Thinking About Buying A Car?

I have committed to try and always accompany my blog with a recent picture taken in Nova Scotia. This is a sunset over the Eastern Shore last summer just after a cloud burst. Hard to imagine the beauty unless you can capture it in your mind's eye by 'being here', or in a camera lens.

Several months ago, I wrote the Chronicle Herald newspaper in Halifax a letter bemoaning the issues of automobile prices in Canada verses the USA. It was published. Certainly I had no real rite of authorship on the issue... I had used examples that were taken from the websites of Volvo and Honda corporations in Canada and the USA and confirmed through visits to the dealers in Halifax and calls to the USA.

Savings on Honda Accord sedans and Volvo V70 station wagons were from $10,000 to $16,000... that was when the dollar was close to par. I suggested that it would be appropriate for Nova Scotians to just not buy new cars for several months, but to little avail... a report out last week indicated that less than 2% of new cars purchased by Canadians were in fact being bought in the USA. Little wonder the Canadian corporate offices of the automobile companies and their dealers are holding list prices high... buyer beware!

So where am I going with this issue... frankly I believe it is representative of much that is not working well in our province. We are too accepting of the status quo, we don't think anything can change, so we trudge along through life. We are so wrong! These things can change.

We live in a democratic, capitalist society where we can bring about change. We need to have a strategy and be persistent over time in order to change our lot here in Nova Scotia. We have to decide to stand up and say we can do this better. In the case of large capital purchases and general cost of living, we can tell our suppliers to become more efficient and accept lower margins with more vertical integration of the supply chain from source to consumer.

We can force the issue by acting like informed consumers on some products to show our will to change the status quo. We can shine the light of knowledge on product value and pricing so our fellow Nova Scotians will buy from the best source, the most effective product... rewarding the effective distributor with higher sales, and forcing inefficient businesses to either get better, or get out!

An example of this type of consumer activism would be to choose not to buy cars from dealers that will not match prices in the USA for vehicles they are selling. None of us 'has to buy' a new car this week/month and year... we can get along, or buy a good used car. If we refuse to buy, even with the insulting minimal rebates being offered, we can win.

But this would have to be a complete change in our attitudes. For example, we ourselves would have to not buy that new car. We would also have to discourage others from buying, to the point where we frowned on them for doing so. I am suggesting that we just don't buy any car... I am not suggesting we should go to the USA to get a better deal! We don't need to do that and we don't want to hurt our hometown dealers in the long run. We must send a message to the corporate offices of companies like GM, Honda, Ford, Toyota, BMW and so on that we are fed-up and we are not going to take it anymore. In a capitalist society, we will see them crack and over time they will respond... but we need to be persistently patient!

This week I visited the websites of the companies mentioned in the previous paragraphs. Each has a separate site for their American and Canadian businesses, they are not even linked. The average disparity between the prices of these companies on each side of the boarder, including delivery and prep was 27.4%. This enormous differential, when the Canadian Loonie has been at or close to par with the Buck. This is practically criminal! If it were not for the fact that we have a free market entrepreneurial society, it would be. The perpetrators get away with this heist because we let them!

At this time, there is another serious issue that is working against the consumer. General Motors is purported to be threatening dealers on the American side that if they knowingly sell a new vehicle to a Canadian, they could loose their franchise. This should be looked upon by the authorities relative to the US/Canadian Auto Pact and the rules of NAFTA. I do not support buying vehicles in the USA, because the root cause of the issue is that the Canadian buyers are too focused on the material thing, not its value. We need to learn to hold out for better prices so that our dealers here can negotiate with the corporate offices for better dealer pricing… and so that they can survive so we can have good service on the vehicles we purchase.

I repeat that it is worth not buying anything until next July… what we have today will do us just fine. Let’s change the way we do business.

Automobile Price Comparisons From American and Canadian Websites
Prices Include Advertised Discounts and Dealer Destination Prep
Prices Could/Would Be Negotiated At Time Of Sale
Manufacturer	Model and Description			Canada	America	Difference	%
Honda	Accord EX V6			33080	24494	8586	35
Honda	Ridgeline Pickup LX/TX			37360	29135	8225	28.2
Volvo (Ford)	V 70 Station Wagon FWD			43610	33210	10400	31.3
Volvo (Ford)	S 40 4 Door Sedan, 5 Speed			33110	25110	8000	31.9
Toyota	Corolla CE			15785	14405	1380	9.6
Toyota	Avalon XLS			41840	31375	10465	33.4
Toyota	Tundra Reg Cab DLX 4.75AT			25255	22290	2965	13.3
GM Chevrolet	Impala LS ILS			26945	19550	7395	37.8
GM Chevrolet	Tahoe LS ILS 4 x 4			50505	37045	13460	36.3
GM Chevrolet	Avalanche LS ILS 4 x 4			44565	34810	9755	28
Ford Motor Co	Taurus Limited FWD			36299	26980	9319	34.5
Ford Motor Co	Explorer Limited V8 4WD			52549	35570	16979	47.7
Ford Motor Co	F150 FX4 Reg Cab			33390	30820	2570	8.3
Ford Motor Co	Ranger XL			14849	13655	1194	8.7