Tire Prices: USA vs Canada

[javacontour]

I guess I have to ask how they would know you had new tires when you come back into Canada?

I guess they can suspect it, but do they really even look that closely?

What about NAFTA? I was under the impression that NAFTA was just that, a free trade zone. Guess that doesn't apply to the Canadian consumer.

 

[Rolla07]

Originally Posted By: javacontour
I guess I have to ask how they would know you had new tires when you come back into Canada?

I guess they can suspect it, but do they really even look that closely?

What about NAFTA? I was under the impression that NAFTA was just that, a free trade zone. Guess that doesn't apply to the Canadian consumer.


if you keep your old tires in the trunk id suppose it looks suspicious..
2 nights in the usa allows me to bring back 700 in purchases. if product is made in canada or usa
maybe mexico..(not sure) its only taxable upon re entry to canada. if its made anywhere else
you get dinged with duty charges, typically 30%. aka clothing (made in china) so 14.5% taxes and 30% duty...
there r ways around it best bet buy USA or CDN made stuff.

 

[javacontour]

They are trying that sort of thing in IL.

From the IL-1040 instructions

Quote:

What is Illinois Use Tax?
Illinois Use Tax is a form of sales tax that you, as the purchaser, owe on items that you buy for use in Illinois. If the seller does not collect this tax from you, you must pay the tax to the Illinois Department of Revenue (IDOR). The most common purchases on which the seller does not collect Illinois Use Tax are those made through the internet, from a mail order catalog, or when traveling outside Illinois.

When must I pay Illinois Use Tax to IDOR?

You must pay Illinois Use Tax to IDOR if
- the items you bought are taxable in Illinois,
- you used or consumed these items in Illinois, and
- when you purchased the items you either
- did not pay any sales tax to the seller,
- or paid sales tax at less than Illinois’ Use Tax rates of 6.25 percent for general merchandise and 1 percent for food and drugs.

For example, if you purchased

- a computer over the internet for use in Illinois and paid no sales tax, you owe 6.25 percent Illinois Use Tax.

- jewelry while vacationing in Georgia upon which you paid
4 percent sales tax and which you brought back to Illinois, you will owe Illinois Use Tax on the 2.25 percent difference in tax rates.

- cheese by mail order from a company in Wisconsin and paid no sales tax, you owe 1 percent Illinois Use Tax.



They want their cut if you pay less than the IL rates, but no credit if you pay more.

Can't wait to escape from IL.

 

[PandaBear]

If you drive your vehicle to US and have tires installed, I doubt they can do anything about it unless they measure every trend on your tires upon exiting.

Singapore has a law that mandate every vehicle leaving into Malaysia to have a full gas tank, but you just can't do that with tires.

 

[Garak]

Originally Posted By: javacontour
What about NAFTA? I was under the impression that NAFTA was just that, a free trade zone. Guess that doesn't apply to the Canadian consumer.

It does, but only to a point. If the tires were manufactured in the U.S., Mexico, or Canada, one could import them into Canada duty free for personal use. Of course, GST and provincial taxes are another matter. I've ordered a variety of things online, and I've only been hit on German made car parts.

 

[zzyzzx]

Originally Posted By: dparm
"Canadians are used to paying more"

...am I reading that as "we'll just continue to take advantage of people?"



That's pretty much how I interpreted it. Either that or that's how they pay for their socialized medicine.

 

[Garak]

Originally Posted By: zzyzzx
That's pretty much how I interpreted it.

Many of us grew up during the time when one of our dollars bought around sixty-five U.S. cents. That, more than anything else, conditioned us to paying more for products than our American neighbours. When our dollar was sixty-five cents, I could understand paying $9.99 for a $6.99 U.S. paperback, or $50 for tires that could be had in the States for $30.

Now, our dollar is similar in value to the U.S. dollar. With the internet and online shopping, it's also much easier to compare prices and even order from the States.

Brick and mortar stores up here are often too complacent. The alternator adjuster bolt for my old Audi was somewhere around $12 from the dealer here, with a two week waiting period (they had to order from the States). I got an OEM one from an online Canadian source for $1. A U.S. source probably could have beat even that price. NAPA Canada wants around $10 for a Bosch 3300. WM wants $7. My online sources up here are under $5, and even less from a place like Rock Auto.

 

[SubLGT]

".........The Tire Dealers Association of Canada (TDAC) recently reported that the Senate Committee on Finance has confirmed the TDAC’s findings that discriminatory “country pricing” by tire manufacturers is forcing tire consumers across Canada to pay anywhere from 30-50% more for the same tires selling in the US................................"If a Canadian retailer buys wholesale tires from a US wholesale distributor rather than through the manufacturer’s Canadian sales division, both the Canadian retailer and the US distributor have their supplies of tires cut off by the manufacturer.'

http://www.autosphere.ca/tirenews/2013/02/18/tdac-tackles-canadausa-tire-price-discrepancies/

 

[Garak]

And they wonder why people go to the States to get tires or order them from there. The nice thing about NAFTA is that if I buy automotive parts for personal use from the States and they were made there (or in Mexico or Canada), they come across duty free. Perhaps someone needs to file a NAFTA complaint about this tire nonsense. That's the whole point of NAFTA after all.

 

[CapriRacer]

You would think that the "Law of Supply and Demand" would correct this situation. Even if the tire manufacturers arbitrarily inflate tire prices to Canadian distributors, US based distributors would be able to supply tires at a lower price - and that would force the price down.

So why doesn't that work?

It makes me suspect there is some other thing going on that is driving up the price.

 

[Garak]

I'd suspect that certain places closer to the border (i.e. Toronto and the vicinity) might have better prices than certain other locations. At least over the last number of years, there's no shortage of competition, at least. There are tire shops all over the place, and several non-traditional places are getting involved in the tire business. But, things are still way too high.

 

[PandaBear]

Originally Posted By: CapriRacer
You would think that the "Law of Supply and Demand" would correct this situation. Even if the tire manufacturers arbitrarily inflate tire prices to Canadian distributors, US based distributors would be able to supply tires at a lower price - and that would force the price down.

So why doesn't that work?

It makes me suspect there is some other thing going on that is driving up the price.


The law of supply and demand always have a lag and overhead that prevent everything from being truly equal.

This is also the reason trickle down or trickle up economy works on paper but not in real world.

 

[CapriRacer]

Originally Posted By: PandaBear
Originally Posted By: CapriRacer
You would think that the "Law of Supply and Demand" would correct this situation. Even if the tire manufacturers arbitrarily inflate tire prices to Canadian distributors, US based distributors would be able to supply tires at a lower price - and that would force the price down.

So why doesn't that work?

It makes me suspect there is some other thing going on that is driving up the price.


The law of supply and demand always have a lag and overhead that prevent everything from being truly equal.

This is also the reason trickle down or trickle up economy works on paper but not in real world.


There may also be something peculiar about the Canadian market. I wonder if the low volume of sales has anything to do with it.

Put a different way: I can easily imagine that tire shops near the US border get heavy pressure, but as you move away from the border, that might quickly dissipate - and it's that segment of the market that drives the pricing structure.

I would also think that maintaining a tire shop in remote areas would be more costly than in the metro areas. I know I've experienced that in certain parts of the US for things other than tires.

And one last thought: I know that the Canadian tire business is all about winter tires - which are generally priced with a premium. Could it be that this is what is driving the pricing?

 

[Garak]

Well, in some of the remote areas, they'll certainly have less overhead. But, they're not likely to do the volume or face the competition to bring prices down.

In any case, pricing disparity between the U.S. and Canada goes to a lot of things, and there have been many investigations and complaints about it. The only things up here that is "sensibly" priced in that respect is gasoline. When one compares the average U.S. prices (after taxes are taken off) to Canadian prices (after our higher taxes are taken off), we are pretty close. But, when you look at "regular" prices on oil, they're ridiculous. Books are far too expensive up here. Heck, look at any paperback and compare the U.S. and Canadian pricing.

There are some improvements, generally speaking, if something is readily available online and can be ordered relatively easy from the States. The Canadian sources don't want to be totally priced out of the market. So, online car parts in Canada usually aren't too bad.

 

[IndyIan]

Originally Posted By: SubLGT
".........The Tire Dealers Association of Canada (TDAC) recently reported that the Senate Committee on Finance has confirmed the TDAC’s findings that discriminatory “country pricing” by tire manufacturers is forcing tire consumers across Canada to pay anywhere from 30-50% more for the same tires selling in the US................................"If a Canadian retailer buys wholesale tires from a US wholesale distributor rather than through the manufacturer’s Canadian sales division, both the Canadian retailer and the US distributor have their supplies of tires cut off by the manufacturer.'

http://www.autosphere.ca/tirenews/2013/02/18/tdac-tackles-canadausa-tire-price-discrepancies/

This is the real reason tires cost more in Canada, basically price fixing. Our reasonable labour laws and some extra taxes may add 5-10%, but the rest of the extra cost makes no sense, especially for tires made in Canada...
I'm searching for snow tires for the Focus and the only tires that seem to have comparable prices to the US is the Chinese brands, which I am seriously considering, partially because of the savings, but also on the principle of not getting ripped off.

 

[Ken2]

Be wary of warranties when cross-border shopping. Expect the manufacturer to support their dealers in each country by limiting the warranties to the country of purchase, except perhaps for real travelers, not DIY importers.

 

[Smokescreen]

Comparing Costco.ca vs Costco.com on a set of Michelin Defenders for the LeSabre...USA is a whopping $92 cheaper. Not even worth driving across the border for.

 

[Garak]

Originally Posted By: Ken2
Be wary of warranties when cross-border shopping.

Ha! You have to be wary of warranties when buying locally. My Michelins require an actual tire shop or professional garage to do my tire rotations to maintain warranty. Like I'm going to pay someone to do that. Most warranties also are gone the second a patch is used. Try going anywhere near the lifespan of a set of tires without at least one patch on one tire.

In all my years of driving and running a fleet, the only warranties that were ever worth the paper they were printed on were the road hazard warranties. As far as tire warranties go, I find them utterly useless.

 

[CapriRacer]

Originally Posted By: Garak
Well, in some of the remote areas, they'll certainly have less overhead.........


Actually I was thinking the reverse. If you have a tire shop that has many bays and there is a constant stream of customers, that's a pretty efficient setup. But a tire shop with 2 bays and not a lot of customers isn't very efficient, so the cost per tire would be higher.

But I don't think that plays out. As has been pointed out, the tire dealer organization has filed a complaint - so that means THEY see differences. Again, I just wonder why those dealers don't buy from US distributors rather than through Canadian ones. Surely the large distributors in the US would see an opportunity and take advantage of it.

That's why I think there is something else going on.

 

[Garak]

Well, in the remote areas, the tire shops are not exactly the picture of the latest technology. They also tend to do other things besides tires, of course. Their other advantage, at least in this province, is they do get a reasonable stream of agricultural equipment business, that a normal "in town" tire shop wouldn't be as readily able to handle.

Heck, in some of these small towns, you can buy the property for less than two months' rent on the same property in the city.

But you are right. Something needs to be done. Up here, I expect Nokian, for example, to be a little more expensive, simply because they're a little tighter on their distribution. But just about anything else can be bought anywhere else.