Low Canadian dollar boosts sales of used Canadian vehicles to Americans
Customers could get an extra $3K to $5K when trading in a truck or SUV, according to Nova Scotia dealership
The low Canadian dollar is helping used car owners and dealerships get thousands of dollars more for their vehicles as eager Americans snap them up.
"It's definitely helped our business," said Peter Simmons, the president of Valley Ford in Kentville, N.S.
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He said January and February are generally the slowest months for sales, but this year he had a "fantastic used car month."
Simmons said that jump in business is due to Americans buying used Canadian cars at higher prices. They know they'll save about 30 per cent on every dollar they spend because of the exchange rate.
"It's an opportunity for them to probably, at the end of the day with the dollar, pay way more than what we would consider. But yet by the time it lands there, they're still getting it at a discounted rate in their eyes, by the time they do the conversion," said Simmons.
On Thursday, the Canadian dollar was worth 73 cents US.
Big demand for trucks and SUVs
Used trucks and SUVs are in high demand, according to Simmons. He said Americans are willing to pay 10 to 20 per cent above the average price for those vehicles.
That means extra money for the dealership. In turn, the dealership hands over more money to customers who trade in their vehicles.
"We're probably talking anywhere, depending on the value, anywhere from $3,000 to $5,000 or even higher depending on the unit. Obviously some are worth more than others."
Simmons said his dealership has been selling eight to 10 trucks a month to Americans since the dollar bottomed out, either directly or through auctions.
The new sales have brought in thousands of extra dollars to Valley Ford, but Simmons is waiting on numbers to determine exactly how it's affecting his bottom line.
Sellers use auctions to reach U.S. buyers
ADESA Halifax runs wholesale car auctions once a week.
"On certain segments it seems like right now that there's definitely demand on domestic vehicles, trucks and SUVs," said James Murphy, the company's acting general manager.
He said it's hard to tell exactly where those vehicles are going once they're sold, since big buyers in Montreal and Ontario are simply purchasing more cars.
"We've heard that there's a lot of exporting going on in those markets, but it's really challenging for us to know what level of it is being purchased here is being exported, versus just staying in the local market."
Simmons said he's seen enough to start a new advertising campaign at Valley Ford aimed at bringing in more people willing to trade in their used trucks and take advantage of the low Canadian dollar.
"Maybe that will help create a little transparency in the process and help our customers see kind of what's going on behind the scenes and maybe get a few more visitors at our front door."