From the Desk of Mike (The Hammer) Garvin

Car buyers just want the truth

Howard Elliott
The Hamilton Spectator

We've said in this space before that we are not fans of cross-border shopping, due to the negative effect it has on our already struggling business sectors. That said, there are times when consumers can't be blamed for crossing the border to get a much better price, on items as diverse as musical instruments, home furnishings, home electronics, and the granddaddy of all big ticket purchases, a new car.

Who wouldn't cross the border to save between $5,000 and $15,000 on a new vehicle? Even those annoying border backlogs are worth putting up with to save that kind of money. Automakers, domestic and international, defend the lower price of vehicles sold in the U.S., claiming that different regulatory standards, such as daytime running lights and bumper safety regulations, drive up the cost of new vehicles here. There may be some truth to that, but given the size of the price gulf, there's got to be more to the story.

Consider some specific examples. According to the Automall Network, a professional vehicle buying service, a 2007 Honda Odyssey costs $11,500 more in Canada than the U.S. and a Toyota Camry is $11,000 more. Although the difference is more exaggerated with higher-priced vehicles, it's apparent even in cheaper models -- a Chevrolet Malibu is $6,000 more.

Most Canadian buyers aren't buying the lame excuses offered up by automakers. Instead, they're listening to voices such as the Consumers' Association of Canada, which is openly counselling Canadians that "they should look after themselves first" and shop in the U.S. where appropriate, says association president Bruce Cran.

One Victoria-based website urges Canadians "to take advantage of the strong Canadian dollar by importing your next car from the United States."

A $2-billion class-action suit, launched in September on behalf of four Toronto-area residents, claims the auto industry has conspired to maintain higher prices in Canada. It alleges the industry is trying to inhibit cross-border buying with rules forbidding their U.S. dealers to sell cars for export, or that render warranties invalid for exported vehicles.

These are just some examples of angry consumers turning their frustration into action, and it's bad news for Canada's automobile retailers, who are already struggling with some of the toughest times in recent memory.

There's a simple solution. If indeed there is justification for higher Canadian prices, then prove it, document it and post the proof on every new vehicle. Otherwise, the manufacturers should wholesale new vehicles to Canadian car dealers at a legitimate price, and enable them to compete fairly. Domestic automakers especially ought to do this. They don't need further damage to their already dented credibility.
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