Canadian car owners concerned about depreciation
TORONTO, Sept. 13, 2011 /CNW/ - Nearly half of Canadian car owners have experienced some form of "depreciation depression," according to new research commissioned by Kijiji Canada, the country's most-visited online classifieds resource. In order to understand how car owners feel about the loss of their car's value over time, the Kijiji Canada study surveyed Canadians on costs associated with both new and used vehicle ownership.
An overwhelming majority of Canadians are well aware of vehicle depreciation, and understand that depreciation is a reality that must be considered when purchasing a car. In fact, nine out of 10 Canadians acknowledge that a new car loses value as soon as it's driven off the lot, yet many still find themselves depressed over the depreciation, citing a range of emotions from being upset to annoyance and sadness. The research also showed that drivers find some relief from the cost burden of owning a vehicle simply by choosing a used one.
"Often purchasing a used vehicle over new makes better economic sense," said Scott Neil, head of Kijiji Autos. "Our research shows that, all things considered, the cost of new is higher than the cost of used. Canadians who have suffered from depreciation depression in the past should consider making their next vehicle purchase a used one to get the most for their money."
How serious is Canadians' depreciation depression? According to the study, nearly one-third of Canadian car owners feel annoyed by the pace at which vehicles depreciate and lose their value, while others report that the issue upsets them (18 per cent), makes them mad (16 per cent), sad (eight per cent), or even downright depressed (six per cent). One in four new car owners reported that they try not to think about the depreciating value of their car.
This comes as no surprise. The research reveals that Canadians see new cars depreciating at a faster rate than used cars. For example, survey respondents' experience indicates that after only one day on the road, a new car loses about 15 per cent of its value, while a used car only depreciates by about nine per cent. The same came be said for depreciation after a month of ownership (21 per cent for new cars versus 13 per cent for used) and after one year (33 per cent for new cars and 26 per cent for used). For example, between 2010 and 2011 a 2002 Ford Mustang depreciated by only nine per cent, on average, based on thousands of listings on Kijiji.ca, versus a newer 2008 Ford Mustang which depreciated at an average rate of 13 per cent.
The value of used
According to the survey, Canadian used vehicle owners spend significantly less money on their cars, considering costs such as ongoing maintenance, insurance, and vehicle payments. On average, a used car owner saves about $114 a month (compared with what they would have had to spend on a new car) with annual costs reported by new car owners averaging 54 per cent higher than those reported by used car owners. A recent Consumer Reports study also found that buying a three-year-old used vehicle instead of buying new can save a car buyer thousands of dollars over the first five years of ownership.
"There's no sacrifice necessary," added Neil. "With more than 250,000 vehicles listed on Kijiji at any given time, it's easy to get the best deal on the perfect set of wheels. In fact, for more than half of Canadian car owners, finding a used vehicle means finding their dream car, likely an affordable make or model of a higher end vehicle they may not have been able to afford at new car prices."
Finding value when buying a used vehicle
Kijiji Canada recommends that Canadians searching for used vehicles online follow these important steps to ensure they're getting the best value for their money:
- Know your history. Always ask the seller for a car's Used Vehicle Information Package (UVIP) and request and read a copy of the vehicle's CarProof Vehicle History Report.
- Invest in inspection. Have a professional inspection done by a licensed technician. This can help avoid unanticipated problems and expenses down the road.
- Go in cold. Try to arrange the test drive when the engine is completely cold. It will give you a good idea of how the car starts, regardless of how long it's been parked.
- Check it inside and out. Inspect the car yourself, inside and out. This is a great way to get to know the vehicle, and to find any issues with worn materials, tire treads, or rust that may need attention.
- Count the miles and the time. Vehicles today are built to last much longer than vehicles built decades ago. You may need to consider some maintenance when a vehicle has accumulated over 100,000 kilometres.
- Get your motor runnin'. You'll learn a lot about the car by taking it for a quick drive around the block to see how it handles, how it sounds, and how the electronics are working.
Consumers interested in searching or purchasing a used vehicle should visit Autos.Kijiji.ca to get started.
These are some of the findings of an Ipsos Reid poll conducted between May 24 and 27, 2011, on behalf of Kijiji. For this survey, a sample of 1,013 adults from an Ipsos Reid Canadian online panel (of which 863 have owned an automobile) was interviewed online. Weighting was then employed to balance demographic composition to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/-3.3 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
About Kijiji Autos
Kijiji Autos is the most visited car site in Canada with more than 4.3 million unique visitors per month (comScore, July 2011). On average, there are approximately 250,000 cars and light trucks listed on Kijiji Autos at any given time and Kijiji users can search for a used vehicle using preferences including: manufacturer, model, year, price range, body-type, kilometre range, colour, and whether a vehicle is for sale by owner or dealer.
About Kijiji Canada
Kijiji, which means "village" in Swahili, is the number one classifieds site in Canada, connecting nine-million buyers and sellers each month. Kijiji.ca offers Canadians a free, easy, and local way to buy, sell, and trade goods and services in their community. With local sites for more than 99 cities and towns across the country, Kijiji makes it easy for Canadians to find exactly what they're looking for in their own community. Kijiji Canada is part of the eBay Classifieds Group, the global leader in online classifieds with a global presence in more than 20 countries and 1,000 cities.For further information: