Making an offer and Currency Fluctuation

[kermynator]

I'm interested in making an offer on a vessel in Canada. I've found much useful advice on this site, but one thing has left me flummoxed.

The asking price of the boat is CAN$49,900.

The day I found the boat, that price was US$38,500.
The day I looked at the boat, that price was US$38,750.
Today the price equates to nearly US$40,000.

Those of you who have purchased boats from Canada or abroad, how have you set an offer price in light of fluctuating (and now weakening!) US Dollar?

 

[RT Firefly]

Greetings,
Welcome aboard.

 

[gaston]

Wait till Trump drops a bomb on North Korea and you will pick it up for $5000

 

[BruceK]

The AUD is up too,now around 80c US, partly due to a lower USD.The AUD and CAN $ are usually close.
The Canadian seller sets his price and expectation in CAN, though if his market is substantially across the border, he`d have to allow for it.
Currencies vary all the time,usually for a reason. The market was expecting big things post election, the USD went up, now, not so much. Roll with it, around 2011 our $ was over $1.10 US and Aussies were importing US boats in great numbers.

 

[hfoster]

I'm interested in making an offer on a vessel in Canada. I've found much useful advice on this site, but one thing has left me flummoxed.

The asking price of the boat is CAN$49,900.

The day I found the boat, that price was US$38,500.
The day I looked at the boat, that price was US$38,750.
Today the price equates to nearly US$40,000.

Those of you who have purchased boats from Canada or abroad, how have you set an offer price in light of fluctuating (and now weakening!) US Dollar?

It is really easy.

Base on the prices you posted simply take the lowest one $38,500 and bid down from there. If they give you any guff about the dollar is weak, tell them that is now. Next week your vessel could be listing for 30k. US.

Also if you look at it, it is only a different of $1,500 dollars and do not forget, that is only asking price. They know they will not get that price.


Best of luck

Cheers.

H

 

[john61ct]

Unless the seller indicates she is willing to accept USD bids (likely higher than @ current rates)

then you need to accept the risk (and possible discount!) of negotiating in CAN

Check taxes, duties, standards, etc other legal issues too

 

[Jeff F]

You're likely going to be negotiating and settling in $CDN. As someone in Canada spending my currency I didn't know what the final price was going to be on the US boat I bought until the minute I did the currency exchange to wire the purchase price. You're in that situation. I assumed that currency fluctuations could affect my final cost by a percent or two either way. If that bothers you a lot you might want to stick to a domestic purchase.

Of course you can insist on a USD sales price, but I see this as being generally counterproductive.

 

[Hawgwash]

I'm interested in making an offer on a vessel in Canada. The day I found the boat....

If it's Ladyhawke offer $44,000C firm which as I write this is 36US, subject to the usual. If you are financing, get that all in order first so you can move quickly, jump aboard and head for Teakerne Arm; only because I have always liked that name.

If it is not Ladyhawke, tell me what it is and we'll see what then.

 

[Hawgwash]

Really, though, all you need do is figure out your US budget and work with that. Find all the Canadian costs related to the purchase, including haul, survey etc. and multiply by the exchange, which will be +/- .8 (80%) and reserve a couple grand for movement, keeping in mind the banks will be a point or two different than online charts.


35-40 US isn't going to see a big change over a few days.
The C$ has risen about 5% over 30 days but isn't likely to sustain that growth.


You working with a broker? Most are on top of these deals.

 

[The Other Gary]

I bought a boat in New Jersey to bring back to Canada. I had to take the chance on the exchange rate between offer and closing. End of story.

 

[Hawgwash]

I had to take the chance on the exchange rate between offer and closing. End of story.

Pretty much and not much more than the cost of a weekend cruise here.

 

[dhays]

As others have said. You negotiate and pay in Canadian currency.

Your bank will convert your US to CA at the time of the transaction. If you are concerned about the rising CDN, the buy some now as a hedge.

 

[Jeff F]

As others have said. You negotiate and pay in Canadian currency.

Your bank will convert your US to CA at the time of the transaction. If you are concerned about the rising CDN, the buy some now as a hedge.

I was going to suggest that, but you have to be confident that you're going to spend the CDN before doing that. You don't want to be in the situation where you buy foreign currency and then end up having to convert it back. Maybe you get lucky on exchange rate fluctuations, but more likely you eat a couple of percent on the buy/sell spread. And you could get caught on the wrong side of the currency fluctuations as well...

Just keep the timeline between offer and closing short. Exchange rates in this case don't typically change that quickly. At least not in normal times.

 

[hfoster]

I was going to suggest that, but you have to be confident that you're going to spend the CDN before doing that. You don't want to be in the situation where you buy foreign currency and then end up having to convert it back. Maybe you get lucky on exchange rate fluctuations, but more likely you eat a couple of percent on the buy/sell spread. And you could get caught on the wrong side of the currency fluctuations as well...

Just keep the timeline between offer and closing short. Exchange rates in this case don't typically change that quickly. At least not in normal times.

Agree. Also most banks (Not All) Charge a fee to exchange money. The Poster could just make it part of the deal, that they will take US dollars that way they would have to deal with it.

I am sure the seller would take US dollars. Heck we spend US dollars in Canada all the time. Never once did any one say they wouldn't take it.
The hard part is getting rid of the Can. Dollars that we had left. In the States most places will not take it!

Cheers

H

 

[Jeff F]

I am sure the seller would take US dollars. Heck we spend US dollars in Canada all the time. Never once did any one say they wouldn't take it.

H

Sure. But in most cases you're not realizing full value in the exchange. I'll always be happy to settle a transaction in USD if the price is right.

I remember years ago visiting a Currency Exchange store in Chicago with a fist full of Canadian cash. They looked at me like I had three heads . That label in the US has always puzzled me... What currency is exchanged in these places?

 

[hfoster]

Sure. But in most cases you're not realizing full value in the exchange. I'll always be happy to settle a transaction in USD if the price is right.

I understand that well enough. What I am saying is, if the Poster says he will pay X for the vessel in US Dollars and that's it. They can take it or leave it. That's my thinking anyways. However my thinking can be off at times!

I remember years ago visiting a Currency Exchange store in Chicago with a fist full of Canadian cash. They looked at me like I had three heads . That label in the US has always puzzled me... What currency is exchanged in these places?

Agree! That has never made any sense to me either. I guess British Pounds and the Yen. I know they take that.


I still have about 1,000 bucks in Canadian money from my last trip to Canada laying around. But it's all good. I'll just take it with when I go back to Canada!

Cheers

H

 

[Bay Pelican]

Sure. But in most cases you're not realizing full value in the exchange. I'll always be happy to settle a transaction in USD if the price is right.

I remember years ago visiting a Currency Exchange store in Chicago with a fist full of Canadian cash. They looked at me like I had three heads . That label in the US has always puzzled me... What currency is exchanged in these places?

The term "currency exchange" as it relates to US currency exchanges has nothing to do with exchanging non-US currency. Terrible use of the language. These are stores to cash checks for mostly people without bank accounts, and to issue money orders, wire funds on a retail level, issue license plates and other services.

These stores began during the US depression of the 1930s to provide financial services. Not sure but it may be a Midwestern phenomenon.

 

[FF]

"Wait till Trump drops a bomb on North Korea and you will pick it up for $5000"

If NK then pops a nuke into space the EMP will wipe banking out for years .

Unless you have that $5000 under your mattress .

 

[hfoster]

"Wait till Trump drops a bomb on North Korea and you will pick it up for $5000"

If NK then pops a nuke into space the EMP will wipe banking out for years .

Unless you have that $5000 under your mattress .

FF. Talk about doomsday! The odds of that happening is about the same as everyone on TF hitting the lotto! So I do not believe the Poster will get his vessel for 5k!

Cheers.

H

 

[john61ct]

Maybe he won't, but it is worth worrying about.

He did ask “why can’t we use nuclear weapons?”, and keeps saying he wants to be unpredictable.

http://www.mediaite.com/tv/trump-sp...s-of-nuclear-triad-if-youre-afraid-to-use-it/

 

[hfoster]

Maybe he won't, but it is worth worrying about.

Why worry about it. If they do we all are done away!

Ok enough fun. This post is getting out of the realm of what the Poster wants info about!

Cheers

H.

 

[yachtbrokerguy]

If you import a boat from Canada into the US that was built in Canada, there is no duty (NAFTA.) If it was built in the US than a US built returned goods entry must be made with customs. The import duty for boats built in most other countries like Taiwan or China is only 1.5%. If the Taiwan boat had been imported into Canada from the US in the past, and records were kept of the Entry Summary, and the sale was in the US not Canada, then the old Entry is still valid. If the sale was in Canada then the duty paid status is no longer valid.
There are new restrictions for engine emissions controls for boats built recently, most older boats can be imported.
Best to check with a customs broker so you know exactly what your situation will be.

 

[hfoster]

If you import a boat from Canada into the US that was built in Canada, there is no duty (NAFTA.) If it was built in the US than a US built returned goods entry must be made with customs. The import duty for boats built in most other countries like Taiwan or China is only 1.5%. If the Taiwan boat had been imported into Canada from the US in the past, and records were kept of the Entry Summary, and the sale was in the US not Canada, then the old Entry is still valid. If the sale was in Canada then the duty paid status is no longer valid.
There are new restrictions for engine emissions controls for boats built recently, most older boats can be imported.
Best to check with a customs broker so you know exactly what your situation will be.

Great post! I forgot about that. Thank you for jumping in.

Cheers.

H.

 

[BandB]

You can always hedge the currency. Buy Canadian dollars now. Of course doing so is pretty much a guarantee of the Canadian currency dropping.

We bought out last boat in British Pounds. We had the option of US dollars and we just took a gamble that the Pound would drop. We paid substantially less for the boat in US dollars than the original price. It was far more than 1 or 2%. However, it's always a gamble.