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

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?

Reply to
MoPar Man
Loading thread data ...

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 :)

Reply to
Picasso

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.

Reply to
who

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

Reply to
Ken Moiarty

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')

Reply to
Bill Putney

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.

Reply to
who

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

Reply to
My Name Is Nobody

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?

Reply to
Ken Moiarty

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.

-->--

Reply to
Bruce L. Bergman

That's the meat of it.

Reply to
who

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.

Reply to
Edwin Pawlowski

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.

Reply to
General Schvantzkopf

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

Reply to
Josh S

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."

formatting link
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).

Reply to
MoPar Man

Such rules do not prohibit or hinder a transaction between a prospective Canadian customer and a US new car dealer.

The Canadian gov't publishes guides explaining how it's citizens can import a wide variety of items from the US into Canada. The Canadian gov't does not have the same level of "paranoia" regarding the tracking or reporting of the movements of assets owned by Canadians outside of Canada (or inside for that matter). The only requirement along those lines is that Canadians must report if they own more than $100k of non-Canadian real estate. Many Canadians own US real estate, and vice-versa.

Are there state or local laws that prevent US car dealers from selling NEW vehicles to Canadians?

The sale of USED vehicles to Canadians happens all the time. So do US state or local laws differentiate between new and used vehicles - or (as I suspect) are there NO such state or local rules prohibiting sale based on Canadian residency?

That is a technicallity that is NOT used as the basis for denial of sale of NEW vehicles to Canadians.

The franchise agreements can not contain illegal clauses that constitute restraint of trade. If they do, they can (and should) be challenged by the dealers.

Reply to
MoPar Man

The US new car dealer IS NOT SELLING INTO CANADA.

The US new car dealer is selling to a Canadian resident. The US dealer is not authorized to collect Canadian taxes. The Canadian customer must show proof to the relavent Provincial department of Transportation that applicable provincial sales taxes were paid before the vehicle can be licensed for operation on public motorways. Such taxes are uaually paid at the boarder when the vehicle is brought into Canada.

The Canadian federal gov't and the various Provincial gov'ts do not prohibit the importation of vehicles (new or used) by Canadian citizens from the US into Canada, and they do not employ restrictive or onnerous tactics to prevent the lawful registration and use of those vehicles in Canada. To the contrary, the Canadian gov'ts publish guides explaining how to perform such importation and registration.

The US and relavent State gov'ts have no rules or mechanisms in place to prevent or hinder the sale of new or used cars to Canadians by US dealers.

Hence this is not an issue of trade policy or trade law between countries.

This is a restraint-of-trade issue which makes such clauses in franchise agreements illegal if not unenforcible.

Reply to
MoPar Man

It's like most the people responding to your question didn't read your question.... strange.. it must frustrate you.

To answer your question; it's illegal for the dealerships not to sell you a car on the basis of your race - that violates the civil rights you can enjoy while in the jurisdiction of the states. (You do not have to be a US citizen but instead just be in the states to have rights.) Having a policy not to sell to Canadians is no different as having a policy not to sell to Jews or Blacks. When I say Jews or Blacks, people can automatically see the point more clearly.

The agreement between the manufacture and the dealership is mute and has no merit. Your problem is NOT with the manufacture but instead the dealership that is breaking the law and pulling the trigger so to speak. Of course, the franchise agreement is illegal however that's not for you to dispute but the dealership. You must make your claim against the dealership.

3 main points to prove in a discrimination complaint / law suit:

  1. Is the discrimination intentional = yes, the dealership/manufacture state it's their policies NOT to sell to Canadians that are in their stores and buying their products within the USA. This isn't an export issue or tax issue (there is procedures already in place for both of those issues so they are mute.)

  2. Motive = their motive is profit: their policy is to protect their dealerships on both sides of the border.

  1. To prove that this policy exists. This is usually the hardest to prove. You can always scream discrimination however who in the world is going to admit it? Well, the dealerships will every time.

You'd think with the 1, 2, 3 covered people would line up and take the dealerships to court. The problem is, people are don't understand they have the right to and they are lazy and assume the worst.

Reply to
info

Canuk is not a race. Race is a protected class. Nationality is not a protected class.

No - it clearly does not.

Yes it is (though your *conclusion* on restraint of trade may be right, but not for the reason you cite).

Your conclusions may be right, but for the wrong reasons - civil rights (as defined by U.S. federal law) is not the issue. Races and religions are protected classes (civil rights as defined by federal law). Nationality (i.e., being Canadian) is not a protected class. (Currently, protected classes are race, color, sex, creed, and age.)

Like I said, you may or may not be right that trade restrictions across borders are illegal, but if it is illegal, it would not be illegal for the same reason that not selling to blacks or to jews would be illegal.

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

Reply to
Bill Putney

Mute? You mean they told the dealer to keep quiet about it?

Reply to
Edwin Pawlowski

Reply to
Ken Moiarty

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.