Toronto, Ontario – Almost three out of every 10 new-vehicle transactions in Canada included a trade-in, up from about one out of every four compared with the same period last year, according to a survey by J.D. Power and Associates.
The analysis company said that the numbers suggest new-vehicle dealerships are being more aggressive in the assessment and acceptance of trade-in vehicles. The average age of a trade-in this year has been 6.6 years, and with a typical odometer reading of 115,189 kilometres, very similar to last year’s data. About one of every six trades in 2009 has been “upside down,” with the loan payoff amount on the trade exceeding the actual cash value of the trade, the exact proportion as in 2008.
The numbers differ significantly across the four Canadian markets. Owners in Calgary and Edmonton are more likely to keep their vehicles or sell them privately, when compared with Toronto, Montreal and Vancouver. If they do trade them in, they do so after just 5.5 years, sooner than the typical Canadian owner. This results in a lower average odometer reading, and more than twice as many upside-down trades as either Toronto or Vancouver.
In Vancouver the situation is reversed, with the percentage of trade-ins higher than the national average. Vancouver owners hold onto their vehicles close to a year longer than the typical Canadian owner, and almost two years longer than in Calgary/Edmonton. The proportion of upside-down trades is also lower.