Canadian VS American: The Price Gap for Canadian-Made Cars

The US and Canadian border is the longest peaceful border in the world, with the two North American giants enjoying friendly relations, and trade across the border.

The two dollar currencies fluctuate against one another, and those who live close to the border on either side often take advantage of this by doing their shopping on one side or the other.

However, generally, prices in the US are cheaper than in Canada, and sometimes by quite an extreme margin.

For example, a GM Yukon is sometimes as much as CA$11,000 more expensive north of the border than on the South (Source: The Canadian Globe and Mail). This confuses the Canadians as much as it cheers the Americans.

Why the Difference?

In reality, however, the Canadians shouldn’t take it personally. Goods in the United States are cheaper than most other Western countries, including much of Europe. It’s only put into stark contrast by the presence of a land border in the case of Canada. If someone from the UK, Germany or France were to travel to America, he or she would quickly see that goods, and particularly cars, were cheaper than in their home country. The reason for this is one of the simplest economic answers you can find – supply and demand.

In Canada, the smaller population and the often difficult climate means that the range of cars available is far smaller. By contrast, in the United States, the wealth of options means that the consumer has a far greater range of choices. Because supply is relatively restricted in Canada, the prices can be higher without impacting on the demand. As a result, consumers in Canada are far less comfortable or willing to negotiate over the price of their car. In the US, customers know that there are a number of other dealers, and they can just take their custom elsewhere. This further drives down the price, which is not the case in Canada.

Getting the Best Deals

So, what are you to do if you are a Canadian car buyer? Firstly, shop around, and do your research. If you do this, you will be able to negotiate a price. Although the seller may be reluctant at first, be firm, and don’t go above a predetermined price for the vehicle. If you have already bought your car, then much of the financial damage is done. You will have to look for other ways to save money on your car, such as with cheap windshield replacement, or by lowering your car insurance premiums. Either way, next time you buy a car, think like an American and you will save yourself a fistful of dollars.

Catherine Halsey writes for a digital marketing agency.  This article has been commissioned by a client of said agency.  This article is not designed to promote, but should be considered professional content.