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Car Buyers Save Money By Shopping in Canada

Aired June 19, 2003 - 20:40   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, CNN ANCHOR: Well, have you noticed all of a sudden, a lot of people seem to be heading up to Canada, not for vacation, but to actually buy a new car? Think it's a good idea? We're going to try to find out.
Susan Lisovicz is here to tell us about it.

Why are they doing this?

SUSAN LISOVICZ, CNNfn CORRESPONDENT: Well, there's a whole bunch of reasons, among them free trade. You know, the tariffs were removed for these cross-border purchases as well as the Canadians adapted U.S. emission and safety standards. That's huge. As well as, of course, the currency. Favorable exchange rate.

COOPER: Let's look at some of the numbers of people.

LISOVICZ: Sure.

COOPER: In 1994, there were, like, 15,840 people buying cars -- cars bought in Canada. 1998, it was up 76,000. 2002, two thousand and eleven -- two thousand....

LISOVICZ: Two hundred thousand.

COOPER: Two hundred thousand, I'm sorry. The wrong figure.

LISOVICZ: That's a 1,200 percent increase and that's exactly why.

These tariffs that were removed, the emissions and safety standards, they all came into play in the late -- late '90s. So there's no coincidence about the surge.

But then again, you have the favorable exchange rate. And Canadians make less money than American do on average. So it's -- manufacturers charge less there. Canadians are more pragmatic about their cars. They buy them to get from point A to B. Americans are sort of defined by their cars. We drive more for pleasure. We'll pay more for the car.

COOPER: Let's look at some of the dollars, though. What kind of deals are out there?

LISOVICZ: Well, you know, one trade group says that on average, across all types of models and makes, you've got 25 to 35 percent savings. So it's significant. And then, you know, in terms of specifics, the Grand Caravan, for instance -- $3, 300. PT Cruiser, hugely popular here...

COOPER: Wow.

LISOVICZ: ...$2, 100.

COOPER: But there are cons here in -- in -- I mean, it's not all smooth sailing.

LISOVICZ: Well, you have to go to Canada. I don't consider that a con. I love going to Canada.

COOPER: But in terms of schleping up there...

LISOVICZ: But it's not as convenient as, say, your local Ford dealership.

COOPER: Also you have to redo the odometer.

LISOVICZ: The odometer, yes. That could cost up to, say, about $800, you know, per car because they're in kilometers as opposed to us.

But one of the bigger disadvantages is that some car companies won't honor the warranty when the car is re-registered in the U.S., Daimler Chrysler among them. Manufacturers don't like this at all. It's totally legal. But they don't like it. They want to sell their cars to Americans in the U.S. where they can charge more.

COOPER: So they're pressuring some of these Canadian dealers to kind of sell the old cars, not the best cars.

LISOVICZ: Exactly.

COOPER: All right.

LISOVICZ: And oftentimes intermediaries are used, which automatically jacks up the price.

COOPER: All right. So you got to do your research before you go up there.

All right. Susan Lisovicz....

LISOVICZ: You sure do.

COOPER ...thanks very much.

LISOVICZ: My pleasure.

COOPER: All right.

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