September 20, 2006

Trade-in patterns vary across four Canadian markets

Toronto, Ontario – About one of every three new-vehicle transactions in Canada includes a trade, according to J.D. Power and Associates. The trade-in vehicle is generally a little more than six years old, and has about 120,000 km on it. About one of every six trades is “upside down”, meaning the outstanding loan is larger than the vehicle’s current market value.

These measures differ significantly across the four Canadian markets. Calgary/Edmonton owners are more likely to keep their vehicles or sell them privately, and if they do trade them in, they do so sooner than the typical Canadian, after just five and a half years. The mileage is therefore lower, and this quicker trade cycle, providing less time to pay off the loan, results in a higher number of upside-down trades.

The situation is reversed in Vancouver, where the percentage of new-vehicle sales with a trade is higher than average, owners hold onto their vehicles longer, the trade-ins have higher kilometre readings, and the proportion of upside-down trades is lower.

Overall, in Calgary/Edmonton the trade-in percentage is 26.6, the average trade-in vehicle age is 5.5 years, and the odometer reading is 114,004 km. In Toronto, the percentage is 32.2, the average age is 6.5 years, and the odometer reading is 127,915. In Vancouver, the percentage is 33.5, the age is 7.5 years and the odometer is 120,441; while in Montreal, the percentage is 29.4, the average age is 6.5 years, and the odometer is 113,737 km.

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