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Here’s a puzzle for you: many cars seem to cost less in Canada. And this isn’t some accident of the current exchange rate between the U.S. dollar and Canadian dollar, because it’s been a fact for a while.

One year ago, reddit user “OnlyFAANG” pointed out that their C8 Corvette was $11k USD cheaper when they bought it in Canada. Here are the specifics: “My C8 corvette as specced is about 115k CAD, which is about 84000 USD. The same car specced on the USA site is about 95000 USD.”

The poster wondered if the difference was due to a volatile foreign exchange rate. But there’s more.

A truck drives toward the Rocky Mountains in Canada
Canadian road trip | R.M. Nunes via iStockPhoto

In December 2023, Reddit user “ubiquitoussense” did a deeper dive on price differences. Here are several examples they listed:

Toyota Corolla LE

  • US MSRP:$21,900
  • Direct conversion to Canadian: $29,200
  • Canadian MSRP: $27,165

Toyota GR86

  • US MSRP: $28,400
  • Direct conversion to Canadian: $37,866
  • Canadian MSRP: $34,704

Acura TLX Type S

  • US MSRP: $57,000
  • Direct conversion to Canadian: $76,000
  • Canadian MSRP: $66,478

BMW 240i xdrive

  • US MSRP: $ 51,700
  • Direct conversion to Canadian: $68,933
  • Canadian MSRP: $63,550

Lexus LC

  • US MSRP: $ 99,050
  • Direct conversion to Canadian: $132,066
  • Canadian MSRP: $112,425

Ford Mustang GT

  • US MSRP: 42,495
  • Direct conversation to Canadian: $56,660
  • Canadian MSRP: $50,695

Porsche 911 GT3

  • US MSRP: $185,850
  • Direct conversation to Canadian: $247,800
  • Canadian MSRP: $231,259

Note that not every car costs less in Canada. For example, you’ll pay about the same amount for a Range Rover SE ($143k). And while the Mustang GT seems to be marked down in Canada, the Ecoboost version is priced competitively.

So what’s going on here? Internet sleuths had many theories. The most upvoted comment suggests that Canadians simply couldn’t afford prices U.S. buyers pay, and automakers know it.

“They are forced to price as much as the market can bear. As Canadians on average are poor AF compared to Americans in terms of income…if the auto manufacturers raised the price, we simply couldn’t dig deep enough to buy new cars.”

/u/diligent_Bit3336

Other commenters specified that while Canadians make less, they usually also spend less because most goods are priced accordingly:

“On average Canadians make about 10% less than Americans if you convert, and about the same if you look at the value of 1 CAD within Canada. It explains the car pricing gap between the currency conversion and what you see: the value of 1 CAD within Canada is closer to 0.9 USD in America not 0.75 USD. However, the top percentile (like top 10%) of earners can make like double or more in the US. That’s where Americans have much stronger buying power.”

/U/RS50

I did a bit more research and compared the prices of other goods that are sold in both countries:

Apple iPhone 15 Pro

  • US MSRP: $999
  • Direct conversion to Canadian: $1,334
  • Canadian MSRP: $1,449

Samsung Galaxy Z Fold 5

  • US MSRP: $1,799.99
  • Direct conversion to Canadian: $2,403
  • Canadian MSRP: $2,399.99

McDonald’s Big Mac

  • US Price: $5.15
  • Direct conversion to Canadian: $6.88
  • Canadian Price: $6.75

So Canadians may be paying a bit extra for Apple products, but are paying the exact same for Samsung products as folks in the U.S. And while the Big Mac varies around the world, it looks like Canadians and U.S. diners are paying the same. So why are automakers reducing the cost of certain models?

Another theory is the number of car parts that are made in Canada. And it’s true that the V8 in the Mustang GT, for example, is built in Canada. But it is shipped across the river to Detroit for the car’s assembly and the complete car then must be exported to Canada. So I doubt this is the reason Canadians are being charged less.

For now, it’ll have to remain a mystery. But if you are dreaming of picking up a cheap car in Canada and driving it to the U.S., know that you can’t legally import most vehicles until they are 25 years old.

In the meantime, enjoy a bit on what might be keeping your truck from turning over from the fantastic Canadian sitcom, Letterkenny:

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Staff Writer

Henry Cesari

Henry Cesari joined MotorBiscuit in 2021 and brings his deep interest in vintage cars, trucks, and motorcycles to the site. Having restored his first classic car at just 16 years old, Henry has wrenched on everything from overland campers to Japanese motorcycles and even pre-war Bugattis. Henry is also an avid attendee at local car shows and genuinely enjoys connecting with fellow auto enthusiasts.

Henry earned a Bachelor’s in Anthropology and English from the University of Vermont. He has since incorporated his love of the written word with his admiration of classic cars. While Henry is interested in vintage cars, he believes the golden age of cars is yet to come. He is confident journalists will play an important role in this revolution by exposing the industry as it is now and envisioning its possible future.