Car Prices: People Power Making a Wheel Difference

It looks like there is so much cross-border car shopping that Canadian car dealers are starting to make efforts to win customers back (see CBC video report).

Since November 2007, reports had Honda Canada offering incentives on some Civic, Accord and Pilot models, ranging from $1,500 to $5,500 if you pay cash.

Used car prices in general in Canada are also dropping. That's because there has been a record number of imported vehicles from the U.S.

Canadians imported 24,873 vehicles in October alone - a 68 per cent jump over September's numbers and twice as many as in October 2006

The high number of used imports is creating a surplus of used cars for sale in Canada and hence driving down prices, at least on the mainland. It is still wise to compare U.S. prices before the big decision to buy from a Canadian dealer. See a couple of recent car price comparisons here.

Car Buyers Beware: Compare with U.S. Price First

Canadian car dealers are charging much more than U.S. dealers for same model vehicles. When the Canadian dollar is on par with the American dollar, or as it has been in recent weeks, even stronger, you can really compare apples to apples, or for the unfortunate souls described here, lemons to lemons.

Compare the 2008 Mitsubishi Eclipse Coupe GS for example:

5 speed manual transmission
Canadian Total Selling Price $ 27,493 (click GS for detailed view)	U.S. Total Selling Price $ 20,254
Save $ 7,239
Compare the Sunroof and Sound Option price
$ 3,300	$ 1,850
Save $ 1,450
Compare the Honda Accord Sedan
Can. Starting Price $ 25,090	U.S. Starting Price $ 20,360
Save $ 4,730

That's over $ 7,000 more to buy the Eclipse from a Canadian dealer, and
$ 4,730 more for the Civic Sedan in Canada. What gives? There is a discussion at the Ottawa Business Journal on this issue. The price difference is huge and can hurt sales for Canadian and local dealerships. They may want to consider better deals as people start comparing Canadian and U.S. prices. Nobody likes being gouged.