Will Canadian Car Prices Ever Match American Car Prices?

Rob Williams

Rob Williams

Editor-in-Chief
Staff member
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From our front-page news:
A posting at AutoBlog really caught my eye tonight, because I posted something similar in our forums a few months ago. As hard as it is to believe, the Canadian dollar is now worth more than the US dollar... something that has not happened in quite some time. Impressive, since the rate was 15% in the USD's favor just earlier this year.

Although such a thing benefits Canadians going to the US, it doesn't benefit them when it comes to buying a car. As always, buying a car in Canada carries a huge premium, even before taxes are included in the equation. For example, a Ford Taurus retails for $25,000 in the US, while Canucks are suckered into $33,000CAN. That's a small example though. Higher-end cars have even wider gaps, from +10% onward. Will Canuck car prices ever hit par with American prices? Being a Canadian.. I am hoping so.

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Even though the two currencies are at parity, the difference in the prices of various cars ranges from $7,000 to $10,000. An Audi A4 Quattro with the turbo 2.0-liter is $32,000 in the US, but it'll set you back more than $40,000 in Canada. A $25,095 Taurus here will run you $33,399 in Canada. The discrepancy when it comes to Volvo is highest, with a 38-percent markup that equates to an $11,000 premium if you buy in Canada.

 Source: AutoBlog
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To me, this goes far beyond just cars. Everything in Canada seems to be more expensive than in the US. Us Canucks can't complain too badly though, since places like the UK and AUS seem to have it worse. Of course, their average wage if far higher.

But, I digress. We finally got a Starbucks in this small town, so I went to pick up the usual for myself and a family member. What costs me $9.00 in the US, cost me $11.23 in Canadian. How the hell is that possible? I understand that the Canuck dollar just became worth more than the USD, but even last year the differences shouldn't have been that high.

Canadians get ripped off. That's all.
 
G

GameMasterNick

Coastermaker
All of my credit cards are Canadian...
I'm being paid in US funds...
This is not good.

As far as the price of cars, it's mainly set by the finance companies when dealing with import/export and they -never- use current market rates for forex (foreign exchange). I'll see if I can't talk my wife into posting here as she worked for GMAC Canada for 7 years before we moved to America and is much more knowledgable about these things than I am.

If Canada had more competing enterprises, i.e. wasn't buying Fords and Nissans, I think the market would even out a bit more. As is, Canada only has a few manufacturing divisions (and that number will go down if the US inflation rate keeps jumping) of the big names.

Everything is more expensive in Canada, and only part of it is that many prices were set 3+ years ago when the CAD hovered around .65-.85 per USD.

Edit: Is that picture a loonie teabagging the greenback?
 
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Rob Williams

Rob Williams

Editor-in-Chief
Staff member
Moderator
I am also paid in USD, so the conversions will hurt a little. I am just hoping that the conversion rate won't go down -that- much. Great for those traveling to the US, bad for those being paid in USD.

And to answer your question, yes, that is a loonie teabagging a greenback.
 
moon111

moon111

Coastermaker
GameMasterNick said:
(edit)
... If Canada had more competing enterprises, i.e. wasn't buying Fords and Nissans, I think the market would even out a bit more. As is, Canada only has a few manufacturing divisions (and that number will go down if the US inflation rate keeps jumping) of the big names.... (edit)
Click to expand...

I think Canada has the same amount of competition as the U.S. does. I don't think transportation costs should be a huge impact because we build more of our vehicles locally then the US does. (Ontario builds between 16-17% of all vehicles in North America. Michigan is second, followed by Ohio, Missouri, Kentucky, Indiana, Tennessee, Mexico, Illinois, and Georgia.) We've also got big automotive companies like Magna, Dana, Woodbridge Group, Wescast Industries and Linamar here. The only reason I see the prices still high is inventory was bought at a certain level, and dealers are all trying to make a profit off of that. Also, if they lower prices now, doen't this upset the guy who paid more in the past?
 
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