American Car Dealers Continue To Anger Canada

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The used car trade war has begun.

Go to any new vehicle car dealer right now and, chances are, you'll have a hard time finding exactly what you want in stock. The new vehicle inventory shortage that continues to plague the US has increased new and used car prices. In some cases, used cars are selling for more than what their new vehicle counterparts normally go for. Late-model used vehicles are now a hot commodity and American car dealers are struggling to keep inventories stocked.

One solution is to buy used vehicles from America's northern neighbor, Canada. In April, we reported on US dealers making substantial purchases at Canadian auto auctions where they were comfortably winning bidding wars because of the favorable US dollar exchange rate.

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This trend has been increasing as Automotive News Canada points out. In fact, a trade war is now brewing. The Canadian dollar has strengthened against the US dollar by 10 cents compared to this time last year, which means the price for exporting goods has increased. However, demand for used cars in America has increased substantially over the past 12 months, making it still worthwhile for exporters.

A J.D. Power study estimates that if the current export rate continues, about 300,000 Canadian vehicles will be shipped to America yearly. Of those, about 25 percent consist of pickup trucks, 15 percent SUVs, and 10 to 25 percent small and midsize cars.

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American dealers are essentially outbidding their Canadian rivals for the most popular inventory. The updated report didn't cite any specific makes or models, but we already knew the Ford F-150, Chevrolet Silverado, Nissan Rogue, and Toyota Camry were among the most sought-after used vehicles at Canadian auctions. How can Canadian dealers compete?

It's not easy because they have no control over exchange rates, so they're getting creative by purchasing used vehicles directly from private owners advertising in classified ads. Traditional dealer trade-ins are also helpful, but without new vehicles available, trade-ins are less common. But as far as auctions go, American dealers continue to grab the good stuff.

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Source Credits: Automotive News Canada

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