Dollar level and new models make it possible
If Canadian consumers are interested in saving lots of money on new vehicle purchases, the economic conditions are ripe.
Our dollar has reached exchange rate levels with the American dollar that haven't been seen in decades, and the competitive situation for the auto companies in Canada is moving towards a critical state.
That is to say, new vehicles in Canada are now over-priced on the open market, while the auto companies continue to flood their showrooms with more and more product offerings. Too much high-priced product in pursuit of too few customers is a classic recipe for the creation of a buyers' market.
All Canadian consumers have to do to bring new vehicle prices down is simply stop buying until the panic sets in across the auto industry. The car companies were making money here when the Canadian dollar was worth 75 and 80 percent of the U.S. dollar, so most or even all of the extra value in the Canuck Buck in recent months should be pure profit for them.
If consumers really need or want new vehicles, they can simply buy them in the U.S., where they are increasingly less expensive than they are here as the exchange rate shifts. Bringing cars across the border from the U.S. may sound daunting, but it doesn't have to be difficult and/or risky if you put in some research time and find the right importer to help you. A good place to start is www.riv.ca, which is the official site for importing vehicles.
Right now, virtually every new vehicle on the market in Canada sells for less in the U.S. when you take the exchange rate into consideration, and the difference goes up dramatically the more expensive the model. If you're looking for a model between $65,000 to $80,000, for example, you could easily save over $10,000 or more by buying it in the U.S. The surcharge for Canadians on vehicles above $100,000 can be shocking.
But it's probably better to wait for the auto firms to re-adjust their prices in the Canadian market, to acknowledge the new exchange rate reality.
This would sound like wishful thinking if the Canadian market wasn't going ever deeper into a buyers' market with every new model launch. Right now every auto company in Canada is bringing out new models that they hope will earn them huge new sales increases in a market that is essentially flat, and that growth simply isn't happening.
Sure, some companies are earning a larger slice of the new car market by entering models in segments that are new for them, but they're not getting the sales increases they were looking for. A five percent annual increase is great, but not when you've been expecting a 50 or 100 percent sales increase, and that's pretty much what every firm doing business in Canada has been projecting for years.
That kind of ongoing failure to meet projections brings a lot of pressure to bear on auto company executives, and the pressure will only grow as more and more new choices show up and their sales fate is even more underwhelming. Eventually this will likely mean a rationalization of the auto industry here, with some firms giving up on Canada altogether or at least cutting back. But for a while they will be battling to attract consumer attention and save their careers, and that should mean lower prices.
The companies doing business here for a long time have been making lots of money from Canadian consumers (this applies most particularly to the Japanese firms), and as the dollar goes up they will be making even more money without changing the sticker prices on the products.
You have to wonder why the car companies feel they can get away with charging Canadians so much more for our new vehicles than they charge Americans.
But you have to wonder even more why Canadian consumers let them get away with it, especially in the current situation with too many cars seeking too few buyers. If enough Canadians just put off buying or leasing that new model for a couple of months, we can all watch new car prices tumble and/or incentives increase.
photo:Toyota Canada
If Canadian consumers are interested in saving lots of money on new vehicle purchases, the economic conditions are ripe.
Our dollar has reached exchange rate levels with the American dollar that haven't been seen in decades, and the competitive situation for the auto companies in Canada is moving towards a critical state.
That is to say, new vehicles in Canada are now over-priced on the open market, while the auto companies continue to flood their showrooms with more and more product offerings. Too much high-priced product in pursuit of too few customers is a classic recipe for the creation of a buyers' market.
All Canadian consumers have to do to bring new vehicle prices down is simply stop buying until the panic sets in across the auto industry. The car companies were making money here when the Canadian dollar was worth 75 and 80 percent of the U.S. dollar, so most or even all of the extra value in the Canuck Buck in recent months should be pure profit for them.
If consumers really need or want new vehicles, they can simply buy them in the U.S., where they are increasingly less expensive than they are here as the exchange rate shifts. Bringing cars across the border from the U.S. may sound daunting, but it doesn't have to be difficult and/or risky if you put in some research time and find the right importer to help you. A good place to start is www.riv.ca, which is the official site for importing vehicles.
Right now, virtually every new vehicle on the market in Canada sells for less in the U.S. when you take the exchange rate into consideration, and the difference goes up dramatically the more expensive the model. If you're looking for a model between $65,000 to $80,000, for example, you could easily save over $10,000 or more by buying it in the U.S. The surcharge for Canadians on vehicles above $100,000 can be shocking.
But it's probably better to wait for the auto firms to re-adjust their prices in the Canadian market, to acknowledge the new exchange rate reality.
This would sound like wishful thinking if the Canadian market wasn't going ever deeper into a buyers' market with every new model launch. Right now every auto company in Canada is bringing out new models that they hope will earn them huge new sales increases in a market that is essentially flat, and that growth simply isn't happening.
Sure, some companies are earning a larger slice of the new car market by entering models in segments that are new for them, but they're not getting the sales increases they were looking for. A five percent annual increase is great, but not when you've been expecting a 50 or 100 percent sales increase, and that's pretty much what every firm doing business in Canada has been projecting for years.
That kind of ongoing failure to meet projections brings a lot of pressure to bear on auto company executives, and the pressure will only grow as more and more new choices show up and their sales fate is even more underwhelming. Eventually this will likely mean a rationalization of the auto industry here, with some firms giving up on Canada altogether or at least cutting back. But for a while they will be battling to attract consumer attention and save their careers, and that should mean lower prices.
The companies doing business here for a long time have been making lots of money from Canadian consumers (this applies most particularly to the Japanese firms), and as the dollar goes up they will be making even more money without changing the sticker prices on the products.
You have to wonder why the car companies feel they can get away with charging Canadians so much more for our new vehicles than they charge Americans.
But you have to wonder even more why Canadian consumers let them get away with it, especially in the current situation with too many cars seeking too few buyers. If enough Canadians just put off buying or leasing that new model for a couple of months, we can all watch new car prices tumble and/or incentives increase.
photo:Toyota Canada