Toronto, Ontario – The trends for trade-ins in Canada are now similar on sales of both new and used vehicles, according to J.D. Power and Associates.
The percentage of new-vehicle transactions that include a trade-in have increased slightly when compared with transactions a year ago, while the average age of the vehicle traded in has decreased by one month. Similarly, used-vehicle transactions with trade-ins, measured strictly at new-vehicle dealerships, have also increased, while the average age of the trade-in is one month older.
The odometer readings for trades in both new and used vehicle sales are lower on average than they were a year ago, suggesting that owners are cutting back on their driving distances due to higher operating expenses.
The percentage of trades on new vehicle purchases for which the trade is “upside down” — the loan payoff amount on the trade exceeds the vehicle’s actual cash value — has risen almost two percentage points from a year ago. This is the result of the increasing incidence of longer-term financing, which affects the owner reaching the equity point in the finance contract.
The percentage of same-franchise used-vehicle sales has edged downward, suggesting that new-car dealerships are starting to become more comfortable selling off-make vehicles.