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Car Dealer Launches Lawsuit Claiming Unfair Fees on Vehicles Purchased in the U.S.

By Bruce Constantineau, Vancouver Sun

VANCOUVER - A Vancouver car importer has filed a lawsuit against several major automakers, claiming they artificially inflate prices for Canadians wanting to buy vehicles in the U.S.

Westport Motor Cars Ltd. says manufacturers clearly want to discourage cross-border car shopping by charging "unreasonable fees" for modifications required to make the vehicles comply with Canadian standards.

Westport owner Todd MacDonald said BMW, for example, has added new measures required before its U.S.-sourced cars can be driven in Canada - including changing speedometers to highlight kilometres per hour instead of miles per hour and changing modules to read Celsius instead of Fahrenheit.

He said the time-delaying modifications can cost up to $5,000.

"These measures are a crock," MacDonald said in an interview. "I've finally had enough and that's why this [lawsuit] is happening."

He said Mercedes-Benz has told him that certain models of its 2008 cars sold in the U.S. cannot be brought across the border because they don't comply with Canadian standards.

"They say they're not sure what work is required to make them comply with Canadian standards or if it's even possible to convert the vehicles," MacDonald said.

Defendants in the suit include the Canadian divisions of Mercedes-Benz, BMW, Volvo, Toyota, Hyundai, Subaru and Mitsubishi. Other car manufacturers are expected to be added as defendants in the future.

The case is similar to a class-action lawsuit launched in Ontario but MacDonald's lawyer, Rory Lambert, said the Ontario case alleges Transport Canada conspired with manufacturers to boost prices while the B.C. case does not. The B.C. lawsuit was filed in Victoria last month.

Lambert is seeking court approval to have the lawsuit become a class-action suit and he expects to receive that approval by June.

In a statement of claim filed in B.C. Supreme Court, Westport said vehicle manufacturers have engaged in several unfair practices to discourage cross-border shopping, including:

• Requiring modifications that were previously unnecessary.
• Charging unreasonable fees for modifications.
• Refusing to honour warranties in Canada on U.S.-sourced vehicles.
• Prohibiting the sale of new U.S. cars to Canadian citizens.
• Forcing importers to undergo unnecessary or unreasonable vehicle inspections.
• Blacklising importers with a history of importing vehicles to Canada.

B.C. car dealer representatives would not comment on the lawsuit. But in an interview last year, New Car Dealers Association of B.C. president Glen Ringdal said vehicle price differences between the U.S. and Canada appear to be the greatest in the luxury car market.

"On the traditional cars that most of us buy, the price difference has been narrowing significantly, certainly during the past year," he said.

Lambert said Canadian car prices have declined by an average of about seven per cent this year, but feels that still isn't enough.

"Where does seven per cent get you when you're looking at price differences of 33 per cent [between vehicles sold in Canada and the U.S]?" he said.

Lambert said a 2008 Honda Element that sells for $18,980 in the U.S. has a suggested retail price of $25,290 in Canada - 33 per cent more than the U.S. price.

He said one Vancouver-area buyer in the process of buying a Volvo vehicle in the U.S. and bringing it to Canada has been told he has to pay about $1,900 for a Canadian Volvo dealer to inspect and certify the car for use in Canada.

Lambert said Canadians who feel they paid too much to import a U.S. vehicle to Canada can find out more information about joining a possible class-action suit by going to www.UCanImport.com.