U.S. auto dealers looking north of border to snap up used-car bargains

Consumer confidence could hurt new-car sales in final quarter of fiscal year

Bruce Constantineau, Vancouver Sun

Published: Friday, November 28, 2008

Bargain-priced “slightly used” cars will become a hot commodity in Canada as price-conscious buyers scoop them up and U.S. car dealers — armed with a stronger currency — prowl the Canadian market for deals.

That’s the prediction from Canadian car-pricing expert Paul Timeoto, who expects a falling dollar to stir the interest of U.S. dealers in Canadian vehicles.

“The prospect of U.S. dealers coming up here to buy is looming very strongly now,” said Timeoto, president of online car-pricing-data firm CarCostCanada.com. “The dollar has only been below 90 cents US for a few weeks so it may take a little while for them to pay attention to our market. But it won’t take long.”

He noted that until recently, Canadian car dealers took advantage of a strong Canadian dollar to buy used cars — less than one year old — in the U.S. and resell them in Canada.

“Dealers went down there and literally brought them back by the truckload and Canadians saved a lot of money that way,” Timeoto said. “But that situation has dried up now and the reverse is likely to happen.”

New vehicle sales in Canada during the first three quarters this year appeared to be heading for a solid year of about 1.6 million sales, but declining consumer confidence in the final quarter could push that figure down.

Statistics Canada said 14,900 new vehicles were sold in B.C. in September, a 10.8-per-cent decline from the same month last year.

Dueck Downtown general manager Greg Keith said used cars are popular with many buyers, but almost everyone wants the newest technology possible because fuel efficiency is such an important factor.

“It doesn’t make a lot of sense for a person to buy a three-year-old car, especially with gas prices the way they are now,” he said. “I drive a new Escalade hybrid full-size vehicle that gets better fuel economy than a lot of mid-sized cars.”

StatsCan said new-vehicle prices in Canada are at their most affordable level now in more than 15 years, measured as a percentage of disposable income. It takes about 19 weeks of disposable income for a typical Canadian household to buy a new car, down from a peak of 25 weeks a decade ago.

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