Toronto, Ontario – The Canadian used-vehicle market is on the rebound, according to a new report by J.D. Power and Associates, with more flexible credit options and higher sales of extended warranties.
The typical Canadian used-vehicle buyer is 44 years old, and slightly more than one-third of buyers are female. The mileage on the average used vehicle when sold has increased to 65,080 kilometres, while the average vehicle age has increased marginally to 3.8 years.
The percentage of transactions in the first quarter of 2011 that included a loan obtained at a dealership increased by almost four percentage points, compared with the same period in 2010. Cash sales, which includes customers obtaining loans privately, decreased by nearly three percentage points. This indicates both captive and non-captive lenders continuing a more flexible credit purchase policy.
In the first three months of 2011, the average transaction price of a used vehicle rose to $18,476, while the total down payment increased to 10.6 per cent of the customer’s equity in the vehicle. Another sign of economic recovery was an increased likelihood for the buyer to purchase an extended service contract, life insurance or disability insurance coverage, when compared to the same period last year. The finance term remained unchanged year-over-year, with an average of 59 months.
Conversely, the retail turn rate reflected the continued struggle for franchise dealers to compete in the used-vehicle market. During the first quarter of 2011, the typical used vehicle sat on a franchise dealer’s lot for 63 days. This is five days longer in comparison to the same period in 2010.