Toronto, Ontario – About one out of every four new-vehicle transactions in Canada includes a trade-in vehicle, down from about one of every three transactions two years ago, according to a new report by J.D. Power & Associates’ Power Information Network (PIN).
This suggests that owners are now either adding vehicles to their households, or selling their vehicles privately at a greater rate versus two years ago. The average age of a trade-in this year has been 6.7 years, up from 6.3 years two years ago, and the typical odometer reading on trades so far in 2008 has been about 118,000 km. About one of every six trades in 2008 has been “upside down”, meaning that the payout exceeds the value of the trade-in, a similar proportion to two years ago.
PIN reports that these measures differ significantly across the four Canadian markets. Calgary/Edmonton owners have a greater propensity to keep their vehicles or sell them privately when compared to the other three markets, and if they do trade them in, they do so sooner than the typical Canadian, after just 5.5 years. This shorter trade cycle results in a lower average odometer reading, as well as a higher number of upside-down trades, more than twice as many in either Toronto or Vancouver.
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 for almost a year longer than the national average, and more than two years longer than in Calgary/Edmonton, and the proportion of upside-down trades is lower.