American Consumers Should Beware of Great Deals on Canadian Cars, According to Edmunds.com


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American Consumers Should Beware of Great Deals on Canadian Cars, According to Edmunds.com

Santa Monica, CA - June 20, 2002 - Did you get an unbelievable deal buying a nearly new used vehicle? Car shoppers might be tempted to save up to $6,000 purchasing a vehicle that was intended for the Canadian market, but the associated risks often outweigh that savings, according to the "Gray Market Cars" Special Report featured on Edmunds.com, the Web's leading consumer resource for unbiased automotive information.

Nearly 200,000 cars were imported from Canada into the United States through official channels in 2001, according to the National Highway Traffic Safety Administration, but investigators on both sides of the border estimate that a total of up to 700,000 vehicles actually came south to the United States. Many of these vehicles were stolen, were given salvage titles, had flood damage or have liens on them in Canada, making their importation illegal - and therefore subject to seizure from their U.S. owners. One investigator interviewed by writer Tara Baukus Mello helped recover 200 vehicles that were stolen from Canadian dealers and individuals and then sold in the United States. The vehicles -- Lexus, Mercedes-Benz, Ford and Cadillac models -- were seized from their new U.S. owners far from the border, in states such as Utah, Illinois, Michigan and Florida. In most cases the owners were shocked to learn their vehicles came from Canada.

In addition, U.S. owners of these "gray market" vehicles may be surprised to learn they have no warranty coverage, or that their odometers may have been "rolled back," illegally reflecting less than the actual mileage driven. According to Mike Kelso, director of vehicle investigation for the National Insurance Crime Bureau, "One of the federal requirements for importing these vehicles is to swap the Canadian odometer [in kilometers] for a U.S. one [in miles]. The registered importer certifies that he has correctly converted the actual kilometers to miles, but what's to prevent him from intentionally making a mistake?" As Edmunds.com True Market Value® pricing tool at http://edmunds.com/tmv/index.html indicates, lower mileage vehicles sell at higher prices.

Thanks to a weak Canadian dollar, free trade agreements and differences in sticker prices of thousands of dollars on near-identical vehicles, the practice of importing Canadian vehicles to the United States has become a multi-billion-dollar business. "It is possible to import a vehicle into the United States legally. Unfortunately, there is no way for consumers to be sure the vehicle has been imported correctly, and what seems to be a good deal for all parties involved is often riddled with issues that can turn an attractive vehicle purchase into a nightmare for consumers," reported Mello.

Investigators offered these preventative tips for consumers purchasing a used car or a "near-new" or "demo" vehicle:

  1. Make sure the speedometer and odometer are in miles, not kilometers.
  2. Look for a label on the driver-side door or door jam displaying a Maple Leaf and/or stating that the vehicle was imported from Canada via a registered importer. (Note, however, that this may simply indicate that the vehicle was manufactured in Canada for sale in the U.S.)
  3. Check the vehicle's paperwork, including auction invoice, car jacket or warranty report, for any notations that the vehicle was repaired in Canada and/or imported.
  4. Obtain Vehicle Identification Number (VIN) reports from your dealer's service department and an independent vehicle history provider such as Carfax.com. If any repair work was done in Canada, or if the report has language such as "Vehicle inspected. Found to meet U.S. highway safety specifications," it is likely to be a gray market car.
Mello's complete article can be found at http://www.edmunds.com/advice/specialreports/articles/64615/article.html.

About Edmunds.com, Inc.
Headquartered in Santa Monica, CA, Edmunds.com is the Internet's pioneer and leader in providing free, third party automotive information, tools and services for consumers. Edmunds.com empowers, educates, and engages visitors by providing them with straightforward information on all aspects of buying, selling, and owning a vehicle. Edmunds.com True Market Value® products inform the general public of the actual transaction prices of cars and trucks while Edmunds' PowershopperSM offers car shoppers the opportunity to research and pursue online and offline purchase options in an informative, consumer-friendly environment. Visitors are also provided extensive automobile reviews, current incentives and rebates, consumer advice, safety information, auto show highlights and the Town Hall automotive community. Many of these resources are powered by Edmunds Data Services, which provides a comprehensive automotive data set to the Edmunds.com Web site and licenses its data, content and tools to third parties. Edmunds.com was named "best car research" site by Forbes ASAP, is viewed by consumers as the "most useful Web site," according to the J.D. Power and Associates 2001 New Autoshopper.com StudySM*, was ranked number one in the Survey of Car-Shopping Web Sites as reported by The Wall Street Journal, and was named as one of Yahoo! Internet Life's 50 Most Incredibly Useful Sites and one of Money's 50 Most Useful Financial Web sites.

*J.D. Power and Associates is not affiliated with Edmunds.com, Inc. and does not endorse Edmunds.com or any other Web sites.

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