Canadians Bought 25,000 Cars in U.S. in October

(Canadian Press)

A soaring loonie pushed the number of cars Canadians purchased south of the border in October to nearly 25,000 – an increase of more than 100 per cent over the same month last year.

"We have been seeing a steady increase throughout 2007 and it really reflects the fact that the Canadian dollar has been appreciating against the U.S. greenback, making it more attractive for Canadians to go down into the U.S. and pick up a vehicle," said Carlos Gomes, senior economist with Scotia Economics.

According to Transport Canada, 24,873 cars were imported from the United States in October, more than double the number of cars – 12,289 – imported in the same month last year.

Simultaneously, the number of new car sales in Canada has declined from 158,394 in August to 121,000 in October.

Some experts say the number of Canadians who are holding off making purchases hoping to see lower vehicle prices here in Canada has added to that decline, which has prompted warnings that a steady rise of the loonie is hurting the economy.

However, that argument does not seem to stop tens of thousands of Canadians who cross the U.S. border every week looking for bargains.

And savings can be nowhere more significant than when purchasing a car. Many motorists who have purchased a car south of the border say they've saved in some cases up to $20,000.

But not all car bargain hunters have been able to take their newly bought wheels for a drive.

A new regulation by Transport Canada that requires that all vehicles be equipped with an electronic immobilization system means about a thousand cars without the anti-theft device purchased by Canadians in the U.S. may never be licensed.

While Transport Canada says the new regulation is here to stay, it admits some of those cars may have been purchased between Sept. 1, when the new regulation came into effect, and the time when the agency posted it on its website.

"There was a delay before the website was updated," Patrick Charette, a spokesman for Transport Canada admitted in an interview with The Canadian Press.

"I know that people clicked on the website and the car wasn't listed as not admissible. They bought the car and by the time they came back they said `Oops, now it's listed as not admissible."

The confusion arises from the fact that not all cars and models can be equipped with the anti-theft device.

To avoid having those cars held at the border, Transport Canada has authorized Canada Border Service Agency agents to allow owners to drive their cars home with a form clearly marked "not admissible."

"There's no guarantee that this car will ever be admissible and will ever be allowed to stay in Canada with plate and license," said Charette.

However, he said authorities were working to find a temporary solution.

"We want to make sure that we can get a balance between our safety approach and the situation obviously consumers are facing," Charette said.

But experts are looking for a long-term solution, which would be same vehicle standards in the U.S. and Canada.

"Most of the cars that we produce here in Canada are sent to the United States, so it would make sense that we would have a uniform standard . . . so that when you are assembling a vehicle you don't have to be putting in certain technical requirements for the Canadian markets as opposed to the U.S.," said Gomes.

"You would be able to produce the same vehicle for both markets."