It´s no secret the American economy is struggling. Even in Canada, the Canadian Loonie is worth one American dollar. Except at car dealerships. Yes, at Canadian car dealerships it appears the US dollar is still strong, given the discrepancies between the cost of a new car purchased in Canada and one purchased in the US. Despite the fact the two countries are similar economically, price differentials on some cars can be as much as $7,000 to $10,000. For example, a Turbo 2-Liter Audi A4 Quattro sells for about $32,000 in the US. In Canada, you´ll spend more than $40,000. Volvo is where the pinch is really felt, exposing a 38% markup that costs Canadians an extra $11,000. This is not really news, as the price difference always existed. However, it wasn´t obvious until the value of the American dollar fell… or you might say, until the Canadian Loonie caught up.
Of course, Canadians are up in arms over the issue. A Toronto-based law firm is expected to file a class-action suit for $2 billion dollars, open to any Canadian who purchased a new auto between August 2005 and August 2007. (During this time period, the Canadian dollar rapidly appreciated, but Canadian car prices did not adjust).
How Canadians Are Getting Justice
The history-making, class-action lawsuit charges that automakers worked together illegally in a conspiracy to create rules a "no-export clause" preventing Canadians from purchasing a car in the U.S. and returning to Canada with the vehicle. They also refused to perform warranty work on those same cars. Dealers have been sucked into the melee, with some US dealers receiving penalties for knowingly selling cars headed for exportation, and Canadian dealers receiving termination threats for non-compliance with the rules.
The lawsuit names most large automakers, as well as the Canadian Automobile Dealers Association and the U.S. National Automobile Dealers Association, as defendants. This is not the first time a case such as this has arisen, but previous cases dragged on with little resolution. Now that the dollar and the Loonie are at parity, it seems this lawsuit may finally bring about the action Canadians are seeking.
It´s no secret the American economy is struggling. Even in Canada, the Canadian Loonie is worth one American dollar. Except at car dealerships. Yes, at Canadian car dealerships it appears the US dollar is still strong, given the discrepancies between the cost of a new car purchased in Canada and one purchased in the US. Despite the fact the two countries are similar economically, price differentials on some cars can be as much as $7,000 to $10,000. For example, a Turbo 2-Liter Audi A4 Quattro sells for about $32,000 in the US. In Canada, you´ll spend more than $40,000. Volvo is where the pinch is really felt, exposing a 38% markup that costs Canadians an extra $11,000. This is not really news, as the price difference always existed. However, it wasn´t obvious until the value of the American dollar fell… or you might say, until the Canadian Loonie caught up.
Of course, Canadians are up in arms over the issue. A Toronto-based law firm is expected to file a class-action suit for $2 billion dollars, open to any Canadian who purchased a new auto between August 2005 and August 2007. (During this time period, the Canadian dollar rapidly appreciated, but Canadian car prices did not adjust).
How Canadians Are Getting Justice
The history-making, class-action lawsuit charges that automakers worked together illegally in a conspiracy to create rules a "no-export clause" preventing Canadians from purchasing a car in the U.S. and returning to Canada with the vehicle. They also refused to perform warranty work on those same cars. Dealers have been sucked into the melee, with some US dealers receiving penalties for knowingly selling cars headed for exportation, and Canadian dealers receiving termination threats for non-compliance with the rules.
The lawsuit names most large automakers, as well as the Canadian Automobile Dealers Association and the U.S. National Automobile Dealers Association, as defendants. This is not the first time a case such as this has arisen, but previous cases dragged on with little resolution. Now that the dollar and the Loonie are at parity, it seems this lawsuit may finally bring about the action Canadians are seeking.
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