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Saturday, December 15, 2007

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



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Blueknowser

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Grad. Saint Mary's University, 1975, got into the medical device business initially in sales, then various management positions up to president, all in Medical Devices. I prefer therapy products over diagnostic, but they are all fun, and in a way have defined my life. I have now evolved, with help from my 35 year partner Lynnda with whom I now share every hour. I am into staying healthy, photography, kayaking, bicycling, gardening and two books a week. I wish I had gotten to this stage earlier!