Toronto, Ontario – Almost three of every ten new-vehicle transactions in Canada include a trade, up almost one full percentage point from the same period last year, according to J.D. Power. The company said this suggests dealerships are becoming more aggressive in their assessment and acceptance of trade-in vehicles.
In 2010, the average age of a trade-in has been 6.4 years, with a typical odometer reading of 111,379 kilometres, representing slightly younger vehicles on average in comparison to last year’s data.
Of these, 18.9 per cent have been “upside down,” where the loan payoff amount on the trade exceeds the car’s actual cash value, an increase of two percentage points from 2009.
Statistics differ slightly in regional markets. In Calgary/Edmonton, owners are more likely to keep their vehicles or sell them privately, compared with owners in Toronto, Vancouver and Montreal, and if they do trade them in, they do so after just 5.1 years, considerably sooner than the typical Canadian vehicle owner. This results in more than twice as many upside-down trades than in Toronto or Vancouver. As a result, the proportion of upside-down trades is significantly lower.
The situation is reversed in Vancouver, where the percentage of new-vehicle transactions with a trade-in is higher than the national average. Vancouver owners hold onto their vehicles eight months longer than the typical Canadian owner, and more than two years longer than in the Calgary/Edmonton market, and the proportion of upside-down trades is significantly lower.