Want to save thousands on a BMW? Head south to Chapman BMW Phoenix

April 25, 2011 - PRLog -- When the Toronto certified financial planner pulled in to talk to a customs officer, he probably had a few more purchases to come clean on than your average Canadian returning from a visit to the U.S. He had just bought a BMW while visiting his in-laws in Phoenix,AZ — and saved a few thousand dollars.

“We pretty much only buy our [major] goods down in the U.S. We have to buy our daily living stuff while in Canada but anything like electronics, clothes or any special stuff we do it down there,” says Chapman BMW customer, who along with his wife and daughter turn vacations into heavy but judicious spending.

And why not? The data is clear that Canadian consumers can save major bucks if they head south of the border to buy their goods.

A Bank of Montreal study released this month looked at a basket of goods and found on average Canadians were spending 20% more here on the same items that could be found stateside. With the dollar at par and now above, the discrepancy is clear.

Canadians have figured it out because spending in the U.S. has lurched ahead over the last year, according to Visa Canada. The credit card company says visitors spent $9.2-billion in the U.S. in 2010, more than triple of any other nationality, and an 18% jump from 2009.

As Mr. Wiginton found out, the savings can be huge when you get to the big ticket items.


As a financial planner, Mr. Wiginton said it’s easy to justify a vacation that includes a shopping expedition for major purchases like a computer and stocking up on clothes. Make it part of a vacation and you can take advantage of the $750 personal tax exemption every Canadians gets if their visit is longer than seven days.

“Always declare everything. It’s just not worth the hassle. If you say nothing, they are just going to search your car and you’re going to be in a lot of trouble. Most of the time they don’t even ask you to pay duty,” says Mr. Johnson, who declared $2,900 in goods on his last trip and paid no tax because the custom’s officer just didn’t care.

Canada Border Services Agency, which is responsible for administering duty, won’t offer any clues on whether there is any rhyme or reason as to who gets stopped. “The CBSA will not speculate,” said spokesperson, Esme Bailey, in a email.



If you don’t want to figure out the red tape yourself, there are plenty of car brokers who will help you bring a vehicle across the border with the help of Chapman BMW on Camelback. Even with the broker charge and potential duty there is savings leftover, says Viraf Bailwalla, owner of Automall Network Inc

“The pricing in the U.S. for higher end vehicles is just lower than comparable Canadian vehicles,” says Mr. Bailwalla. “Look at a BMW, even after paying 6.1% duty, you are still saving $10,000 to $12,000.”

He says you can buy a car on your own but you’ll have to deal with some issues like registering your vehicle and making sure it conforms to local standards, which might include something like installing running lights.


Doug Porter, chief economist of Bank of Montreal, notes there was time when the opposite was true and Americans were heading up here for deals on cars. Much of trend to shop in the U.S. is driven by the value of the currencies -- when the Canadian dollar is strong, we head south.



Beyond just currency issues, Mr. Porter says part of reason for price gaps can be related to fixed costs. Retailer costs don’t fluctuate as quickly so it’s harder for them to move their prices and remain profitable.

“Consumer prices just don’t change as quickly as the exchange rate,” says Mr. Porter.

But Canadian consumers don’t care and can quickly shift gears, an ability that has grown stronger in the Internet world where they can easily compare prices and scratch their heads about why a gas barbecue on homedepot.ca is listed at $1,999 when the same barbecue at homedepot.com in the U.S. is $1,799.

Some Canadians have taken to opening personal accounts with United Parcel Service of Federal Express to expedite their purchases. UPS says by providing a credit card with an account, customers are able to better assess what the charges will be for their purchases.

www.azbmw.com

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