Toronto, Ontario – More Canadian buyers are trading in a vehicle when they purchased a used vehicle from a franchised new-car dealership, according to J.D. Power and Associates. For 2010, trade-in behaviour is going in the same direction for both new and used vehicle purchases.

In 2010, the percentage of buyers trading in a vehicle when buying a brand-new one increased slightly over 2009, while the average age of the vehicle being traded decreased by two months. Similarly, the percentage of used-vehicle transactions with a trade at franchised new-car dealerships also increased over the same period, while the age of the trade-in remained the same at 7.9 years.

Further, the odometer readings for all trade-ins were lower in 2010 than 2009, on average, suggesting that owners are cutting back on how much they drive due to higher operating expenses.

In 2010, the number of “upside down” vehicles traded in, in which the loan payoff amount on the trade exceeds the actual cash value of the trade, rose almost three percentage points from 2009. This is the result of the increasing number of people financing long-term, which affects the point in which the owner reaches the equity point in the finance contract.

The percentage of same-franchise used vehicle sales has gone down, suggesting that dealers are continuing to become more active in selling off-make vehicles.

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