There have been many instances where people have bought the car from a dealer in Canada only to find out that it was actually imported. Even though it is not a bad thing if the dealer has gone through the legal import process, it still leaves you wondering; why do they do that?
It’s not like Canada has a scarcity of vehicles that we need to import from the neighbours. So the question is, why? Well, there are a few valid reasons behind this, and this article will talk through them in great detail. So let’s look at them below:
Cars in The U.S Are Relatively Cheaper:
Yes, this is true, and if you’ve bought a car in Canada and did some research for its pricing in the U.S, you know exactly what we are talking about. According to a comparison of prices between Canada and the U.S for new vehicles, Canucks pay up to 20% more than Americans.
This means if a car costs $30,000 in the U.S, you can expect Canadians to pay over $35,000 for it. Now many manufacturers argue that they charge for the price of importing the vehicles to Canada because their manufacturing plants are not here.
Well, the North American Free Trade agreement says otherwise. According to it, any car manufacturer within North America can export or import between North American countries without paying any duty.
Now, this is where the dealers play over the prices. They purchase a car cheaper in the U.S, have it shipped to Canada for maybe $1-2k and then sell for a few thousand dollars above the total cost, which will still be equal to what that car would’ve cost if bought in Canada instead of the U.S.
They Buy Bulk Car Lots That Cost Them Lesser:
This is another way to make more money on top of their profits from sellingindividual cars. There are many online auction platforms in the U.S where big dealers dump their old stock (lots of used cars) at a lower price. This is because either they run out of space and want to bring in new inventory or because the cars are not selling well.
Whatever the case is, Canadian dealersbuy the lot and get massive savings because of bulk purchases. Had they bought a single car from the lot, they would’ve paid a lot more than what they get away with for a whole stock. These dealers then sell these cars individually in Canada for higher profits.
They Transport In Bulk & Save on Logistics Costs:
Since many dealers purchase in bulk, they ship these cars in bulk as well, which means auto transport companies like Canadian Car Shipping give them a massive discount. So they also save up a lot of money on transportation costs.
The import is free because of the North American Free Trade Agreement, so they don’t have to pay a lot of duty except for some taxes and fees. So all in all, they end up saving a lot of money and the higher their savings are, the more profits they make.
Wrapping Up:
If you want to purchase a car in the U.S and bring it to Canada to save money like the dealers do, you can always get in touch with Canadian Car Shipping.
We have helped several Canucks get their favourite rides delivered to their homes in Canada at a fraction of cost.