Cross-border car shopping not necessarily cheaper, analyst says

Crossing the border in search of a better car sticker price may not save you much money, according to an industry report that suggests the Canada-U.S. price gap has shrunk notably.

According to the September report released by industry analyst Dennis DesRosiers, Canadian prices for subcompact and compact vehicles, compact SUVs, small vans and large pickup trucks have all fallen.

"In the popular compact car segment (the largest segment in Canada), average MSRPs [manufacturer's suggested retail prices] declined about $400in 2007 versus 2006 and the unweighted price differential dropped by $1,000to only $221," the report said.

U.S. auto sales to Canadians have climbed significantly as the dollar has gained in strength, with sales last year exceeding 65,000 — an increase of 50 per centover the previous year, according to the Registrar of Vehicles operating under Transport Canada.

Industry watchers have criticized Canadian dealers for failing to adjust prices to reflect the loonie's strength. But DesRosiers noted that Canadian dealers have been offering aggressive incentives, thereby narrowing the differential further.

"If you deep dive into this analysis you would find that there is a Canada - U.S. price differential of approximately $1,000 spread across two-thirds of the market. In most cases, the price differential is getting smaller despite an even stronger dollar this year," he said.

Desrosiers added that Canada-U.S. differences in the luxury vehicle segment are still pronounced, with luxury sports cars priced $13,694 lower in the U.S. than in Canada.