In 2018 30% of Vehicle Trade-ins in Canada Were in Negative Equity Averaging -$7,051 (Source: JD Power - Power Information Network ® 1/22/2019)
12th Annual Awards Features New Category and Second Highest Ever Overall Retained Value Across All Models
MARKHAM, ON, Feb. 11, 2019 /CNW/ - The 2019 Canadian Black Book Best Retained Value Awards were revealed today, for the twelfth annual edition of these highly touted industry awards. These awards illustrate to Canadians which four year old vehicles hold their value best, which is crucial information when considering a vehicle loan, or understanding the equity positon of an existing vehicle loan.
Negative Equity A Growing Issue In Canada
Negative equity – when a consumer owes more on an auto loan than the market value of the vehicle – is a growing issue for Canadians. This negative equity, which could equal thousands of dollars of additional debt, is often rolled into subsequent auto loans, essentially compounding personal debt, a major Canadian economic concern.
A $30,000 car that holds its value 20% per cent better than another model at the same price point can mean the difference of $6,000 over a 4 year period. Another way to look at it is that a smarter vehicle purchase would mean $6,000 more for a down payment, as a result of buying a vehicle that holds its value better. Recent research conducted by Canadian Black Book suggests that an overwhelming 97 per cent of Canadian car owners feel that more education on loan term and equity position, should be made available during the car buying process.
"If you take the example of a Best Retained Value winner at a depreciation level of 84 per cent and compare its depreciation to the worst in that class at 41 per cent, at trade in time, there is a massive difference in value of over $14,000," says Brad Rome, President of Canadian Black Book. "This is a very large sum of money, which is why understanding what cars hold value well, negative equity and when during your auto loan you will be in an equity position, is so very important."
Canadian Black Book recently launched an industry first Equity Calculator, on their website. This free tool allows consumers to enter their vehicle and finance information which outputs a chart that shows when during their finance agreement, they will have equity in their vehicle.
CBB Best Retained Value Award Can Help Buyers Choose Models That Hold More Value
The 2019 Canadian Black Book Best Retained Value Awards is a great way to help educate consumers on lower depreciation models, across 23 categories of vehicles and three overall brand categories. Trucks and SUVs have been dominating demand over the last several years in Canada, which is reflected by their value on the used vehicle market. The top segments for value retention over four years are 'Small Pickup' (73 per cent); 'Full-sized Luxury Crossover/SUV (63 per cent); and 'Full-sized Pickup' 61 per cent). Bucking that trend is the 'Premium Sports Car' segment which held 64 per cent as a category overall and was won by the iconic Chevrolet Corvette, winning for a second consecutive year.
"Our awards are a factual representation of what has happened in the Canadian marketplace regarding the depreciation of four year old vehicles," says Brian Murphy, VP Research and Analytics at Canadian Black Book. "We hope the manufacturers are proud of these awards, but perhaps even more so, we want consumers to recognize these awards and use them as reference point to help direct them into smart buying decisions."
Overall retained value, across all vehicle models sold in Canada, for 2019 is 52 per cent for 2015 model year vehicles MSRP, which is the second highest year on record, next to last year at 53 per cent. The 2019 'Overall Brand' winners, which measure retained value across all models a brand offers, go to Toyota in the 'Car' class; Toyota in 'Truck/Crossover/SUV'; and to Porsche in the 'Luxury' category.
This year's awards features three all new vehicle categories – 'Sub-compact Luxury Crossover', where the Mercedes-Benz GLA Class won; 'Sub-compact Crossover' where the Jeep Renegade took top spot; and the first ever 'Zero Emission' category where the BMW i3 came out as the winner.
"Canadian Black Book sincerely congratulates all those winners of the 2019 Best Retained Value Awards." says Rome.
For a full list of 2019 winners go to: https://www.canadianblackbook.com/awards/
SOURCE Canadian Black Book
For further information: Media Contact: Conrad Galambos, 905.979.7039, [email protected]