The Value – Issue #5: 2018 TalkAUTO Set for November 7 With Registration Opening Mid-June

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Canadian Black Book and J.D. Power together are pleased to announce the upcoming 2018 TalkAUTO, the seventh annual edition.   This year’s highly anticipated event will take place on Wednesday, November 7 at the Universal EventSpace in Vaughan, Ontario.

Registration for around 400 attendees, for the high profile Canadian auto industry conference, is set to open in mid-June.   TalkAUTO has grown into a top-tier networking destination for Canada’s auto industry key influencers and decision makers, who include many dealers, OEM executives, industry suppliers, finance and banking experts, trade media and more.

For 2018, the theme for TalkAuto is ‘Who Moved My Keys? Adapting to Change in a New Marketplace’, a play on the popular motivational business fable and New York Times Bestseller – ‘Who Moved My Cheese’.

An impressive line-up of guest and keynote speakers will support this year’s theme, headlined by Sheryl Connelly, manager of Global Consumer Trends and Futuring, Ford Motor Company.  Serving as Ford’s Futurist now for over a decade, and well known for identifying global trends and how they might impact the auto industry, she will certainly provide the TalkAUTO audience with an informative and memorable address.

“Each year, now our seventh, TalkAUTO gains credibility as a must attend event,” says Brad Rome, President at Canadian Black Book.  “Attracting a high profile speaker like Sheryl Connelly is a testament to how this event is perceived by the industry.”

“Last year’s event was an overwhelming success and our conversations since that day, with dealers, OEMs and industry people alike all point towards another exciting and enlightening day for Canada’s auto sector,” says J.D Ney, Country Manager, Canadian Automotive Division, J.D. Power.

Organizers urge you to keep the November 7th date saved and look out for the opening of registration in Mid-June. As in previous years, if history is any indication, seats will fill quickly.

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For additional comments or more information, please contact:

Conrad Galambos
Media Relations
Canadian Black Book
905-979-7039
cgalambos@canadianblackbook.com

The Value – Issue #4: March’s Used Vehicle Retention Index

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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The Canadian Black Book Used Vehicle Retention Index for March 2018 index tied the all time high set back in December 2017 of 103.0. The industry wide wholesale value index is up by +3.2% from the same time last year, and up +0.5% from last month’s mark.

CBB Used Vehicle Retention Index - March 2018
March 2018 Canadian Black Book Used Vehicle Retention Index

This Index serves to offer unbiased and accurate insights and statistics regarding the health of the used wholesale vehicle market in Canada.

It is important to note that the Canadian dollar started the month at just under 78 cents, but then it promptly fell to 76.5 cents.  The weaker dollar helped to keep Canadian vehicles affordable for export for at least a portion of yet another month.

Looking though the various segments the biggest value gainers from last year are compact cars (+7.8%) and mid-size cars (+6.5%).  The most significant increases from last month are compact crossover/SUV and full -size car which are both up +1.8% from February.

On the loss side the full-size pickups show some softening at -1.9% and minivans at -4.7% compared to March of 2016.  The full-size crossovers, luxury cars and full-size vans shared the same decline of -0.6% since last month’s index.

The Canadian Black Book Used Vehicle Retention Index is calculated using Canadian Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as a percent of original typically-equipped MSRP. Canadian Black Book’s Wholesale Average is a benchmark value for used vehicles selling in the wholesale auctions with the vehicle quality in average condition. The index is weighted based on used vehicle sales volume and adjusted for seasonality, vehicle age, mileage, condition, and inflation (MSRP).

Aggregated from daily vehicle value updates, and captured throughout thousands of wholesale vehicle transactions across the country, the Canadian Black Book Used Vehicle Retention Index represents data across all regions of Canada. The Index is based on a comprehensive list of vehicles included in the Canadian Black Book wholesale database, and includes no bias toward any brand, data source or region, ensuring an accurate report of the used vehicle market.

The Index is posted monthly on https://blog.canadianblackbook.com/ and distributed to automotive media for wider industry consumption.

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CLICK HERE TO DOWNLOAD THE FEBRUARY 2018 CANADIAN BLACK BOOK USED VEHICLE RETENTION INDEX (PDF)

For interview requests or more information, please contact:
Conrad Galambos, 905-979-7039, cgalambos@canadianblackbook.com

The Value – Issue #4: CBB Connect is New and Improved

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Canadian Back Book is proud to introduce the all new and enhanced CBB Connect.  Phase 1 went live earlier this year with a more contemporary design and improved functionality. Phase 2 is now ready to launch with new features that truly make this an end-to-end remarketing solution. The new interface is easy to use and boasts cross-device sync, proprietary CBB industry data, local market insight, a vehicle appraisal tool with a new VIN scanner, and much more.

To learn more about the newly upgraded CBB Connect, see the video above and contact us at 800-562-3150 to upgrade today.

The Value – Issue #4: Tell the Whole Story in Your Digital Remarketing

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Cole Reiken
Cole Reiken, VP Digital & Product Development, Canadian Black Book

By: Cole Reiken, VP Digital & Product Development, Canadian Black Book

Although many suggest that the used car industry has stayed stagnant over time, it’s hard to refute the business innovations witnessed over the past 5 years, inherently driving change in dealerships.  Today, running a successful used car business requires a nimble manager who wears many hats.  This manager must be versed in procurement, marketing, sales, administration and be able to wade through the art and science of determining the best business strategy.

From a marketing perspective, what we know is that the most cost efficient channel to market your inventory is digital.  What some may, or may not know, is that digital advertising can be extremely challenging.  What is the right mix, the right site(s), the right words, price, images, timing and more?

Instinctively and unfortunately, too many managers determine their used car marketing strategy based on price.  Price on its own will not convert an average browser into a lead or a buyer for the most part.

If you examine the most popular listing sites, such as Kijiji, AutoTrader or Canadian Black Book, we would be remiss not to recognize how well many operators nail down their pricing strategies, ensuring their inventory is priced correctly.  Available inventory management tools have made this process more streamlined.

But it’s not all about price, right.  Each used vehicle is unique, and requires a unique written and visual story to be told, to optimize its potential to sell.

The industry has greatly improved and accepted the cliché that “a picture is worth a thousand words”.  Photo capture has significantly developed over the past few years to help frame these stories.

However, a far too commonly overlooked portion of the used car story for a third-party website is the need to answer the question “why do business with me?”  Perhaps this is not a new concept.  Frankly, you’ve likely read many articles about this topic, but take a few moments and look at listing out there now.  Few dealerships put much thought into answering that key question, on their own site listings.  Even fewer do so on vehicle details pages on websites that are not their own!

In today’s age of reviews for everything under the sun (yes, there are even review sites for rating the best review sites), making the answer to “why do business with me” part of the story can be as important as how you merchandise your cars.

A friend of mine in the venture capital space always encourages his founders to have a thirty second “elevator pitch”, ready to go on a moment’s notice.   You never know when or where you will find the need to impress someone, they come from all angles at any time.

So, I would ask you to consider, what’s your elevator pitch that answers “why do business with me?”  Do you have one?  If so, do you leverage it optimally?  If not, get one!

What are the elements that make you unique and a top choice to deal with?  Cars at a great price, is not enough.   Perhaps it’s your location, years in business, experienced staff, previous customers, ratings and reviews, distinctive services, worry free return periods, or what makes the cars you carry special…I could go on and on.

Write this on a napkin, brainstorm it with your team, get your agency to do it for you, but get this done.  It may alter or completely change overtime, but take the first step and produce this part of the story.

Next you figure out how to use it online, because your entire team has by now committed this to memory.  Is this part of all your vehicle descriptions or spelled out on your imagery or perhaps if allowed provide via link to it on your own website?  Those answers will come after assessing your marketing mix and a bit of trial and error.

That’s a column for another day. Tell the whole story.

The Value – Issue #4: Ten Things That Really Matter in Canada’s Used Vehicle Market

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Brian Murphy
Brian Murphy, VP Research & Editorial, Canadian Black Book

By Brian Murphy

When analyzing today’s auto industry, we can argue about any number of given factors that touch any given number of areas inside Canada’s auto sector.  That said, from our estimation at Canadian Black Book, we can narrow that long list of potential topics down to ten subjects that really matter and form the crux of how our used vehicle market functions in Canada.

The following ten areas all pose direct impact on vehicle prices today (wholesale values), vehicle prices in the future (residual values) and the potential proceeds from vehicle remarketing efforts.  How this relates to an appraisal of our future is a complex equation of how these ten ‘things’ interact with each other.

First – The Canadian Dollar: The Canadian Dollar has a profound and swift effect on the value of used cars in our domestic marketplace.  As our Dollar weakens there is a direct correlation to an increase in exported used supply to the States.  As you can imagine, on the contrary, as our currency gains value against the greenback, we begin to see a net reduction in in the volume of used vehicles exported from Canada.   Eventually if the dollar strengthens enough, and supply permits, used vehicles will again en masse be imported from the U.S. to Canada.

Enter ‘arbitrage economics’, which is the act of buying something at a low price in one market and then selling it a higher price in another market.  Currently, the Canadian Dollar is around $0.77, the lowest it’s been since June 2017.  For example, a particular large SUV sells for $42,500 in Canada at wholesale, while the same unit goes for $54,500 in the U.S.  While our dollar is low, there is a lot of money to be made.  The exchange rate is the key that determines if the ‘export dam’ is open or closed.

Second – Supply:  The supply of used vehicles in the U.S. and Canada, plays a huge roll in dictating both current and future values.   The simple concept of supply and demand really does drive remarketing cycles.   In short, demand has been great, while supply of late has been tight, bringing prices up.  However, we are on the verge of getting a lot of supply!

Between 2013 and 2017, we’ve seen an average of 225k units return to market off lease per year.  That number is projected to breach the 400k mark, between 2019 to 2021.  We don’t expect used vehicle demand can keep pace with such a supply, causing prices to lower.

Third – Lease Penetration:  Leasing has become Canada’s used car factory.   As an industry we keep ‘making’ more used vehicles.  Last year, about 450k vehicles were leased, with around 400k of those to consumers.  Therefore, in three to four years, we will have ‘made’ that number of used vehicles which are purchased by the lessor, by the retailer or sent to auction then purchased by a retailer.

All the while, we sit in an environment of record new car sales, which inevitably will lead to record used car supply.  But at what price?  Lower prices? Yes!

Fourth – The Economy:  Auto sales are a leading indicator for the economy, as we can see a direct relationship between softening sales and an economic slowdown.  Simply put, if consumers are not secure in their financial future, they will postpone the purchase of big ticket items.

Currently we are experiencing the lowest unemployment rate this century, coupled with high consumer confidence and amazing GDP growth.  If we simplified the economy to green light, yellow light, red light, then we are very much…green light.

Fifth – Retained Value Trends: What goes up often comes down!  Our business is a cyclical one and it’s helpful to understand where that cycle sits.  From 2005 through 2009 Canada experienced a steep decline in retained values, due to poor economic factors, too much leasing, and a strong dollar ($1.26 in March 2009).  However, since mid-2010 we have seen a steady rise in used values.  When values fall, leasing is less attractive and used vehicles become more appealing, and obviously when values rise, leasing again becomes very alluring.

On average, across all segments over the last seven years, values have increased a remarkable 3.7 per cent.  We expect this market is turning, primarily driven by the coming boost in supply.

Sixth – Consumer Tastes: A major contributor to both supply and demand, are consumer tastes.  It is this force that dictates OEMs investments in new product lines, face-lifting existing ones and mega marketing campaigns.

Today, Canadian consumer tastes have moved away from cars with only a 32 per cent share of sales and falling, while trucks and SUV sales grow.  Some car models will soon be extinct.  EV sales are growing, yet still make up a tiny portion of the overall marketplace and offer weak residual values.  These tastes have a significant impact on how vehicles depreciate, the more desirable the vehicle the more desirable the value retention!

Seventh – Rental Cars: Ten per cent of the market (200k) vehicles are rentals, making another large source of used product.  However, around 20 models make up over 33 per cent of rental car fleets.  These models typically do not win Canadian Black Book Best Retained Value Awards and are therefore difficult to lease to consumers.  OEMs target the rental buyers with these, depressing their resale value; and the cycle repeats.

Eighth- New Vehicle Incentives: Although positive for the new car buyer, incentives are not always a good thing.  Incentives that are persistent over a many months, especially large cash incentives have a cooling effect on resale values.  Let’s say a brand new $60k vehicle is 25 per cent off, then right off the bat that vehicle’s resale value is $15k less than normal.   Another effect is that these programs can keep consumers in a negative equity positon longer, which can place demand at a lower price point.

Ninth – Is the Product Any Good?: At Canadian Black Book, we evaluate 90 plus vehicles annually.  So, we get out and drive them and experience them in the same way a new car buyer would.  Our goal is to determine if the vehicle is competitive in the marketplace today; who the real competitors are and is it better or worse; and how is it priced?  One thing we do know is that if the vehicle is not competitive now, it surely will not be in three to four years when it comes back to market as a used vehicle.  Typically in our opinion, eight out of ten rides we test are quite good.  The obvious bottom line is that weaker vehicles will result in more residual value risk for the lessor.

Tenth – New Technology: The market tends to be skeptical when it comes to value for technology.  What will a given technology be worth in five years?  Often the answer is zero, as it may be obsolete, become standard equipment, or the value has come way down for that particular technology (think DVD players).   Technology on a new vehicle is profitable for the OEMs, yet remarketers will struggle to get much value back for many newer high-tech features.

Understanding or explaining the dynamics and trends of used vehicle values is far from simple.  It could be broken out into a plethora of economic, political, social and cultural factors.  But, when it really comes down to it, these ten ‘things’, all have direct impact and can provide the foundation of information that really matter, when it comes to used vehicle values in Canada.

The Value – Issue #3: NADeh Night in Las Vegas – Don’t Miss This FREE Exclusive Party for Canadian Dealers

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Canada Night NAD’eh

Don’t miss the party of the year at NADA in Las Vegas! IT’S FREE!

All Canadian automotive dealers are invited to this exclusive event.

To attend you must register – CLICK HERE

Canada Night NAD’eh will be held Thursday, March 22, 8:30 PM, at Vinyl @ Hard Rock Cafe in Las Vegas.

See you in Vegas!

The Value – Issue #3: February’s Used Vehicle Retention Index

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Canadian Black Book Used Vehicle Retention Index for February 2018

This Index serves to offer unbiased and accurate insights and statistics regarding the health of the used wholesale vehicle market in Canada.

Even though off lease used vehicle supply continues to grow, both in Canada and the U.S., February 2018 marks the highest index level for the month since tracking began in 2005.  The index at 102.5 is up +2.5% points from February of last year.  After a softer January where values fell -0.7% from December the index rose +0.2 points to land at the present 102.5 level.

The largest gainers year-over-year (YOY) are Compact Cars at +6.1% and Subcompact car at +6.0%, two segments that had previously been under significant downward price pressure yet have recently rebounded.  The biggest losses in YOY value were the Minivans at -5.3% and Full-Size Pickups at -2.2%.

The largest advances month-over-month are the Sports Cars at +1.5% and the Mid-Size Cars at +1.6%.  Surely the Sports Car value gain is a sign that spring is indeed around the corner.  Conversely, the largest retreats from a MOM point of view, were the Minivans at -1.7% and the Small Pick-up Trucks at -1.4%

The Canadian dollar has shown some weakness in February with a drop of $0.03 so that will make Canadian used vehicle exports look more attractive.

The Canadian Black Book Used Vehicle Retention Index is calculated using Canadian Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as a percent of original typically-equipped MSRP. Canadian Black Book’s Wholesale Average is a benchmark value for used vehicles selling in the wholesale auctions with the vehicle quality in average condition. The index is weighted based on used vehicle sales volume and adjusted for seasonality, vehicle age, mileage, condition, and inflation (MSRP).

Aggregated from daily vehicle value updates, and captured throughout thousands of wholesale vehicle transactions across the country, the Canadian Black Book Used Vehicle Retention Index represents data across all regions of Canada. The Index is based on a comprehensive list of vehicles included in the Canadian Black Book wholesale database, and includes no bias toward any brand, data source or region, ensuring an accurate report of the used vehicle market.

The Index is posted monthly on https://blog.canadianblackbook.com/ and distributed to automotive media for wider industry consumption.

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CLICK HERE TO DOWNLOAD THE FEBRUARY 2018 CANADIAN BLACK BOOK USED VEHICLE RETENTION INDEX (PDF)

For interview requests or more information, please contact:
Conrad Galambos, 905-979-7039, cgalambos@canadianblackbook.com

The Value – Issue #3: Brian Murphy to Present at Auto Remarketing Canada Conference

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Don’t miss Canadian Black Book’s, VP Research & Editorial, Brian Murphy presenting at the 2018 Auto Remarketing Canada Conference.

Brian presents at 10:00AM Mar 27&28,  and will break down the Canadian used vehicle into 10 elements that “really matter” when trying to understand the current state of the used car market in Canada.

Auto Remarketing Conference Canada will be held at the Westin Harbour Castle, in Toronto, Ontario, on Tuesday March 27th and Wednesday March 28th.

See you there!

The Value – Issue #3: New Research Points Toward a Softening of Canadian Auto Sales

Welcome to Canadian Black Book’s – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Consumers are open to new ways of shopping for and buying vehicles

Research recently completed shows that 51 per cent of Canadian automotive consumers are likely to purchase a new vehicle over the next 24 months. Although this number is still strong, those surveyed last year were eleven per cent more likely to buy soon, a number highlighted by a record year for Canadian automotive sales. Perhaps this year’s numbers suggest that recent forecasts of diminishing auto sales are looming.

“Quite frankly, after such a dramatic ascent in sales over the past couple of years, this makes sense. It would be hard for us to continue breaking sales records throughout 2018 and beyond,” says Brad Rome, President, Canadian Black Book.
For the third year now, vehicle values specialists, Canadian Black Book, has designed a poll conducted nationally by Ipsos to gauge Canadian car buying habits, knowledge and trends. This year’s edition surveyed 1255 Canadians from coast to coast.

The poll implies that the younger a consumer is, the more likely they are to buy in this timeframe, with respondents aged 18-34 the most likely at 65 per cent, those 35-54 at 57 per cent and those 55 years or older are least likely at 34 per cent. Male respondents show more eagerness to buy in two years at 58 per cent versus females at 44 per cent.

(Click Here for High-Res version of the infographic)

Interestingly, over a quarter (27 per cent) of Canadians are likely to purchase a vehicle fully online, without stepping foot into a dealership. This is an area most OEMs and dealers are looking closely at, for good reason. Age and sex sway these results, where 36 per cent of those aged 18-34 would take buying fully online while only 11 per cent of those over 55 would do so. Males are much more likely at 32 per cent versus females at 21 per cent. “We are not surprised to see that millennials are over three times more likely to purchase a vehicle online compared to boomers,” says Brian Murphy, VP Research and Editorial, Canadian Black Book. “This would be a major shift in automotive retailing, and one that is similar to how millennials research, shop for and purchase so many of their goods today,” he adds.

57 per cent nationally intend to purchase a new vehicle instead of a used one. This statistic is also influenced by age, where older buyers are more likely to buy new. Those aged 18-34 intend to buy new at 46 per cent, while 59 per cent of respondents 35-54 and 64 per cent of those 55 plus, will likely buy a new vehicle.

Dealer websites are the first tool that consumers use when researching a vehicle, say 23 per cent of the respondents. The next method for initial research which was selected by 22 per cent of those surveyed is to ask friends and family.

After initial research is done, where there is more uncertainty, is in the understanding and research of trade-in values. Nationally, only half (49 per cent) of Canadian auto consumers had a good idea of their vehicle value heading into the dealership. However, 21 per cent had no idea of the value and a further 6 per cent had such poor trade-in experience that they switched dealers all together. 36 per cent feel that they got less than they expected on a trade-in.

“Consumers often struggle with knowing an accurate trade-in value for their vehicle, which can turn the car buying experience into a negative one for both the buyer and the seller,” says Murphy. “It’s crucial that consumers use tools to get accurate trade-in values. While they’re at it, they should research the future value for the ride they intend to purchase, so they properly understand its depreciation curve and when it will be in negative equity related to their loan.”

For this, 65 per cent of respondents chose online trade-in calculators (up 7 points from last year) as the number one method to research vehicle values. Across Canada seven in ten of those surveyed know that Canadian Black book allows the public free access to its online vehicle valuation tools. This survey showed that 33 per cent of respondents have actually used the tools on CanadianBlackBook.com, up 9 points from this time last year.

“Of extreme concern, is the seemingly perpetual misunderstanding about the single largest cost of vehicle ownership – depreciation,” says Murphy. Only one per cent correctly identified depreciation as the largest expense tied to owning a vehicle (down from two per cent last year). “Purchasing a vehicle that has poor value retention can cost you thousands of dollars, when you go to sell, trade-in or negotiate a loan,” he adds. Zero females and zero respondents from the 35-54 age group answered this question correctly.

Up from last year at 53 per cent, now 61 per cent of Canadians can properly define what negative equity is (when a vehicle is worth less than what is owed on a loan). This issue is currently growing along with the trend towards longer term auto loans. A resounding 97 per cent of respondents feel auto retailers should make customers fully aware of various loan payment options and schedules, so they are exactly aware of positive versus negative equity.

In terms of vehicle types, if gas were to rise $0.25 today, 46 per cent would consider any alternative energy vehicle, with hybrids being the most popular choice at 33 per cent. Males are more likely to consider an alternative energy vehicle at 52 per cent compared to females at a considerably lower 39 per cent.

Given a number of economic factors and the growth of vehicle sharing culture, Millennials are most likely to reduce the amount of vehicles in their household fleet in the next two years, at 32 per cent versus only 14 per cent of those over 55 years of age. However, in ten years 41 per cent of both the 18-34 and 55+ groups are likely to reduce the amount of vehicles they own.

About the Poll:
These are some of the findings of an Ipsos poll conducted between December 27, 2017 and Jan 2, 2018, on behalf of Canadian Black Book. For this survey, a sample of 1,061 Canadians (who own or lease a car/truck or who are looking to purchase in the next two years) from Ipsos’ online panel were interviewed online. Weighting was then employed to balance demographics 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. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ – 3.4 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

 

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For more information or interview requests, please contact:
Conrad Galambos
Media Relations
Canadian Black Book
905-979-7039
cgalambos@canadianblackbook.com

The Value – Issue #2: 2018 Best Retained Value Awards Reveal Record Gains Across the Board

Welcome to the second edition of The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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2018 Best Retained Value Awards Reveal Record Gains Across the Board

Some More Good News After Another Year of Record New Car Sales

The 2018 edition of the Canadian Black Book Best Retained Value Awards, 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 Canadian Black Book Best Retained Value Awards are awarded in 20 vehicle categories and for the second year, three ‘Overall Brand Awards’.

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 now 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.

“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 are going to 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.

Other notable high performing winners this year, helping to support the overall record average  are: the first time winner Chevrolet Corvette in ‘Premium Sports Car’ retaining an impressive 88 per cent of its value; the Toyota FJ Cruiser in ‘Mid-sized Crossover/SUV’, the previous all-time retained value record holder from last year (at 83 per cent), winning for seven of the last eight years, and holding 86 per cent of its value from 2014; and the Toyota Tacoma, in the ‘Small Pick-up’ space has won for an unprecedented nine consecutive years and held 81 per cent of its value after four years, just one point down from last year.

“If you are the owner of one of these award winners and hold a loan or in some cases even a lease for the vehicle, you could be in a better position when it comes time to get into a new vehicle,” says Brian Murphy, VP Research and Editorial, at Canadian Black Book.  “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 of the loan,” he adds.

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.

The category ‘Sub-Compact Car’ fares the poorest for retained value, holding a category average of just 40 per cent, with some individual cars dipping into the twenties.   Other categories that currently struggle with retained value, are ‘Luxury Car’ (43 per cent), ‘Compact Commercial Van’ (45 per cent), ‘Mid-sized Car’ (46 per cent), ‘Full-sized Car’ and ‘Compact Car’ (both at 47 per cent). Overall trucks and Crossover/SUVs seem to perform best which reflect strong market demands for these types of vehicles in the used market.

Certain brands also excel in terms of retained value. For the second year, Canadian Black Book is awarding ‘Overall Brand Awards’ that recognize retained value across a brands’ full product line up. The winners are for ‘Car’ – Toyota (56 per cent); ‘Truck/Crossover/SUV’ – Toyota (71 per cent); ‘Luxury’ – Porsche (66 per cent). Toyota again dominated the awards with eight category wins, two brand wins and 14 total mentions (top three in a category).

Other brands had impressive showings for 2018. FCA posted its best ever showing with seven mentions and four category wins in ‘Compact Crossover/SUV’ with Jeep Wrangler; in ‘Compact Commercial Van’ with RAM Cargo Van; in ‘Full-sized Van’ with RAM ProMaster, and the Canadian built Dodge Challenger in ‘Sports Car’ for the seventh year straight.

GM also shows its best year yet with six mentions and two category wins in ‘Premium Sports Car’ – Chevrolet Corvette; and in ‘Full-size Crossover/SUV’ – Chevrolet Tahoe.

Mercedes-Benz topped the luxury category with seven total mentions and three category wins in ‘Entry Luxury Car’ – Mercedes-Benz CLA-Class; in ‘Full-size Luxury Crossover/SUV’ – Mercedes-Benz G-Class; and in ‘Compact Luxury Crossover/SUV’ – Mercedes-Benz GLK-Class.

“Congratulations to all the winners of the 2018 Canadian Black Book Best Retained Value Awards.  You all deserve it for producing vehicles that Canadians want.” said Brad Rome.

2018 Canadian Black Book Best Retained Value Award Results:

Overall Brand Awards
Car Toyota
Truck/Crossover/SUV Toyota
Luxury Porsche

 

MODEL 1st 2nd 3rd
Sub-compact Car Toyota Prius  c Toyota Yaris Kia Soul
Compact Car Toyota Prius v Toyota Matrix Honda Civic
Mid-size Car Toyota Camry Subaru Outback Honda Accord
Full-size Car Toyota Avalon Dodge Charger Chrysler 300
Entry Luxury Car Mercedes-Benz CLA-Class Volvo XC70 Lexus ES350
Luxury Car Lexus GS Series Audi A7 Mercedes-Benz E-Class
Premium Luxury Car Porsche Panamera Mercedes-Benz S-Class Mercedes-Benz CLS-Class
Premium Sports Car Chevrolet Corvette Porsche Boxster Porsche Cayman
Sports Car Dodge Challenger BMW 2 Series Mazda MX-5
Small Pickup Toyota Tacoma Honda Ridgeline Nissan Frontier
Full-size Pickup Toyota Tundra GMC Sierra 1500 GMC Sierra HD
Minivan Toyota Sienna Honda Odyssey Kia Sedona
Full-size Van RAM ProMaster Mercedes-Benz Sprinter Nissan NV Vans
Compact Commercial Van RAM Van Ford Transit Connect
Compact Crossover/SUV Jeep Wrangler Nissan Xterra Toyota RAV4
Mid-size Crossover/SUV Toyota FJ Cruiser Toyota 4Runner Toyota Highlander
Full-size Crossover/SUV Chevrolet Tahoe Toyota Sequoia Chevrolet Suburban 1500
Compact Luxury Crossover/SUV Mercedes-Benz GLK-Class Audi Q5 Range Rover Evoque
Mid-size Luxury Crossover/SUV Porsche Cayenne Lexus GX460 Lexus RX350
Full-size Luxury Crossover/SUV Mercedes-Benz G-Class Land Rover Range Rover Sport Land Rover Range Rover