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Canadians steering south to buy cars cheaper in U.S.

December 26, 2007|From the Associated Press

HELENA, MONT. — Vu Tran of Calgary, Canada, figures he saved about $14,000 when he recently bought a new car at a Montana dealership. After driving the 400 miles back to Calgary, he told family and friends about the deal and ended up coming back -- to help them buy cars.

"What a bonus I got from Montana!" Tran said.

Placer Motors, where Tran did business, has seen an influx of Canadians looking to take advantage of a hot combination: new cars at sticker prices below what they'd find at home, plus favorable currency-exchange rates. Placer General Manager Erick Anderson says he's just one of a number of U.S. automobile dealers reaping the benefits of Canadian trade. A website,, gives tips about the process.

"There's a huge price difference to begin with and then you take the exchange rate -- it's a no-brainer," Anderson said. A Subaru Tribeca on his lot costs about $35,000, compared with about $55,000 in Canada, he said.

Anderson said Canadian business began as a trickle last year and increased, with his company in November selling 17 or 18 cars to people who then drove them north of the border.

Not everyone is happy with these sales.

Under a Subaru of America Inc. policy effective Jan. 3, new cars sold in the United States but registered in Canada no longer will count toward dealers' bonus payments, spokesman Michael McHale said from company headquarters in Cherry Hill, N.J. Ford Motor Co. spokesman Jim Cain said his company also was among those that discouraged selling cars destined for Canada.

"Canadian dealers have their own business and we have our business here," McHale said. "Their job is to sell cars in Canada and our job is to sell cars here, and we're just trying to make sure we all do our own jobs."

He did not elaborate on the policy and declined to discuss differences in car prices.

"They want to try to protect the Canadian dealer a little bit," said Dave Terebessy, a market analyst for CSM Worldwide in Detroit, which forecasts automotive markets.

Anderson has standardized how he handles the Canadian sales.

"We agree on price and everything else before they [Canadian buyers] get here," he said. "They transfer the money and if for some reason the car is not what they want, I give the money back. Nobody's wanted the money back."

Anderson said that over the last year or so he had seen customers from as far away as Edmonton, Canada, about 600 miles from Helena.

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