Will new car price increase significantly in Canada due to weak currency?

[oz388]

Please let me know your thoughts on this topic. I plan to buy a new vehicle in 2017; however I'm worried to see a huge price jump if I wait 1 more year.

[schocker]

I doubt it as cars are big dollar items and if you had a big spike in prices, sales would probably be quite negatively affected. This though is different also than other products as you are not comparing just to the USD but also to the yen/euro/kim jong-oonies(won)

[dirtsniffer]

Well there will probably be a pst by that point so I would say they will be 5% more expensive.

[Christian@IE]

The price of imported items is directly correlated to the exchange rate. It's not just the inflated cost of the product itself that the importer has to deal with, but also transportation and other peripheral costs that may also be in USD.

I can't speak to how dealerships work, but let's assume that the manufactured cost of a vehicle is $20k USD and it's being sold to the dealership for $22k USD, I can't see either the dealer or manufacturer taking the hit on a 15% currency devaluation since it works out to be greater than the margin on the vehicle.

[ExtraSlow]

Christian, the dealers buy the vehicles from the Canadian subsidiary in Canadian dollars.

[killramos]

I think it is going to change what kind of cars and features we get for the same money. But one thing to consider is that there is only so much money to be spent on cars in the country, and for the vast majority of Canadians the US exchange rate has no bearing on that.

So sure they could jack up the prices of cars by an average of 20% to account for FX. They will just sell less cars or drive people to the used/pre-owned market.

I think we will see some increases in base MSRP, but not much relative to FX. But another factor is I bet we see less equipment coming in. One way to cut costs on prices of cars without changing overall sticker prices so much. 2016 "fully loaded" will have less shit than 2015 is what im trying to say ( everyone likes to quote fully loaded costs).

You can also bet we are going to see less models or lines here as well as a cost cutting measure. If the overall margins drop due to higher costs to get the cars in the country you can bet there are going to be some models and lines that don't make the cut.

[Aleks]

Originally posted by oz388
Please let me know your thoughts on this topic. I plan to buy a new vehicle in 2017; however I'm worried to see a huge price jump if I wait 1 more year.

Hard to say. Probably somewhat segment dependent. The same truck trim level MSRP is now $3,000 more compared to when I got it in Aug 2014. It's manufactured in USA so maybe that's why.

[Twin_Cam_Turbo]

Hopefully no but probably yes. I would agree with Killramos on the equipment level per price argument.

[OTown]

Originally posted by killramos
You can also bet we are going to see less models or lines here as well as a cost cutting measure. If the overall margins drop due to higher costs to get the cars in the country you can bet there are going to be some models and lines that don't make the cut.

Most likely this. Its probably the only real way automakers can keep prices as they are while still maintaining inventory.

[SilverRex]

as far as I can tell, prices will be affected but it wont be an over night thing, it will be gradual.

[masoncgy]

Who knows... appliances are going up in price big time and they have been for the last year or so, coinciding with the big drops in the Canadian dollar... so I would expect this to spill over into the new car market if it hasn't already.

[holden]

I heard Rolex is going to increase their prices in Canada due to the currency next month. Some of those watches are worth as much as a car.