The Canadian Dollar was beat up last week…no question about it. The worst 5 day drop since 1971 signals the end of cross border vehicle sales…..or does it?

The disparity between US made and Canadian dealership prices is still as pronounced and is moderately lessened by a weaker loonie, but the benefit is still unavoidable. The big change in the vehicle sales world came on the announcement of leasing changes by the “big 3″. With the option to lease “more vehicle for less money” that was previously available now a thing of the past, buying a car, truck or SUV in the US has in fact become more attractive for many. Please consider this report, and respond if you have a contrary opinion.

Vehicle buying and selling in Canada is about to change after GM and Chrysler LLC signalled to dealers last month that their finance units will pull back on the subsidized lease rates they’ve been offering for years. BMW AG, which derives 60% of its Canadian sales through leases, is also back-pedalling on leases somewhat by offering a wider variety of purchasing options.

And Ford Motor Co. disclosed yesterday that its lending arm is planning to cut leasing of vehicles, although a Ford official said there will be no change in lease offerings in Canada.

The reason for the retreat is clear: The price of used vehicles has tumbled in recent months in the United States and Canada. That, along with credit-market pressures, has made leasing less economical for automakers than in the past. In particular, the value of large SUVs and pickups that drivers return to dealerships after their leases are over is now far less than expected, forcing the automakers who own them through their finance arms to set aside hundreds of millions of dollars in provisions against the declining residual values. Ford Motor Co. wrote down the value of its Ford Credit leased-vehicle portfolio by US$2.1-billion in its latest quarter.

nvanpraet@nationalpost.comFamily Man, Page FW4

Tags: Importing Vehicles From US //