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Want cheaper tires? Cross-border options for penny-pinchers

When the Canadian dollar approached $1.10 (U.S.) back in 2007, we were told that price differences across the border would take a while to even out. But after five years, the loonie and the greenback are pretty much at par and I'm still making a regular pilgrimage across the border with my friend to buy wheels and tires.

In 2009, I made the road trip to Buffalo for my car. I picked up a set of four wheels and tires for almost 25 per cent in total savings after factoring in currency, duty and taxes at the border and fuel for the trip. What would have been $2,000 here, was only $1,550 over the border. Last week, we drove down for my friend, who saved almost 15 per cent.

One of the big money-savers is using a delivery holding service. On the four occasions when my friend or I have bought wheels and tires in the U.S., we ordered from an online company and arranged to have the goods shipped to an address near the border. There is a company we use, named "U.S. Address Inc.," that is located about three minutes from the Lewiston bridge border crossing in Ontario.

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The cost to hold the wheels and tires for us, because they're heavy, was $40. Smaller packages are less. We order the tires from a large U.S.-based online store, and while we could have them delivered to Canada, domestic shipping to a U.S. address is about $100, while international shipping to Canada is about $300. A $40 fee to save $200 (minus the cost of gas) means we make a run for the border every time.

There are many services of this kind along the border. Some UPS stores in the U.S. will hold packages for Canadians. You can also check out the forums on CrossBorderShoppingDeals.com for more ideas.

How popular are these holding services? Aside from all the Canadian licence plates in the parking lot, there was even another set of wheels and tires there marked as belonging to a mutual friend of ours. It gets better. I sent him a quick e-mail to jokingly ask if he had lost a set of tires in Buffalo, and his reply was, "Hah, you're the second person that saw my tires there!"

Other people were picking up luggage, big-screen TVs, clothing and pretty much anything else you can think of. And, if you are not buying from online-only retailers, you can skip the holding services and just shop at your favourite stores directly.

My friend and I routinely save 25 per cent on wheels and tires, but many forums suggest you can get discounts of 50 per cent on other items.

Finance Minister Jim Flaherty has suggested that a Senate committee be created to investigate the pricing disparity across the border. But the 2012 federal budget came with the announcement that cross-border shopping exemptions were going to increase, meaning you can bring back even more stuff without being subject to duty and taxes. To me, that suggests the examination into pricing parity should be accelerated, otherwise Canadian businesses will continue to suffer.

And while I feel for Canadian businesses, I feel for myself more. I go where the deals are best.

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As for my friend's wheels and tires, one last note: According to his packing slip, the origin of manufacture for the tires was Taiwan, and for the wheels, Thailand. The only things made in the U.S. were the instructions and the warranty card.



Retailer delivery vs. cross-border pickup

Breakdown of the cost of buying identical wheels and tires in Canada versus having them shipped close to the border on the U.S. side and driving to pick them up. (Assumes loonie at par.)

Delivery from Canadian online retailer Wheels at $184.99 each = $739.96 Tires at $189.99 each = $759.96 Mounting and balancing = $49.99 Shipping = $116.48 Tax = $216.63 Total = $1,883.02

Delivery from U.S. online retailer Wheels at $163 each = $652 Tires at $155 each = $620 Shipping to Canada = $279.91 Taxes = $183.03 Duty = $82.52 Provincial Tire Fee = $23.36 Brokerage Fee = $30 Total = $1,870.82

Cross-border pickup from U.S. online retailer Wheels at $163 each = $652 Tires at $155 each = $620 Shipping = $108.55 Holding fee = $40 Taxes at border = $179.47 Fuel for trip = $30 Total = $1,630.02

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Savings = $253 or 13.4 per cent versus delivery via Canadian online retailer. Note: If the loonie appreciates versus the U.S. dollar, your savings would increase.



Preet Banerjee, B.Sc, FMA, DMS, FCSI, is a W Network Money Expert, and blogs at wheredoesallmymoneygo.com. You can also follow him on twitter at @PreetBanerjee

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About the Author
Personal Finance columnist

Preet Banerjee is a consultant to the financial services industry. You can follow him on twitter at  @PreetBanerjee. You can find his conflict of interest disclosure on his website. More

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