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

maybe you should take this to misc.legal, it is already crossposted to 3
groups why not add a legal group since you are asking a legal question.
you do know these groups are full of people who can tell you why your
mini-van makes a rattling noise when driving over bumps but as far as
legalities I don't think so.

unless you are just trolling. if so then excuse me I will get out of the
way.

 

Read Wes's reply - that is an example. There are many other examples in
everyday life - some that shouldn't be, and many that are based on
politics. For example - so-called affirmative action laws trump
anti-discrimination laws. There might be a law that says I can't fire a
weapon within town limits that might get trumped if I am forced to to
save my or someone elses life. Almost infinite examples.

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

 

I got that info from two other Chrysler dealers we deal with.
Did they lie? BTW the dealer DC faulted was in Richmond, BC.
One dealer who told me this took over the dealership, they were my
dealer! There were also some media reports on this situation.
The dealer losing the franchise didn't export to the USA, they were
actively advertising and selling to USA customers who came to Canada,
picked up their car and did the export/import themselves.

Now we have Honda Canada saying they will not honor the warranty on a
new Honda purchased in the USA. The Honda CR-V is 35% higher in CDA!
A go around I've heard is buying a slightly used USA vehicle. Some USA
dealers are licensing them in the USA just to turn on the used switch.

There are examples of this same anti free trade by manufacturers in
other businesses, one being in computers where I have personal knowledge
of manufacturers restrictive practices.

Our Canadian Government does not restrict cross border trade, in fact
they provide info on how to import a vehicle.

On a related subject I've noticed in the last year some Canadian dealers
(DC included) near me selling one year off lease cars at extremely low
prices. They couldn't be costing those cars at their normal CDN retail
price. IMO they are costing them at the significantly lower USA price
factored by the CDN exchange rate, which is 1:1 now.

 

Yes they did lie! Richmond was and is still run by a retard (Binkley). And
Columbia was a brand new dealership which was an open point created as the
dealer and DC wanted to close his New westminster dealership, because of his
need for a new facility and lack of any semi-reasonable realestate to build
a facility. So Columbia moved into the location of the former dealer, as
that dealer turned his franchise over to us, as he was a retard at running a
business and could not be profitable. His main reason for turning it over
was the fact the unions controlled the dealership.

 

Again, we are NOT talking about import or export issues. The US
dealer is NOT involved in import or export activities when (or if) he
sells a new car to a Canandian customer. It's the Canadian customer
who must import the car into Canada - the dealer is NOT involved.

 

There is no such cross-boarder selling in this case. The US dealer is
not doing the leg-work to import the car into Canada - the Canadian
customer is.

Why is that concept so hard to understand?

The new car will leave the US dealer's car lot either by the Canadian
customer driving it off the lot himself, or with his own hired flatbed
transport.

 

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?

 

well **** 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

 

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.

 

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

 

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')

 

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.

 

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

 

May I refer you to the last line of the first paragraph in the OP's original
post:

On September 27, Mopar wrote...

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?

 

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.

--<< Bruce >>--

 

That's the meat of it.

 

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.

 

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.

 

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

 

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."

http://en.wikipedia.org/wiki/Restraint_of_trade

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).