US car dealers turn away Canadian new-car buyers - is that legal?

Read Wes's reply - that is an example. There are many other examples in everyday life - some that shouldn't be, and many that are based on politics. For example - so-called affirmative action laws trump anti-discrimination laws. There might be a law that says I can't fire a weapon within town limits that might get trumped if I am forced to to save my or someone elses life. Almost infinite examples.

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

I got that info from two other Chrysler dealers we deal with. Did they lie? BTW the dealer DC faulted was in Richmond, BC. One dealer who told me this took over the dealership, they were my dealer! There were also some media reports on this situation. The dealer losing the franchise didn't export to the USA, they were actively advertising and selling to USA customers who came to Canada, picked up their car and did the export/import themselves.

Now we have Honda Canada saying they will not honor the warranty on a new Honda purchased in the USA. The Honda CR-V is 35% higher in CDA! A go around I've heard is buying a slightly used USA vehicle. Some USA dealers are licensing them in the USA just to turn on the used switch.

There are examples of this same anti free trade by manufacturers in other businesses, one being in computers where I have personal knowledge of manufacturers restrictive practices.

Our Canadian Government does not restrict cross border trade, in fact they provide info on how to import a vehicle.

On a related subject I've noticed in the last year some Canadian dealers (DC included) near me selling one year off lease cars at extremely low prices. They couldn't be costing those cars at their normal CDN retail price. IMO they are costing them at the significantly lower USA price factored by the CDN exchange rate, which is 1:1 now.

Yes they did lie! Richmond was and is still run by a retard (Binkley). And Columbia was a brand new dealership which was an open point created as the dealer and DC wanted to close his New westminster dealership, because of his need for a new facility and lack of any semi-reasonable realestate to build a facility. So Columbia moved into the location of the former dealer, as that dealer turned his franchise over to us, as he was a retard at running a business and could not be profitable. His main reason for turning it over was the fact the unions controlled the dealership.

Again, we are NOT talking about import or export issues. The US dealer is NOT involved in import or export activities when (or if) he sells a new car to a Canandian customer. It's the Canadian customer who must import the car into Canada - the dealer is NOT involved.

There is no such cross-boarder selling in this case. The US dealer is not doing the leg-work to import the car into Canada - the Canadian customer is.

Why is that concept so hard to understand?

The new car will leave the US dealer's car lot either by the Canadian customer driving it off the lot himself, or with his own hired flatbed transport.

The NNTP server I'm using won't let me have more than 3 groups unless I specify a "follow-up to" group, which would make it difficult to follow the thread.

I'm thinking that someone in these three auto groups must know something about dealer franchise agreements - moreso that anyone in misc.legal.

There are many posts in this group that pertain to the relationships between car dealers and auto makers, so at one level my question about what is contained in those agreements is no different.

More generally, the design, manufacture, and operation of vehicles is heavily goverened by legalities, many of which are also talked about in these groups, so again the discussion about vehicles and laws are also not out of place here.

I am not trolling. Every day, as the Canadian dollar climbs above parity and appreciates in value has more Canadians shopping in the US for all manner of goods. When a Canadian can save at least $5k, and in some cases more than $20k for a vehicle, I'm sure you can understand why it is such a burning issue for those of us that are told by the US dealership that they can't sell us a new vehicle.

In the capitolist, freemarket land of the USA, a country boardering on recession, a vendor declines to do business with a customer. Where is the logic in that?

well f*ck em.

i'm going mondya to bring a chevrolet halfton in to canada.

Hopefully shes all made in the USA and i don't have to pay any duty :)

Pressure from the vehicle manufacturers. If they adjusted their CDN prices to no more than 10% above the USA prices this cross border shopping problem would not be such a big deal.

But Canadians are mostly all working and the car companies are greedy. They'll have to change. Those who don't want the hassle of buying a car in the USA may wait this out. The result will be lost sales.

Oh, the car makers will change alright. But the change will not extend to their car pricing. They will simply apply their corporate resources to further tighten their manipulative take from Canadian consumers. This will involve both, the stick and the carrot approach, as it were. The stick: For example - lobby governments for stricter vehicle import/export policies, and/or take advantage of existing Canadian import restrictions by deliberately designing more of their U.S. dealer bound vehicles so as to NOT comply with Canadian RIV rules. The carrot on the other hand: For example - provide cars destined for Canadian dealers with sentimental token features designed to make the no-nonsense Canadian consumer feel all warm and fuzzy inside, such as replacing the brand name "Toyota" with "Kyota" (from Kyota Protocol), and the brand name "GM" to "GM Free" (meaning "This car was made with No Genetically-Modified food ingedients"), and throw in with the vehicle purchase, complimentary Carbon Credits as a commitment to an albeit unprovable yet very much in vogue climate hypothesis. :-)

Ken

That post was insensitive and uncaring!! LOL!

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

I believe I see consumer resistance taking place. Near my house is a large lot that the nearby Honda dealer uses for excess new vehicle storage. The lot is about 0.5 km from the dealer and isn't too obvious from the street. I recently noticed more vehicles there than ever, in fact the numbers are increasing daily. The lot is nearing full.

Nothing is more effective than consumers stopping their purchases. No one likes to be gouged, even the rich.

I'm sure if you walked in and paid cash, there would be no questions asked...

May I refer you to the last l Now that the Canadian dollar has reached parity with the US dollar (1 USD = 1CDN), the media here in Canada is running many news items pointing out that US car dealers are turning away Canadians who want to plunk down cash to buy a new car. ^^^^^^^^^^^^^^^ The dealers say that their franchise agreements prevent them from selling vehicles to people who live outside their territory. I remember from a few years ago where there were moderate differences in prices in the Chicago area and all sorts of games were being played (both by customers and dealers) to sell cars to people outside a dealer's franchise area.

In any case, it seems like some of the off-brand vehicles (Hundai sp?, Suburu sp?) are more likely to look the other way and sell to Canadians.

But I'm wondering if franchise agreements that contain geographic-based sales clauses are violating any trade laws that may be on the books in the US, and hence could be used to break this rule and open the floodgates to the many Canadians that are ready to save $4k to $30k on a new vehicle.

In the mean time, can anyone point to entities called "independent dealers" who buy new vehicles and turn around and re-sell them (as used) even if they haven't been used?

Actually, there *would* have to be some questions asked and the answers recorded.

For openers, there are US Federal banking rules on recording of transactions over $10,000. And I strongly suspect that Canada has similar laws if you wanted to take the car in the other direction.

The dealer needs a name and address to fill out the title transfer paperwork for the car - even if the dealer doesn't handle the titling and registration of the new car, they still need to fill out and give the title form to the buyer so the buyer can handle it themselves.

And they have to apply in the state of sale for temporary registration so the car can be driven away, unless the buyer wants to have the car shipped across the border to it's destination.

The car maker has the right to find out those details, and if the dealer made sales transactions that violated the franchise agreements the car maker can choose to take action.

-->--

That's the meat of it.

And for three easy cash payments of $9999 this car can be yours!

Don't be silly, every one of these can be worked around if the dealer wants to make the sale. It is not much different that here in New England where people register in Vermont.

It is different. Selling across state lines is different then selling across national boundaries. The US is one big market, the US and Canada are two separate markets even with NAFTA. I live in MA and bought my car in Nashua NH. The dealer registered my car in MA for me because there is nothing to stop someone from NH registering a car in MA on behalf of someone from MA, the US constitution expressing prohibits the states from erecting trade barriers between each other. As a MA resident I'm bound by MA law so even though I bought the car in NH I had to pay MA sales tax (NH has no sales tax). MA cleverly insures that the sales tax on cars is paid by requiring that it be paid to the Registry of Motor Vehicles at the time that the car is registered, my dealer took my sales tax check to the Registry for me just like they would if they had been a MA dealer. I'm also required to buy a car that meets California emission standards, NH residents aren't, so even though my dealer is in Nashua most of the cars on their lot all have the California emissions package because a substantial portion of their customers are from MA. If I had wanted to by a diesel from them I couldn't unless I had a NH address because diesels don't meet MA emissions standards.

Restrictive sales agreements are very hard to enforce without the cooperation of governments. State governments aren't allowed to make trade policy so there is no one to give a company cover if they wanted to restrict their dealers from engaging in interstate trade. National governments are always torn between free and restricted trade policies. On the one hand almost all economists favor free trade so we have agreements like NAFTA. On the other hand politicians don't like free trade because they are more sensitive to the jobs that are lost, which are more visible, then to jobs that are gained which don't make headlines. So the US and Canadian governments aren't going to do anything to help their consumers do cross border shopping, quite the opposite they are going to erect as many barriers as they can. For example when US consumers tried to by pharmaceuticals from Canada, where there is price fixing, the FDA forbade it on the grounds that these drugs might be unsafe as if Canada was some third world country with no drug regulations.

The CDN Gov is helping CDNs buy USA cars by posting helpful info on their web site.

A Canadian would almost certainly have to pay in "cash" or equivalent (bank draft, cashiers check, etc) if they were to purchase a new vehicle from a US dealer.

But as has been stated here MANY TIMES, US dealers are refusing the sale, on the grounds that their franchise agreements do not allow them to sell to Canadians - even if the transaction happens 100% within the dealer's showroom and the dealer is in no way involved in transporting the vehicle into Canada.

(FYI - Currently, 1.00 Canadian dollar is equal to almost 1.03 US dollars).

There are absolutely NO restrictions placed on Canadians by any level of Canadian gov't that prohibits Canadians from purchasing US vehicles (new or used) and bringing them back to Canada and licensing them for use in Canada. The Canadian gov't publishes pamphlets and guides explaining the process. There are also no US gov't (or state or local) restrictions that prohibits Canadians from purchasing new or used vehicles from any level of US vendor (dealer, private owner, etc) and exporting the vehicle back to Canada.

There are laws in the US (restraint of trade) that prohibits contracts between parties that convey no benefit to either party. A clause in a dealer franchise that specifies a condition where a sale can not be made is an example of a contract that conveys no benefit to either the dealer or the manufacturer and technically violates US restraint of trade laws.

"Contractual obligations not to trade are illegal agreements on public policy grounds unless they are reasonable in the interests of both contracting parties and of the public at large."

An agreement between a manufacturer and a dealer that specifies that a dealer can not do business with a subset of prospective customers is an example of "restraint of trade" and conveys no benefit to either the dealer or the public.

And such an agreement does not benefit the auto manufacturer in question because auto makers operate separate US and Canadian companies, hence an entity like Ford USA does not benefit by placing restrictions on US dealers to sell only to US residents (irregardless of the fact that Ford Canada may benefit from such a restriction).