You are missing the point of my original post.
I said NOTHING about the issue of EXPORTING or IMPORTING.
I an talking about a Canadian walking into a US car dealership and
plunking down cash to buy a new car, then putting his own plates on
the car and driving it off the lot. The Canadian customer is the one
who will be importing the car back into Canada, and who will have to
deal with any regulatory, compliance, or tax issues.
The point is that the US dealerships are saying that their franchise
agreements prohibit them from selling cars to Canadians - the reason
being that their sales territories (or customer residency addresses
restrictions) are strictly defined in the franchise agreements.
I'm wondering if there are US laws (constraint of trade, etc) that
would make such clauses illegal.
For example, can a General Motors franchise agreement in Dallas say
that I am not allowed to sell a new car to a resident of Fort Worth?
Would such a clause violate any existing state or federal trade laws?
If indeed Americans came to Canada 5 to 10 years ago and bought new
cars (NEW cars) right off the lot, then why weren't the dealerships
afraid of violating their franchise agreements? Weren't the same
restrictions in their franchise agreements as we are being told are in
the US dealer's agreements?
I realize that this isn't exactly what you're talking about, but
Pennsylvania has a 6% sales tax. Allegheny and Philadelphia Counties
have a 1% sales tax, thus making a 7% sales tax paid on items
purchased there. If a person goes to a surrounding county and makes a
major purchase they can save 1%. BUT, eventually you will be billed
for the 1% if the out of County dealer didn't collect it. And now they
notify the county if you make major purchases other than vehicles,
ie., appliances, furniture, etc..
With a cash and carry situation, it is fairly simple to get around some
taxes. Registering a motor vehicle is much different. I don't know how the
Provinces work, but here, you cannot register a vehicle unless the proper
taxes are paid. Importing can subject you to certain regulations also
since the vehicle must comply with Federal regulations for emissions and
All of that said, I don't see why a dealer should turn away a buyer that
walks into his store. I can see where GM may want the dealer to refuse so
they can keep the Canadian dealers happy, but I doubt any laws can be made.
Canadian dealers have the same restrictions on selling new vehicles to
US purchasers. There are even stickers on the vehicle that state "not
intended for sale in the US', or something like that. There is no
problem selling into neighbouring cities, or provinces, as I understand
it, just across international boundaries.
Edwin Pawlowski wrote:
My question remains.
Do US franchise agreements between CAR DEALERS ->and<- AUTO MAKERS
(such as Ford, GM, Chrysler, Toyota, Honda, Nissan, Volkswagon, BMW,
Mercedes, Volvo) stipulate that they cannot sell new vehicles to
purchasers with out-of-boundary primary residential addresses?
Can a dealer in Michigan refuse a sale to a resident of Ohio, for
Are there not US trade laws (restraint of trade?) that would make such
a practice illegal?
Would it be the case that the prohibition of selling to a Canadian
customer is technically illegal, but the Canadian customer has no
recourse under US law?
There are no such laws. Franchise dealers have no obligation to sell to
anybody, just as they have no obligation to sell at a particular price.
There are restrictions when it come to which VEHICLES can be sold in some
instances, however. I. E. cars sold in states that do not require
California emission system can not be sold in states that do, like the
states in New England. Even that does not restrict the dealer from selling
the car, but it does prevent it from being licensed in that state. In other
words a vehicle without California emission, that would be driven only on
private property, but not only the public highways, could be sold in a
California emission only state.
Can a Denny's refuse to serve or do business with black customers?
There is no law against it?
Why would a franchise owner refuse someone paying MSRP, paying in cash
(or bank draft, or some other registered security) ???
Why do US dealerships say that it's their FRANCHISE AGREEMENT that
prohibits them from selling to Canadians?
What salesman would be happy with the franchise owner nixing such a
Why are we hearing reports of US dealerships getting letters from auto
makers reminding them that they can't sell to Canadians?
What about this:
I have no horse in this race, but from a legal standpoint, blacks are a
protected class. Canadians are not.
(To reply by e-mail, replace the last letter of the alphabet in my
address with the letter 'x')
Yes they have agreements that state where a dealer can sell vehicles.
They don't restrict the dealer from selling to other customers they just
state that Joe-Bobs Chevrolet will be the only authorized dealer for a
certain area, and that the company won't set up another dealer for a set
As for restricting the sales to other areas, it depends on the federal
and state emission and safety laws. In NY for example a NEW vehicle must
meet NY standards (which are the same as California) You cannot buy a
vehicle new in another state and register it in NY unless it meets those
As for buying in Canada and registering it in the US. It is usually
restricted due to the emissions and the high importation fees. Those are
Federal importation rules. Same ones that apply if you buy a Ferrari and
try to import it. They have to go through a Federal inspection and
retrofit so they comply with the laws in the US. Doesn't matter if the
car was bought in Canada or Africa they still have to be imported the
The same import restrictions apply taking the vehicle into Canada.
No laws saying that those restrictions are illegal exist.
The dealer can refuse to sell to anyone. They own the vehicles and can
sell or not sell to whomever they please. They can even have you removed
from the dealership and arrested for trespassing if they desire.
there may be an issue with warranty as well. I had a Ram 3500 pick up
come in with the check engine light on. we found it needed a gas cap but
warranty would not cover it because the vehicle was manufactured and
sold in Mexico. we were told the vehicle has no warranty in the USA.
For the last time.
This is not about warranties,
This is not about emmissions or other regulations
This is not about import/export issues, duties or taxes
This is about a Canadian walking into a US dealership and plunking
down a money order or cashiers check for the full MSRP window-sticker
(Monroney) amount for a given new vehicle (plus any applicable state
or local retail sales tax) and loading the vehicle onto a flatbed
truck and driving away with it.
Why on earth would a US car dealer turn away a sale like that?
The reason being offered is that the FRANCHISE AGREEMENT prohibits
sales to Canadians. So I'm asking if such an agreement is legal,
given restraint-of-trade laws.
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.
maybe you should take this to misc.legal, it is already crossposted to 3
groups why not add a legal group since you are asking a legal question.
you do know these groups are full of people who can tell you why your
mini-van makes a rattling noise when driving over bumps but as far as
legalities I don't think so.
unless you are just trolling. if so then excuse me I will get out of the
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
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?
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. :-)
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.
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