The last time the Canadian dollar stood at par with the American dollar, in January, 1976, British Airways and Air France were readying the Concorde's first supersonic commercial flight and Nick Izzo was a peppy 10-year-old with an obsession for toy cars.
Now the Concorde is dead and he's dealing the real thing -- saving many Canadians a lot of money as the loonie claws its way back to its former glory.
Mr. Izzo and his family run Superior Auto Sales Inc., a car dealership near Lake Erie just south of Buffalo. In business for more than 50 years, they specialize in finding new and used cars and trucks located in the United States and delivering them to Canadian customers looking for a better bargain in the United States. And they say orders in the past four months have "gone nuts."
The soaring Canadian dollar spurred a record number of Canadians to buy a new or used car in the United States last year -- 112,826 vehicles in all, according to the North American Automobile Trade Association. It was the first time more than 100,000 vehicles headed north. But interviews with dealers and Internet chat suggest the cross-border buying has picked up even more in the past few weeks as the dollar passes US95? and climbs toward parity.
"It's about time, eh?" said Mr. Izzo, an American who nevertheless harbours an obvious affection for Canada.
"You guys have been behind our dollar for almost as long as I've been alive. We used to love going up there to shop for clothes. It was any excuse to go to Canada. We'd buy all kinds of stuff."
That included cars. When the loonie was tanking against the American currency earlier this decade and before, auto dealers in both countries were buying vehicles in Canada and packing them on trucks going south.
Now the tables are turned. The loonie has found new-found strength on the back of a strong Canadian economy. More Canadian dealers are showing up at auto auctions in northern U.S. states. And more Canadians are realizing they can sometimes save thousands of dollars if they buy a car across the border.
It's all happening because manufacturers' suggested retail prices for vehicles have generally not changed in either country to adjust to this new reality. Based on the exchange rate in the first half of 2006, the sticker price for the average vehicle was $5,842 higher, or 17% more, in Canada than in the United States, according to a study released last year by DesRosiers Automotive Consultants. That difference could be even greater now.
A typical Superior customer in Canada pockets 10% of the vehicle's price by shopping cross-border, the company says. The more the vehicle costs, the more they save.
"The real issue is that the manufacturers are selling cars to the U.S. dealers at a significantly reduced rate than what they're selling to the Canadian dealers," said Richard Ferber, office manager at Superior. "And that's unfair. It's really being done at the expense of the Canadian consumer. And that's really created a market niche for us."
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