f.pier
Posts: 1405
Joined: Fri Aug 25, 2000 2:50 am

Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:07 am

A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here.....
 
aerobalance
Posts: 4308
Joined: Sat Sep 23, 2000 8:35 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:11 am

Yea, why is that?

"Good post Jim!",
"Sing a song, play guitar, make it snappy..."
 
dtwclipper
Posts: 6668
Joined: Wed Oct 29, 2003 3:17 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:14 am

Quoting F.pier (Thread starter):
A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here.....

Taxes and Labour and Taxes!
Compare New York Air, the Airline that works for your Business
 
andessmf
Posts: 5689
Joined: Wed Jan 25, 2006 8:53 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:20 am

Quoting Dtwclipper (Reply 2):
Taxes and Labour and Taxes!

Plus you also have import fees, tariffs, and additional transportation costs for exportation.
 
dtwclipper
Posts: 6668
Joined: Wed Oct 29, 2003 3:17 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:23 am

Quoting AndesSMF (Reply 3):
Plus you also have import fees, tariffs, and additional transportation costs for exportation.

Sorry, I meant that in Europe you pay higher taxes on your cars then we do here.

Also, your labour costs are higher.

Many "imports" are now built here, so we avoid most of the "Import Fees".
Compare New York Air, the Airline that works for your Business
 
andessmf
Posts: 5689
Joined: Wed Jan 25, 2006 8:53 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:43 am

Quoting Dtwclipper (Reply 4):

I understood the original intent of your post, so we are in agreement over this. Remember that also if the cars are imported, they tend to come from Canada or Mexico.
 
NeilYYZ
Posts: 2443
Joined: Mon Jan 23, 2006 12:55 pm

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:48 am

Quoting AndesSMF (Reply 5):
I understood the original intent of your post, so we are in agreement over this. Remember that also if the cars are imported, they tend to come from Canada or Mexico.

With GM/Ford killing all of our plants that might not be the case for long  Wink Although Toyota is making a ton of plants in Ontario.
It may be too early to drink scotch... But it is NEVER too early to think about it...
 
Superfly
Posts: 37735
Joined: Thu May 11, 2000 8:01 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 3:57 am

Quoting NeilYYZ (Reply 6):
With GM/Ford killing all of our plants that might not be the case for long

The Saint Thomas plant in Ontario will increase production next year now that the Town Car will be produced out of that plant.
Bring back the Concorde
 
Klaus
Posts: 20594
Joined: Wed Jul 11, 2001 7:41 am

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 4:28 am

American prices are without sales tax, european prices are usually including VAT. Warranties are different, standard equipment vs. added features may differ and the markets are very different. American car manufacturers have already almost ruined themselves by undercutting each other, so price pressure is higher.
 
ltbewr
Posts: 12391
Joined: Thu Jan 29, 2004 1:24 pm

RE: Why Cars Are So Cheap In The US?

Tue Oct 03, 2006 4:29 am

There are number of reasons:
Purchase Taxes: Most countries may have National sales taxes of 12-30% on cars. In the USA, the prices you see for cars do not include State sales taxes which may be none to 8.5%, but even at 8.5%, a lot lower than most countries.
Competition and advertising: The large number of brands and models available including imports and Foreign brand cars made in the USA along with heavy price advertising encourages lower advertised and Suggested Retail prices.
Lower labor costs: Yes, USA based, unionized companies have tremendous retirement benefits costs that most companies outside the USA and Toyota, Nissan and others don't have within the USA (not UAW plants). We have much more labor flexibility than in the EC. BMW operates a non-union plant in South Carolina so 3-series models will have much lower labor costs than when made in Germany.
Lower component cots. We have more flexibility with outside suppliers of major and minor parts, and including their manufacturing in Mexico, Brazil, China, elsewhere in Asia so lower costs there.
Dealer competition: Within the USA, there is a lot of competition from dealer to dealer for each brand of dealers or of competing brands and models. Except for models in limited supply and high demand, almost all cars are sold below Suggested Retail prices, so lower costs as well. In the EC, you don't have as many dealers, less shopping around for price.
 
VC10BOAC
Posts: 387
Joined: Wed Feb 04, 2004 2:11 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 2:58 am

Quoting F.pier (Thread starter):
A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here

I have wondered the same thing. My 2004 BMW 525i costs about the same as the 320 you mentioned, including taxes. Labor cannot be a factor since it was made in Germany

[Edited 2006-10-03 20:00:32]
 
777DadandJr
Posts: 1484
Joined: Wed Feb 09, 2005 7:37 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 4:20 am

Quoting LTBEWR (Reply 9):
BMW operates a non-union plant in South Carolina so 3-series models will have much lower labor costs than when made in Germany.

But the 3 series is not built in South Carolina. I believe that the Z3 was, now the Z4, and the X5 are built in SC.

Russ
My glass is neither 1/2 empty nor 1/2 full, rather, the glass itself is twice as big as it should be.
 
User avatar
falstaff
Posts: 5575
Joined: Sun Jun 25, 2006 6:17 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 4:26 am

Some states, like Missouri, have personal property tax that you pay every year on a car, motorcycle, boat etc. Also sales tax is due when you register the car even if your are making payments.

In other states, like Michigan and Ohio you can roll the taxes into the payment on the car. Then you pay a license fee based on the value (and sometimes weight) of the car.

On used cars you pay sales tax on the selling price, which I always lie about.
My mug slaketh over on Falstaff N503
 
CPDC10-30
Posts: 4681
Joined: Wed Feb 02, 2000 4:30 pm

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 4:43 am

Quoting Klaus (Reply 8):
Warranties are different, standard equipment vs. added features may differ and the markets are very different.

As in the European warranties are much skimpier..at least they are in the UK. I've seen cars with 1 or 2 year warranties, in North America there are very few that don't give at least 3 years comprehensive and 5 years powertrain warranty.

However, it is true that for example ABS is standard on even small European cars whilst it remains optional in North America for the lower end models.

Although new cars are expensive, I find that used cars in the UK are quite a bit cheaper than in Canada...mostly because of the high fuel prices and road taxes that encourages newer, more efficient cars.
 
aerobalance
Posts: 4308
Joined: Sat Sep 23, 2000 8:35 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 5:22 am

Quoting 777DadandJr (Reply 11):
But the 3 series is not built in South Carolina

Correct, my '06 330i was built in Munchen.
"Sing a song, play guitar, make it snappy..."
 
adh214
Posts: 346
Joined: Thu Sep 16, 1999 6:07 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 6:31 am

You are on the wrong path talking labor costs, taxes, fees, etc.

Pricing of cars has little to do with what they cost to produce and everything to do with what the seller thinks they can get.

The net net of this is:

BMW does not think they can get $47,000 for a BMW 3 series in the US. Since very very few Germans will come to the US to buy a BMW, they can price differently in different markets.

Since, I was recently in the market for a car, believe me BMW would have a very hard time selling the 3 series for $47,000. We have too many other cars competing with it such as Lexus, Mercedes, Infiniti, Acura. All of these makers have similar cars available for between $30,000 and $40,000 that compete directly with the BMW 3 Series.

Andrew
 
deltagator
Posts: 6170
Joined: Fri Sep 23, 2005 9:56 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 2:16 pm

Along the same vein I have a question about the Honda Odyssey. I bought my wife one a month or so back and I got a 2006 for about $27,000 USD (no leather unfortunately.) The reason I ask is because I saw new Odyssey's in Australia and Singapore that were much smaller than ours (perhaps based on the Civic instead of the Accord like ours) and when I looked up the price in Singapore they were $100,000 SGD which is about $70,000 USD. What gives with that? Why the huge price differential for a smaller car with the same name?

Quoting 777DadandJr (Reply 11):
I believe that the Z3 was, now the Z4, and the X5 are built in SC.

You are correct. IIRC they are going to expand the plant even more and build a few more model lines there. As a side note the SC Highway Patrol got a bunch of unmarked 5 series as part of the incentive deal to bring BMW to the Upstate.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
checkraiser
Posts: 814
Joined: Mon Mar 14, 2005 1:35 am

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 2:38 pm

The price difference is insane. I bought a new Volvo S60 T5 in 03 and paid $30,850. The same car sold in the UK for a pinch under $50k.


Labor may not be as big of a driving force - but I think Europe's high taxes definately play a part.

Another reason to toss into the equation could be higher dealer costs. A dealer in Europe pays more for everything, from labor to land.

Competition is likely the biggest force at work though. As pointed out earlier, you're never going to sell a 3 series for $47k. While a lot of US/Canadian posters on this forum constantly blast American cars, the fact is their quality has improved drastically over the past five or ten years.
N1120A is a camel-fucking terrorist.
 
UTA_flyinghigh
Posts: 6304
Joined: Wed Oct 03, 2001 8:46 pm

RE: Why Cars Are So Cheap In The US?

Wed Oct 04, 2006 6:23 pm

Quoting DeltaGator (Reply 16):
The reason I ask is because I saw new Odyssey's in Australia and Singapore that were much smaller than ours (perhaps based on the Civic instead of the Accord like ours) and when I looked up the price in Singapore they were $100,000 SGD which is about $70,000 USD. What gives with that? Why the huge price differential for a smaller car with the same name

Singapore is a bit of an exception in Asia, huge taxes are levied on personal transportation in order to promote mass transportation.

UTA  checkeredflag 
Fly to live, live to fly - Air France/KLM Flying Blue Platinum, BMI Diamond Club Gold, Emirates Skywards
 
lehpron
Posts: 6846
Joined: Tue Jul 10, 2001 3:42 am

RE: Why Cars Are So Cheap In The US?

Thu Oct 05, 2006 4:05 am

Quoting F.pier (Thread starter):
Why Cars Are So Cheap In The US?

So people who cannot afford an education can still get a car.
The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
Falcon84
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Why Cars Are So Cheap In The US?

Thu Oct 05, 2006 10:30 am

Nothing cheap about cars from my vantage point. I can't even afford a brand-new sub-compact these days, that run around $12-14,000 to start with.
Work Right, Fly Hard
 
57AZ
Posts: 2371
Joined: Tue Nov 02, 2004 2:55 pm

RE: Why Cars Are So Cheap In The US?

Thu Oct 05, 2006 6:14 pm

Don't forget that many people do not consider the operating cost of the vehicle. Kind of like having an airplane-you have to add the cost of servicings, fuel and insurance to the purchase cost. Fuel doesn't vary significantly from location to location but the insurance does. Moved to Arizona from Tennessee and the insurance rates tripled. In Tennessee I could literally carry commercial vehicle insurance on THREE Jeep Cherokees with the premium payment I pay on my Jeep here. Of course, the risks here are different than in Tennessee-thus the extremely high premium.
"When a man runs on railroads over half of his lifetime he is fit for nothing else-and at times he don't know that."
 
User avatar
KaiGywer
Crew
Posts: 11182
Joined: Sun Oct 26, 2003 9:59 am

RE: Why Cars Are So Cheap In The US?

Fri Oct 06, 2006 1:13 am

Quoting Falcon84 (Reply 20):
Nothing cheap about cars from my vantage point. I can't even afford a brand-new sub-compact these days, that run around $12-14,000 to start with.

Chevrolet Aveo. Starting at $9800 Big grin
“Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, an
 
JJJ
Posts: 2245
Joined: Wed May 31, 2006 5:12 pm

RE: Why Cars Are So Cheap In The US?

Fri Oct 06, 2006 2:26 am

Competition is the very first reason. Taxing should be the second.

However, to deal with the thin margins, many manufacturers offer in the US stripped down versions not available elsewhere, as well as cheaper interiors than those offered in Europe.

The last part is especially true of VW and most Japanese brands.

Quoting KaiGywer (Reply 22):
Chevrolet Aveo. Starting at $9800

Wait until you have the Renault Clio with the Nissan sticker Big grin
 
sovietjet
Posts: 2547
Joined: Sat Mar 15, 2003 12:32 am

RE: Why Cars Are So Cheap In The US?

Fri Oct 06, 2006 2:27 am

My WRX costs $25k new here, yet in Bulgaria when I was there this summer it was about $55k, double the price.

Who is online

Users browsing this forum: Baidu [Spider] and 12 guests