American businesses are still selling products cheaper than those in Canada, even though our dollar is at par.
So, wouldn’t I be a fool not to buy my new minivan in Alaska?
The answer, which may remind you of Harry Truman’s famous quote “Give me a one-armed economist,” is yes and no.
Five years ago, a run to Haines for a weekend of fishing and beers at the Fogcutter Bar was in the same league as a family vacation to Mexico.
With a hotel room at US $120 a night, halibut and chips costing US $17.95 and pixies selling for US $3 a pop, it felt like the whole point of putting in time with your fishing rod on the sandy banks of the Chilkoot River was to hook enough pinks, dollies or sockeye to rationalize the excursion.
Back then, when the Canadian dollar was worth 61 cents US, travelling as far into Alaska as Anchorage or Juneau to scope out Sierras, Odysseys and Sedonas would have been sheer lunacy.
But ever since September 20, 2007, the idea of buying a new van in the reaches of Alaska has had much merit.
That’s when the Canadian dollar hit a level that seemed unlikely a year earlier — parity with the US greenback for the first time in almost 31 years.
Two quick visits to two local websites convinced me I should not buy at home.
The Canadian Toyota site told me that in Whitehorse a 2008 Sienna sells for $31,750, with 4.9 per cent interest over 60 months. They’ll throw in a national promotional gas gift card worth $1,500, or equivalent discount, too, it said.
In the 49th State the same minivan goes for $25,793. The dealer quotes me a special internet price of $25,151 and a rebate of $1,500, for a total of $23,651. Interest is only 1.9 per cent over 60 months.
The difference is $6,600 in favour of Alaska, plus what I’d save on interest.
Another search yields the same result: a Ford F-150 topped out at $46,500 in Whitehorse, but only $38,000 in Anchorage, a difference of $8,500.
It’s too good to be true — I should have driven to Anchorage yesterday.
But what a pain in the butt to drive all that way only to turn around and drive home.
Why can’t prices simply be lowered in Canada if our dollars are at par?
That’s the hot question these days and one manufacturers haven’t adequately answered.
Some blame the higher cost of living in Canada — the wages, taxes, etc. that are tacked on to the costs of goods. It’s an argument that doesn’t wash, however, when both the American and Canadian dealerships sell cars made in Windsor, Ontario.
Corporations, chains and franchises of all kinds, in fact, have done a poor job at defending the disparity of prices across the border when there should be parity.
So I am forced to look again at Anchorage and see if, in the end, buying a van in America will truly be cheaper.
Of course the higher the cost of the vehicle, the more I’ll save. The cutoff line seems to be around $30,000 with anything less than that not worth the bother.
There are number of websites that can guide you through that bother, such as http://www.importcartocanada.info/.
It runs you through a 21-point checklist on “How to Import a Vehicle into Canada,” including whether the car needs modifications to pass federal inspection requirements, and how much that will cost you.
Another cost might be a high emissions excise tax. These could cost me anywhere between $1,000 and $4,000 on high emissions vehicles. You can do a search on specific vehicles at http://oee.nrcan.gc.ca/transportation/tools/fuelratings/ratings-search.cfm?attr=8.
(I also need to remember to check for safety recalls or it might not be allowed in Canada.)
Another cost might be paying a customs broker if I decide not to make the trip to Anchorage and have the vehicle shipped.
There is also the Registrar of Imported Vehicles fee ($209+GST ) http://www.riv.ca/, a possible air conditioning excise tax ($100), and possibly duty (6.1 per cent of the cost of the vehicle) if the vehicle was not built in North America — and that can exclude Mexico among some American brands.
And on top of all the costs are some major issues that I’d better solve before going west.
Many North American manufactures will not extend their warranties to Canada and some dealerships are not allowed, based on their dealership agreement with the manufacturer, to sell a car for export.
Leave it to me to be standing in Anchorage, chequebook in hand, only to be told I’m not allowed to bring my shiny new minivan to Canada.
A final question for me is one of shopping locally.
When it comes to cars, we can be pretty certain the local content is going to be small. But there are the dealership owners, the salesmen, the administrative staff — the local economy would indeed be affected if everyone in the Yukon bought their vehicles outside the Yukon’s capital city.
Across Canada, and especially in cities near the US border, dealers are already feeling the effects of cross-border shopping.
That being said, when major car companies are sluggish in adjusting to the parity issue, should consumers be the ones to pay for it?
Now, where is that one-armed economist to tell me what to do?
Juliann Fraser is a writer living in Whitehorse.