Canadian couple challenges denials of new car purchase in U.S.
A compliant with the Maine Human Rights Commission could blossom into a class action lawsuit.
(10/22/2007)
DealersEdge Daily Headlines for October 23, 2007
Since the Canadian dollar reached parity with its U.S. counterpart a few weeks ago, numerous stories have appeared describing the huge savings available to Canadians who buy cars in the United States. But is it that easy?
A Canadian couple who say they were turned down dozens of times when they tried to buy a new car in the United States is now challenging what they regard as illegal discrimination, according to the Bangor Daily News.
The couple from Newfoundland claims that more than 80 New England dealerships, including 61 in Maine, refused their business.
The couple filed a discrimination complaint with the Maine Human Rights Commission and plan to sue car companies. Similar complaints are planned in New Hampshire and Massachusetts, according to the couple's lawyer. A class action lawsuit is reportedly in the works.
The complaint alleges that General Motors, Ford and Chrysler were seeking to maximize profits by not allowing Canadians to take advantage of their strong dollar and buy new cars in the U.S.
"Individual dealerships claim they are not allowed or that it is illegal to sell to Canadians. But this would appear to be a patent violation of state and federal anti-discrimination laws, as well as federal anti-competition statutes," the couple's lawyer said.
The Canadian couple claim to have visited most of the dealerships and e-mailed some of them in the last two months.
In many cases, sales staff only became aware of the manufacturer's rule against selling to Canadians when they tried to go forward with a transaction. The compliant indicates that dealers were permitted to sell the couple only used vehicles.
Savings can be significant. A $40,000 Cadillac Escalade in the U.S. now fetches about $80,000 in Canada.
The couple finally did buy a car, a 2008 Pontiac Torrent. A relative purchased it for them at a local dealership and then re-sold it to the couple.
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Comments:
Monday, October 22, 2007 3:33:46 PM by Anonymous
Would the Canadians accept us making money on purchases from Canada? I think NOT.
Monday, October 22, 2007 3:49:16 PM by Anonymous
Sounds like a real hoser, eh.
Monday, October 22, 2007 4:29:00 PM by Anonymous
I think that the only ones affected by allowing these purchases to happen are the Canadian dealerships that will see their sales if US allows Canadian Citizens to purchase vehicles in the US. But then again, US Citizens would probably try the same if the shoe was in the other foot.
Monday, October 22, 2007 7:09:47 PM by Anonymous
The factories need to be clear in their rules, review their legality, and defend and indemnify any dealerships which get sued while complying. Dealerships could run additional risks fo fraud-related theft if this market opens up in such a fashion, without controls.
Monday, October 22, 2007 8:05:17 PM by Anonymous
Why would a canadian be able to sue in federal court anyway. They are not citizens and should not be afforded the same rights. They are guests and should respect our decisions regarding sales. If they have an issue they should sue in their own country for the disparity in prices and not take up our time and resources.
Monday, October 22, 2007 8:47:34 PM by Anonymous
I believe the federal vehicle standards are different in Canada and US vehicles do necessarily meet them
Monday, October 22, 2007 11:35:15 PM by harkul
Yes, this is a dilemma of sorts. But at the root of it is, just plain envy. The US was set up and is set up, to distribute and sell cars in a certain way. They do it. Other countries do the same. The only commercial/political ammo they have is not trying to stop buying of vehicles, but registering them. This way, the governments are able to stop the inflow of cars from other parts of the world because they are cheaper, or whatever. The same of course is true in reverse. And I think this is enough for sure.
So, if I travel to another country, and find something I like, first of all, there should be absolutely no restrictions on whether I can buy it or not, but it is my responsibility to know or to find out, can I bring this purchase into my own country are what are the consequences.
So, as americans, it is not our problem and should not be my problem to worry about the canadians or any other -dians- when they come strolling in to my store to buy things. If they pay for their purchase just like the rest, then as far as I am concerned, they are equal in my eyes as far as that transaction is concerned. What are you going to do next, not sell them ice cream because it is lot cheaper over here than in Canada? Please.
No, all of you envy folks, work on getting the government to do the right things for this country, not worrying about the canadiens. Dont you think you got enough on your plate right now, I dont think you need to add the canadiens on your list as well.
"Would the Canadians accept us making money on purchases from Canada? I think NOT. "
Well, I do not know where have you been lately? US buyers have been flocking to Canada for years and years, doing exactly the same thing. Also, dont forget the prescription drugs. Now that the situation has turned around, you cant take it. So, I would suggest, to those commentators here, take a good look at the mirror, what do you see?
Tuesday, October 23, 2007 9:19:52 AM by Anonymous
Actually the issue is with the manufacturers not the governments for once. Just a few years ago the exchange rate was in an opposite position and it was a bargain for U.S. purchasers to drive across the border and buy the same product. Warranty coverage was restricted and the flow was stopped. Nothing like having North American Free Trade is there?????
Tuesday, October 23, 2007 3:54:19 PM by Anonymous
I wonder about the availability of a $40000 new Escalade AWD (the only model available in Canada), from what I can see a new escalade in US is at least $60000 plus options. $40000 savings, please? This writer is an idiot, should he not check his facts? Another thing he fails to mention is the cost of borrowing and other incentives available to the buying public in Canada, the factory provides subvented interest rates and cash to dealer, financing is not available from us lenders for Canadian citizens. There is also a enviro levy of up to $2000 (up to $000 on some vehicles) payable on any imported escalade. I understand that dealers in the us are charging Canadians local state taxes as well as gas guzzler taxes, not to mention time, travel and accomidations, I wonder how much lost income these people incurred while they shopped every dealer in Maine? The cost of borrowing money has a cost (even if you have cash it still has an amortized value unless you keep it in a shoe box) the torrent that they spent all this time and effort buying has an offer of 0% interest for 60 months in Canada, what value does that have on the average $20 - $30000 vehicle? The price on a base model 2007 Torrent in Canada as advertised is $26,248 including delivery, and in Maine it is $21,970 plus $615 delivery($22,585). If taxes payable are calculated and added on the "lower" US price the interest rate would only have to be 5.75% on the money borrowed and any price advantage would be completely wiped out for a Canadian shopping south of the border. When doing a price comparison there are a number of factors to take into account, be fair about the real costs, for the average buyer of mainstream vehicles these "huge" saving promises are just not as real as they would like to believe. I'm sure that many people make the decision to go south shopping based on articles like this.
Wednesday, October 24, 2007 8:28:05 AM by RPM George
Why not sell? Let the Customer take it up with their State or Contry where the Car is supposed to be registered. Canada has his own registration and import rules just like the US. For one I know that Airbags and safety labels have to be in French and English. So, let them pay for the additional Cost to "convert" to there Market. this was done ages ago with the Grey market Euro Cars. However, if the Manufacturer believes there is some Franchise infringement, Canadian Dealers should take it up with their Justice Departement to envoke a import tax, which I guess they already have, to level the playing field for there businesses. If I am not mistaken there is usually a reason for products to be less expensive in another market. Most often it has to do with transport, Import Taxes and other governmental regulations. You can fly to Germany and Buy a brand new MB or BMW from the Manufacturer, its fitted for the Market you designate. Now the equivalent mode from a German dealer is up to 40% less in Purchase price. But yet it is not compliant with the US market. The same is true for most of the Asian Markets, Japan for example has a disposal Tax which prevents older Cars from being repaired. So, I guess What I am saying is let each contry deal with their own "Import regulation" and sell to who ever wants to spend their money at our stores.
Wednesday, October 24, 2007 9:20:44 AM by Anonymous
When the Canadian dollar was much lower then the US, the manufacturers had put penalties on Canadan dealers that sold to exporters for shipment to the US. This was done to protect the their US dealers. Perhaps it is time for that to happen again on reverse.
Wednesday, October 24, 2007 11:30:11 AM by Anonymous
In a few months the Canadians will be able to come to New York, get a drivers license and vote, why not get a deal on a new Cadillac. After all, it is the American way!
Wednesday, October 24, 2007 11:57:10 AM by Anonymous
I can't believe some of these comments.... were you hiding in a hole when the dollar difference was skewed the other way? There were many Americans coming to Canada to buy new vehicles and save money, and the dealers in the US were crying foul. The OEM's had rules to protect the US dealers just as they have rules in place to protect the Canadian dealers crying foul now. This isn't anything new or envy.... this is an old problem that has reversed. Free trade makes it all legal and do you want your government telling you what you can or can't buy? The OEM's are the only ones that can take this on. And if they get sued over discrimination, then good for them! They've been sticking their heads in the sand over this anyways, the pricing difference needs to be addressed anyways. If the consumers demand the pricing be in pair, then they'll just have to be prepared to pay for fluctuations in the currencies. A vehiclce built in Canada and sold in both Canada and the US doesn't have a different cost, just as if it's built in th US and sold in both countires, it cost what it cost to produce, plain and simple. It's hard to convince me otherwise that the costs differ. Sure, there are incentive differences, but the OEM's control them anyways. This isn't just a new problem either, the exchange rate interferes with the values of used as well
Wednesday, October 24, 2007 8:54:31 PM by Anonymous
First I do believe that the manufacturers have to do something to closer equalize VALUE between the two countries, probably some sort of finance incentive, rebate, or dealer incentive to ensure that Canadian deales are not killed in the process. However there is not a 50% difference in price between the two countries. Who ever wrote this article and said this is a sensationalist or stupid, you chose.
However the fact is that manufacturers have manufacturing costs that have different timing in it as well, transfer pricing so to speak, so ping prices on existing inventories on dealer lots for Canadians based on today's dollar may be a bad economic decision for them. Once the present manufactured goods are through the system & the dealers , they may have more interest in playing. That by the way should be soon shouldn't it? In the interim the US dealers should try to protect their northern Brethern as the Northern Brethern attempted to protect them for years when it was cheaper ot buy a car in Canada than the USA.
My opinion on the class action lawsuits is that this simply typical Lawyers trying to grab 30% of something, they are PARASITES of American society these days and should be dealt with by the legal system too.
By the way, the comments by the individual named "harhul" are embarrassing, all out of country readers please do not consider his attitude reflective of the American public, we are all proud of our country but we all have stupid people. He doesn't seem to understand why the Canadian dollar is increasing substantially against the US dollar. Its simple economics, Canada has balanced budgets (in fact surpluses), and health care, full coverage of its future resource needs. . .we could take a lesson here.
Canadians, thank you for being good neighbors, for sharing your vast supply of oil and for having an economy that it very tight to ours. Hope this pricing thing works out soon for dealers sake, as the dealers are the shock absorbers of the car industry & the manufacturers you represent need to understand that and act quickly to protect you!