Good News After Another Year of Record New Car Sales
MARKHAM, ON, Feb. 13, 2018 /CNW/ - The 2018 edition of the Canadian Black Book Best Retained Value Awards, announced today, were highlighted by a record for overall industry average retained value of four year old vehicles in Canada. At 53 per cent, this surpasses the previous record of 51 per cent, set just last year. This is a significant increase given the number of categories and 282 total vehicles measured.
This year marks the eleventh annual presentation of these prestigious auto industry honours. The 2018 awards measure vehicles from 2014 and are awarded in 20 vehicle categories and for the second year, three 'Overall Brand Awards.'
"What a great year for retained values," says Brad Rome, President, Canadian Black Book. "That said, the feeling is that we are getting close to the turning point where values will begin to retreat. Market conditions, most notably the increase in supply in the U.S. and Canada is expected to put downward pressure on prices moving forward," he says.
The record year for retained values is largely influenced by a few strong segments and individual vehicles. The 2014 Jeep Wrangler has smashed the all-time retained value record, by holding 91 per cent of its original MSRP. The Jeep Wrangler has won in eight consecutive years. The 'Small Pick-up' category, as a whole, retained an impressive 73 per cent of its value. The next strongest categories are the 'Full-Sized Luxury Crossover/SUV' and 'Full-Sized Pick-up' both retaining 61 per cent of original MSRP.
"High depreciation, the single most expensive cost of owning a vehicle, can be a back breaker. Especially if you are in a long-term loan, holding many consumers in negative equity where their vehicle is worth less than the outstanding amount due on the loan for almost the entire term," says Brian Murphy, VP Research and Editorial, at Canadian Black Book.
For example, after four years of owning a vehicle that only retained 30 per cent of its value, versus one that retained 50 per cent, the loss would be $7,000 more in depreciation on a typical $35,000 car. The weaker value retention will affect what the current car is worth at the end of the loan, and if any losses are rolled into the next loan, it will result in larger payments for the new car, due to a low trade-in value.
"Car buyers need to understand depreciation and the issue of negative equity and do their research on vehicle values before they head into the dealership." Murphy says.
CanadianBlackBook.com maintains a database of car and truck values dating back to 2002. The website offers three free values calculators - one that allows consumers to look up trade-in values, another that shows future values, and a third that shows average asking price.
SOURCE Canadian Black Book
For further information: Conrad Galambos, firstname.lastname@example.org, (905) 979-7039