Canada boasts a variety of exclusive attractions, making it a popular destination for the entire world. Whether it’s Niagara Falls, Banff National Park, or The Notre Dame Basilica, Canada’s extensive roster of wonders have always attracted global attention and acclaim.
Oddly enough, one of Canada’s latest and greatest global attractions is its premiere used car industry. Americans have, for several years now, flocked to our nation in pursuit of a great deal on a used car. Grasping this phenomenon, and charting its development, is a critical task for understanding the Canadian used car industry at large. To help sift through this international craze, here’s a brief rundown of how Canada became a hot spot for Americans to buy used cars.
Good News From Bad News
Let’s start by broadly talking about Canada’s economy. In the global open market, there is a system of near perfectly organic checks and balances. Our global economy doesn’t always exactly equalize, but in general, periods of economic decline are followed by inverse periods of prosperity. But sometimes, certain states of decline happen in tandem with entirely separate states of prosperity.
Currently the value of the Canadian dollar is diminishing in the wake of several decisions made by international political agents. However, the Canadian economy is an overall boom for the first half of 2017. How is this possible?
While the national employment rate, and as a result, national output rate has increased, so to has the strength of the Canadian economy. But security concerns about the Canadian housing market and potential US imposed trade sanctions have kept the value of the loonie in the gutter. So to stay competitive globally, The Bank Of Canada wants to keep the loonie low because it increases the value of Canadian exports and labor in the international market.
However, keeping the value of Canada’s currency low does mean that goods are more costly for Canadian businesses and consumers. This consumer burden is the state of decline to the simultaneous state of prosperity that is Canada’s stronger global competitiveness. And it is this exact economic situation that makes Canada’s used car industry so much more appealing to Americans.
The American Used Car Migration
Over the past few years the Canadian used car industry has been thriving, with around 60% of annual vehicle sales spawning from used car transactions (according to DesRosier Automotive Consultants Inc.). So again, here’s an economy that’s booming within Canada, while the national currency is in overall decline.
This says to American used car customers that Canada is the place to be. Not only is their currency currently worth more than Canada’s but the Canadian used car industry is booming, meaning that good deals are available for anyone. This means that Americans can double down on perks, buying from a used car economy that’s better than theirs, while using a currency that’s worse.
Think about in terms of the global economy. If labor and output is more abundant in Canada, due to it’s thriving employment rate, then by the law of supply and demand, the cost of labor will be less. Add to that the fact that the Canadian dollar is currently in a downslide, and now international companies looking for cheaper labor can buy that cheaper labor for even less.
Now apply the same principle to Canada’s used car industry. The cost of a used car is down because the Canadian used car economy is doing well. Add to that the fact that the Canadian dollar is down, and you can see why Americans looking for cheaper used cars can buy that cheaper used car for even less.
International industry and currency economics can be dense and difficult subjects to unpack. Simply put, when a specific industry’s value is up, costs go down. Additionally, when a specific national currency goes down, the value of foreign currency goes up. This creates a perfect storm for international buyers to pick up low prices while being backed by a higher valued currency.
This is what’s happening in the Canadian used car industry! American’s are flocking to Canada to swoop up these exponential savings, but they aren’t the only ones who stand to benefit.
Whether you’re Canadian or American, everyone can take advantage of the savings you can find at dealers like Ridetime. Ridetime offers great deals on top-notch cars, and ensure that everyone benefits from this industrial anomaly. Don’t miss your opportunity to make a revolutionary investment. Buy your next used car from Ridetime soon, and watch your jaw drop at the savings