the vehicle markets are strong and the OEM's can get away with these prices. Fourth, some OEMs purchase in their home market currencies and do not see any exchange rate advantage. Fifth, profits in the markets have been very lean for a long time and some of the exchange rate advantage is simply restoring profitability.

 

One issue that became apparent this year was that import nameplate automakers have adopted a radically different pricing structure compared to their GM/Ford/DaimlerChrysler-branded competitors. In past years, the vehicle pricing strategies employed by all manufacturers resulted in nearly-equal price differentials relative to each company's U.S. pricing matrix, but there has been a major swing towards import-nameplate profitability in 2006. The numbers speak volumes:

• 
  
• GM/Ford/DaimlerChrysler passenger cars average $4,332 over American MSRPs, whereas import nameplate cars average $7,939 over U.S. pricing.
  
• GM/Ford/DaimlerChrysler light trucks average $3,639 over American pricing, while import-nameplate trucks average an extra $6,432.

Clearly, this is an exchange rate issue. With the Canadian dollar commanding nearly $1.10 in the U.S. conversion (June, 2006) there has been a restoration of profitability at all levels of the Canadian vehicle distribution and retail sectors. Manufacturers, distributors, and dealers no longer need to operate at the low margins that were their hallmark of Canadian vehicle companies during the lean 1990s.

 

The flip side of this equation is that a greater amount of negotiating headroom exists on any given vehicle, so hardnosed consumers may be able to extract an extra bit of value from their vehicle purchases. This study would yield a different set of results if transaction prices (rather than unnegotiated MSRPs) were compared, since some companies have been very aggressive with incentives this year. We now know why: the exchange rate has given them the ability to be aggressive with incentives.

 

Going through the vehicle segments, some trends are brought to light. High volume vehicles have the most competitive cost structures, while lower volume models are the most likely to receive premium pricing - even if they are, in fact, medium-to-high volume products in the United States. Similarly, those vehicles purchased on a "needs basis" (e.g. Entry Level or Midsize/Family vehicles) generally have Canada-U.S. price differentials under 10 percent, whereas "aspirational" vehicles - even the relatively high-volume Small Luxury models - regularly carry Canadian price premiums between 15 and 25 percent.

 

Perhaps as a result of its recently (and publicly) adjusted pricing strategy, General Motors has the distinction of offering the greatest parity between Canadian and American vehicle prices. Outside the luxury segments, it was uncommon for any GM vehicle to carry a price premium greater than 5 percent. Even within the luxury segments, GM vehicles often populated the bottom of the price differential matrix.

Interestingly, GM is also the company that has lost the most market share in the past 12 months. One could interpret this as Canadians not recognizing GM's pricing advantage. We believe this is because consumers have come to expect a heavy discount from GM. When they didn't get it (even though GM's prices were competitive), they didn't purchase. This is a good example of the downside of incentives. How does any OEM get off this drug?

[theimmortal]

just found this a nasioc

 

New warranty agreement, not retroactive. Warranty coverage is now official, but... for Canadians who purchase in the US, warranty work must either be done in the US or, if done at a Canadian dealership, the customer must pay for the work and be reimbursed by SOA.

 

 

http://www.cars101.com/canada.html#warranty

 

How very nice of SOC to stick it to customers trying to save a huge amount on these cars by picking them up south of the border! I really must thank them for making potential buyers work to get warranty service.

 

You will notice that SOA doesn't make buyers of Canadian cars imported to the US pay for warranty service and get reimbursed later. Wonder why? Must be because no one is stupid enough to do this!

[fizxman]

Sorry folks, I can't help noticing that SoA and SoC are corporations. Corps live for money and pursue it with slightly more fervor than Dracula has for fresh blood.

 

The only way to combat this is for Canadian Subie customers to buy their cars from the US - all of 'em. SoC will be swamped with a) claims for reimbursement, and b) howling from local dealers who can't sell any cars. That's the only lever I can see to change this. They gouge us 'cause they can - and they can mostly 'cause we let 'em.

 

C'mon down south and visit the Yanks and buy a Subie while you're here. The cash you save will pay for a nice vacation, and you'll have a nice new car to do it in!

[Vimy101]

Another thing is that Subaru is generally recognized as a high quality car in the Great White North as opposed to the US where it is viewed as quirky, niche brand. This means that SOC feels it can charge a premium.

[Jon in CT]

Thanks. Looks like they have successfully made it much more of a pain in the ass to save over 10 thousand dollars on a new car.

Look at it this way. For 2008 models the Canadian dealer, once he determines the car is an SOA car, knows that he'll be paid promptly by the owner for all repairs performed and no longer has to worry about whether the repairs are covered by the terms and conditions of SOA's warranty. That means the Canadian dealer has zero incentive to refuse to repair the car because of modifications, abuse, neglect, accident, competition, etc.. For the Canadian dealer, it's a straight-forward repair order, not a warranty repair, and he no longer has any interest in determining WHY the parts broke because he knows he doesn't have to file a warranty claim which might be refused.

 

Stage 4+ and low compression in two cylinders? Get it fixed at the dealer and send repair order marked PAID to SOA.

 

Forgot to put oil in the engine during last oil change and spun a bearing? Get it fixed at the dealer and send repair order marked PAID to SOA.

 

Stripped a transmission gear at the drag strip? Get it fixed at the dealer and send repair order marked PAID to SOA.

 

Slid into a curb while taking a turn too fast? Get it fixed at the dealer and send repair order marked PAID to SOA.

[zhabodav]

Maybe we might be lucky, if all suby buyers purchase from the US and save money, then SCI will have to adjust prices.... maybe if its in anyway possible, if the redesign will be beautiful in 09, and by 09 they have adjusted their prices, maybe, just maybe, i can trade mine in...but thats almost as likely as Robert Deniro giving me all his money out of gratitude.... ******* canadian government

[Vimy101]

Maybe we might be lucky, if all suby buyers purchase from the US and save money, then SCI will have to adjust prices.... maybe if its in anyway possible, if the redesign will be beautiful in 09, and by 09 they have adjusted their prices, maybe, just maybe, i can trade mine in...but thats almost as likely as Robert Deniro giving me all his money out of gratitude.... ******* canadian government

 

Little of the price difference has anything to do with the the Canadian gov't except maybe the Canadian gov't running surplusses for years that have caused the C$ to appreciate vs the US$.

[castor]

Ditto to the PITA......just another way to throw a fu&k into CDN consumers planning to buy a USDM vehicle.

 

Now (theoretically) lets say you blow a turbo and all the other associated damage included on a new 08.

 

You deliver the 08 USDM car to a local CDN dealer and they fix the car....you will pay ( I'm assuming here) HUGE dollars for that kind of warranty repair. What is the processing time / turn around time for SOA in regards to refunding payment to the comsumer?

 

I can imagine somewhere at SOA some desk jockey bean counter saying, "Well, I dont think THAT is a warranty item" on some warranty items and then deny coverage or reimbursement. What is your recourse then? The customer "help" line??? BWAHAHAHAHA!

 

Really, why can't Subaru in general have a similiar warranty package as Ford / GM where you are covered anywhere in North America regardless of where the vehicle was purchased?

 

That new 335 BMW is looking better and better compared to the 08 CDN Spec B......albeit more $$$.

[Ovcoursitsilver]

Most repairs made under warranty have to be either pre-authorized by a Subaru TSB or directly by SoC before the dealer will start; they don't want to do the repair without being certain they will be reimbursed for it. The same thing could happen to the Canadian owner of a US-purchased Legacy. The dealer will jump at the opportunity to replace that transmission but SoA may say it wasn't necessary and refuse to reimburse it.

[theimmortal]

...for any repairs that you need to make!! It's sad but true.

 

Getting back to the reason why Subarus are more expensive; I personally believe that Subaru of Canada doesn't sell enough overall so they need to compensate by charging significantly more per vehicle in order to make things work.

[Vimy101]

^ There seems to be something that is absolutely fundamental missing from many posters' understanding of SoC's pricing. When the cars were ordered from the factory 2 or 3 years ago, the C$ was hugely devalued. This meant that SoC has to put out big bucks for a car built in the US and costed in US$. The C$ has appreciated but those unit dollars originally put out still have to be recouped.

[bosco]

^ There seems to be something that is absolutely fundamental missing from many posters' understanding of SoC's pricing. When the cars were ordered from the factory 2 or 3 years ago, the C$ was hugely devalued. This meant that SoC has to put out big bucks for a car built in the US and costed in US$. The C$ has appreciated but those unit dollars originally put out still have to be recouped.

 

$10k per car get real. btw explain how a dealer orders cars 2 to 3 years in advance not knowing what colors, options, or even models are available. bosco

[Vimy101]

^ The 08s start showing up in mid 07. Parts and materials are sourced and priced in 06.