The Value – Issue #10: We Live in Electric Times – By Brian Murphy

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:

____________________________________________________________________________
There’s an interesting saying that I’ve always liked, “May you live in interesting times”.   Allegedly its origin derives from a somewhat sarcastic Chinese curse. That said, I think it applies nicely to the situation we’re at today, with respect to Electric Vehicles (EVs).  Times are truly very interesting when it comes to all things EV.

I selected this month’s topic by popular demand, it seems that EVs are one of the most frequent topics discussed, when we meet with our clients.  Many of us, including myself, have a significant professional curiosity about the future of transportation in general.  We believe that more and more EVs and Plug-in Hybrid Electric Vehicles (PHEVs) are coming to the nation’s driveways but are generally uncertain as to how this will all roll out.

So, if we look out over the next few years, what should we expect to see?  I believe we will see more and more normalcy, as EV’s become quite common causing the negativity surrounding EVs to eventually fall by the wayside.   EVs will become business as usual, a new electric normal.

Admittedly the number of EVs and PHEVs being sold today is still small.  However, you might be surprised to learn the average sales tempo this year is just below 4,000 units per month, which represents much more rapid sales growth, this year.  This growth is occurring for the simple reasons that there are more and more electric products being introduced, while more consumers are starting to see the merit in them.  Interestingly the availability of many EVs are constrained by factory capacity, as manufacturers can’t meet demand, suggesting that sales could be much higher.  Often customers face long and uncertain wait times, a real turn-off for many shoppers.

Early EV’s faced fundamental challenges throughout many iterations, which hampered mass adoption and even earned them a bad reputation.  I compare these early EVs to black and white televisions of days gone by, that some of you may remember.  Sure, there was an image on the screen, but there was a lot to be desired about the whole experience.

I vividly recall several years ago, when I had one of these “black and white” EVs to drive on loan from the manufacturer.  Each evening, before I went to bed, I would verify my travel plans on Google Maps to decide if the EV would make it or not.  The limited range (well below 200km) made them a great second car, and only a decent primary vehicle, if your commute was reasonably short and predictable.  The next generation of EV’s offers ranges well over 200km and some up to 400km making range less of a concern for most.

CBB conducted some research earlier this year with IPSOS and found 26% of Canadians would consider buying an EV, and 21% would consider a PHEV if gas prices continued to rise.  We had been on a bit of a holiday from high gas prices, that did not help the adoption of electric vehicles.  Now that we are back to gas price levels approaching record highs, this should help “fuel” greater consumer interest in EVs and PHEVs.

A key drawback of EV’s to date, is that they have been very poor at retaining their resale value over time.  Of the five worst performers for retained value in Canada, based on Canadian Black Book’s data, three of them are EV’s.  This poor performance and resulting weaker forecasted residual values, make them more expensive to lease for consumers.

That being said, I don’t think EV’s will be at the bottom of the class for long.  What I expect over the next 10-15 years is that EV’s will inevitably become more normal, in terms of their retained value performance.  Exactly when quickly this happens really comes down to consumer behavior.  The market acceptance of hybrids is still an ongoing process and we have had those for almost 20 years.

Do consumers buy into the whole EV value proposition?  That is the multi-billion-dollar question.  OEM’s are investing a staggering portion of their product development budgets and converting factories to build EVs.  At this point however, these moves are still highly speculative.  Will people pay more for a vehicle that has some potential trade-offs for the benefits of a battery powered future?  How will people view used EV’s later in their life cycle after some battery capacity has diminished?

What makes me a confirmed optimist about the future of EVs, are the products themselves.  At Canadian Black Book we are fortunate to be able to evaluate many vehicles products, often before they see the showroom, which helps greatly in our forecast of future residual values.  Every time we drive an EV they are so much better as compared to those early black and white tv’s EVs.  I don’t think we are at the flat screen high definition tv stage yet, but we have leapt forward to full colour in a hurry.

There are several new vehicles that illustrates that sentiment.  The Chevrolet Bolt being one of the best examples.  It is priced less than $45,000 and can go 383 km on a charge.  Its driving experience and onboard technology is impressive and easy to use. At the luxury end of the spectrum is Jaguar’s new I-PACE all electric performance SUV, which has similar range to the Chevrolet, but drives like a Jaguar and is fantastic.  Tesla is now building and delivering “affordable” model 3’s at an impressive pace, despite the frequent Twitter drama.  Hyundai has both an electric and a plug-in Ioniq and a 400km range Kona coming.  The Nissan Leaf, now in its second generation has over 240km of range. Volkswagen’s eGolf is great fun to drive, will go 200km and is packaged in that loveable Golf platform.  Audi just announced the e-Tron, Mercedes-Benz the EQC, Porsche allegedly is making an announcement soon, it is relentless progress.

There is a lot on the EV tv these days, the black and white tv days are now in the rear-view mirror.  Interesting times are indeed here.

The Value – Issue #10: New Dealer Tool Helps Bridge Gap Between Sales and Service

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:

____________________________________________________________________________
Vin-UP Launch in Canada Provides Acquisition Tool in the Service Bay

Mobility Sales Solutions has partnered with Canadian Black Book to power its Vin-UP offering.  The ‘in-lane’ service customer vehicle upgrade program has now launched in Canada.

The tool works through a physical handheld scanner which vin-scans vehicles while in service and outputs a coupon with a buy-back value, in combination with OEM and dealer incentives.  Canadian Black Book is the exclusive provider of valuation data to power the system as well as the sale arm for Canada.  Vin-UP is a lead generation and vehicle acquisition tool used in service departments to help feed the sales pipeline.

“Fewer and fewer customers enter the dealership from the front door today.  Vin-UP provides a very positive way to generate qualified leads from those customers entering from the service entrance,” says Bruno Lucarelli, President, Mobility Sales Solutions LLC.  “The approach is less intrusive, whereby the service lane specialist or used car manager offers to buy a customer’s car versus a sales rep trying to sell them a car,” he adds.

The theory being that, offering to purchase a client’s vehicle first is a soft sell strategy that can be easier for some to digest compared to hard selling showroom floor sales tactics.  Transitioning customers from the service bay to the sales floor is a method to retain existing clients so not to lose them to other competing dealerships.

“Canadian Black Book has come a long way from our days selling little black books to dealers.  Today we are continuously looking for innovative ways to help dealer sell more cars using our data.  This is certainly a good example of that,” says Brad Rome, President, Canadian Black Book.

Dealers would choose the vehicle model year(s) that they want to target for buy-back.  Service centers would scan all vehicles, which builds CRM data that can be easily integrated into DMS systems.  Qualified vehicle owners receive an instantly generated offer at which point they could be transitioned to sales.  If clients are not ready to sell/buy, the scan will be kept in the dealership database for future marketing and sales efforts.

As part of the Canadian launch, Vin-UP was piloted over the past 2 months, at BMW Canbec in Montreal, part of the AutoCanada Dealer Group.  “We are forever looking for ways to produce new quality leads and Vin-UP has opened our eyes to a new friendly approach to generating leads from our own service area,” says Martin Taillandier, General Manager, BMW Canbec.   “We will certainly be moving forward to deploy this tool on a full-time ongoing basis.”

The service is based on either a monthly subscription fee for the Vin-UP unit, with the dealership following up leads using its own BDC or the program offers lead follow-up services, provided by Suivitel, which only charges a fee per scheduled appointment.

-30-

For interview requests or questions, please contact:

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

The Value – Issue #10: TalkAUTO – Canada’s Premier Automotive Industry 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:

____________________________________________________________________________
By: Rui Nunes, Director Sales & Customer Experience, Canadian Black Book

From humble beginnings in 2012 to its widespread visibility today, 2018 TalkAUTO is the 7th edition of this premier Canadian auto industry conference.  The event has grown from just over 100 attendees in year one, to over 600 who registered last year, cementing itself as perhaps the most sought after Canadian automotive conference of its kind.

Being relatively new at Canadian Black Book, I have personally attended the conference only once prior in 2017.  Before last year’s TalkAUTO, not knowing what to expect, I had no frame of reference for the special place this conference holds in the hearts of its organizers, delegates and sponsors from across the auto industry.

As the lead person tasked with procuring sponsorships for the event, I soon began to understand how TalkAUTO differs from competing conferences and the unique value proposition it provides.  TalkAUTO is run as a not-for-profit conference.  It is through the generosity of conference sponsors that this event continually surpasses previous years’ expectations.  A key reason attendees love it – it is not about selling, it is about gaining valuable insights from some of the industry’s leading authorities. Dealers, in particular, find the content to be specifically relevant to the rapidly changing retail landscape.

TalkAUTO Canada was conceived as a thought-leadership conference, a place for senior automotive executives to liaise and network professionally, at a conference that emphasizes keynote speechers and panel discussions.  The emphasis is to discuss innovation, solve challenges and break-down the latest trends across the industry, at a small, intimate and personal conference.  Oh, did I mention admission is free to all attendees?

As compelling as these reasons are for attending and sponsoring the event, none are more convincing than the outstanding quality of our speakers and panelists.    Simply put, those in attendance appreciate hearing from industry heavyweights.  A “who’s who” of leading movers and shakers.  This year, TalkAUTO is already generating a buzz for securing fascinating keynote speakers from inside and outside the automotive industry.

For example, Sheryl Connelly, Futurist at Ford Motor Company, will discuss how shifting global priorities, political upheaval and social inequity are challenging how companies navigate through this time of uncertainty.  Or Dan McGrath, COO at Cineplex Entertainment who will discuss his company’s resurgence and response to online streaming services.  We specifically included a keynote speaker from the entertainment industry to learn how Cineplex pivoted their brand in the face of adversity and how they adapted to massive disruption.

Our forward-looking theme for this year is “Who moved my keys?  Adapting to change in a new marketplace”.  We’re hinting at the disruption we are seeing in the Canadian automotive landscape.  Everything from digital retail, ‘Big Data’, car sharing services, OEM subscription services, telematics, autonomy, EVs, etc.  As this evolves, the industry and particularly dealers need to prepare for a far different revenue model.  These are some examples of the types of hot button topics that our speakers and panelists will ponder and challenge the audience to consider.

Automotive retailers will be particularly interested in the moderated Dealer Panel discussion between innovative automotive retail groups from across Canada.  Retailers will benchmark best practices with their peers, share a wide range of business challenges and discuss rising trends with a unique regional perspective from coast-to-coast.

From the beginning, Canadian Black Book and J.D. Power partnered to create and host this unique automotive conference.  These two auto industry icons work closely with all of our sponsors to find the perfect fit for their brand.  There is no one size fits all approach.  No two organizations are the same and it’s of paramount importance to understand their specific needs, advertising goals and corporate culture.  I believe this personalized approach makes TalkAUTO different from competing conferences and reinforces the fierce loyalty of our sponsors.  Many have been with us since the very beginning and it is through their continued support, we are able to keep TalAUTO a ‘free to attend’ conference.

After asking one particular sponsor why they chose to promote their brand at TalkAUTO, their answer resonated with me – they see the conference as a coming out party for their brand after recently listing on the TSX Venture Exchange.  This sponsor is acutely aware that the calibre of the audience, under one roof, with all eyes on their brand.  This type of exposure elsewhere could be costly, even hard to find.

Another sponsor described TalkAUTO as an excellent opportunity to benchmark professionally and keep their finger on the pulse of the auto industry.  A one-stop-shop where their management team can validate and compare notes with their peers.

I’m looking forward to another great conference this year as we openly discuss the challenges, opportunities and trends impacting the Canadian automotive space.  TalkAUTO takes place on November 7, 2018 at the Universal Eventspace in Vaughan, ON.

The Value – Issue #10: September 2018 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:

____________________________________________________________________________
The Canadian Black Book Used Vehicle Retention Index for September tied the all-time record from the previous month at 103.6.  This is a definite indicator of just how very strong retained values for Canadian used vehicles continue to be.  The all-time lowest level of the index was set back in February 2009 of 74.8, in the midst of the recession.  Since that time values have climbed 28.8 points to the current record level.   These record levels have been propelled by very favorable economic conditions, a tight supply of used vehicles, and more recently, a dollar that continues to favour a large volume of exports of used vehicles to the U.S. market.

Compared to the same time last year the compact luxury SUV segment is one of the biggest gainers, with an impressive leap of 29.5.  Mid-size car is showing renewed signs of strength with a gain in retained value of 4.8, and subcompact moves up by 7 points.

On the downside, full-size vans (-3.7), luxury cars (-2.7) and mini-vans (-5.3) saw weaker values compared to a year ago.  Compared to last month, premium sporty cars saw one of the biggest retreats at a little over 1.5 points and subcompact cars lost almost 4 points from last month.

The recent agreement on the USMCA free-trade agreement will provide some much needed certainly for the industry at large, and specifically used vehicle prices as it relates to this index.   If the U.S. administration had put significant tariffs on used vehicles, this would have created some major swings in used vehicle pricing.

The upwards trend in vehicle values has had an impressive eight year positive trend, watch this space as we continue to monitor and report on this key indicator for the Canadian used vehicle market.

To download the Septembrer 2018 Index Click Here.

LA VALEUR – Numéro 9: Le plafond des avances de prêt sur les véhicules de votre concession? Les gestionnaires devraient être au courant!

Bienvenue au Canadian Black Book – La valeur. Notre objectif est de fournir à nos clients et à nos partenaires des nouvelles, une mise à jour des événements, de nouvelles initiatives et l’opinion de la source de confiance du Canada pour les valeurs des véhicules et les perspectives automobiles. Vous trouverez ce qui suit dans ce numéro :

____________________________________________________________________________
Par Yves Varin, directeur national du développement des affaires, Canadian Black Book

Le gestionnaire d’aujourd’hui doit tenir compte de nombreuses données pour finaliser les accords de prêt et conclure les ventes. Les données se présentent sous toutes les formes et toutes les tailles, en provenance du client, des banques, des logiciels internes et bien d’autres. Comme c’est le cas et comme on sait que le temps des clients compte par-dessus tout, il faut à tout prix que le gestionnaire puisse toujours avoir en main TOUTES les données qu’il lui faut.

Pour s’y retrouver dans ce labyrinthe de données, le gestionnaire doit avoir une idée claire d’un « rapport prêt/valeur » donné avant de finaliser l’opération de financement. Armé d’une valeur de prêt maximale précise, il supprime les risques et peut faire gagner un temps précieux au client et au concessionnaire.

De nos jours, la plupart des banques et des prêteurs à risque mettent au point leurs programmes de financement de détail en fonction des valeurs de gros moyennes Canadian Black Book, en ajoutant un pourcentage qui varie entre 120 et 180 %. L’excédent sert à couvrir les coûts des produits du marché secondaire ou, dans de plus en plus de cas, à absorber les capitaux propres négatifs résultant du contrat antérieur. Sans les bons outils, le calcul de ce pourcentage excédentaire est loin d’être une science exacte. Avec les bons outils, il peut l’être.

Ce montant excédentaire n’est pas basé sur un actif garanti (comme le véhicule en soi). Par conséquent, il est vulnérable et peut même être douteux. Aujourd’hui, si le crédit du client est admissible, l’institution financière approuve ce montant douteux, sous pression de respecter les quotas dans un environnement bancaire hautement concurrentiel. La concurrence oblige les prêteurs à approuver ces « ratios excédentaires », qu’ils soient exagérés ou non.

Dans l’ensemble, les prêteurs ont déjà accès à des données précises sur l’évaluation par des tiers directement intégrées dans leurs systèmes d’évaluation. Ces institutions financières et autres établissements de crédit se basent sur le PDSF, les valeurs moyennes de gros, les valeurs de prêt et les données sur la juste valeur marchande, ainsi que sur leurs propres conditions de prêt pour évaluer la valeur de l’actif donné en garantie. Cette matrice ou carte de pointage en constante évolution, qui varie d’une institution financière à l’autre, est pour ainsi dire leur propre « sauce secrète ».

Bref, voici ce qui en est! Presque tout cela peut être fait chez le concessionnaire afin d’accélérer le processus et de permettre au gestionnaire de rapidement connaître le « rapport prêt-valeur final ». Il est tout à fait logique que le gestionnaire ait en main les mêmes données d’évaluation avant même de présenter une demande de crédit au prêteur. Connaître à l’avance le plafond de l’avance sur un véhicule donné permet à l’administration de connaître en toute franchise le montant à ne pas dépasser, permettant à l’opération de s’inscrire dans les paramètres du prêteur. Avec cette information, les vendeurs peuvent mieux jumeler les véhicules aux acheteurs.

On peut facilement résumer ce processus en trois étapes. Premièrement, acheter des véhicules de qualité aux enchères ou les prendre en échange ; deuxièmement, jumeler le bon véhicule à l’acheteur en puissance (surtout pour les emprunteurs à risque); et troisièmement, soumettre la demande au prêteur en la remplissant d’avance pour satisfaire ses critères.

De cette façon, les transactions n’exigeraient pas un examen qui prend du temps, par un agent de crédit et, plus souvent qu’autrement, elles pourraient être approuvées sur-le-champ. Ces transactions auraient peut-être été approuvées quand même, mais on gagne ainsi du temps et on sait très bien que pour conclure une vente, chaque minute compte!

Par le passé, le gestionnaire avait généralement en main un guide Black Book dont il pouvait tourner les pages pour obtenir ces données. Pas de devinette… une simple démarche analogique. La révolution technologique et le passage au numérique chez les concessionnaires ont changé pour toujours cette technique commerciale qui était autrefois la norme. Les prêteurs n’ont pas beaucoup changé au fil des ans, tandis qu’une nouvelle génération de gestionnaires s’est détournée des tactiques éprouvées. En fait, il y existe des outils numériques contemporains capables de combler cette lacune. Oui, il y a des frais, mais si on les compare aux réserves bancaires qui s’élèvent rapidement à 1 000 $ par transaction, un dollar par jour par utilisateur pour obtenir les bonnes données au bon moment, c’est une aubaine.

Les concessionnaires propriétaires devraient encourager leurs gestionnaires à adopter ces pratiques exemplaires et à utiliser les bons outils, en suivant l’exemple de ce que font les prêteurs. L’objectif est simple …optimiser les chances de réussite de chaque opération de financement.

LA VALEUR – Numéro 9: Un don de bienfaisance de 100 000 $ a pu être versé grâce au Tournoi de golf commémoratif Kathy Ward Canadian Black Book 2018

Bienvenue au Canadian Black Book – La valeur. Notre objectif est de fournir à nos clients et à nos partenaires des nouvelles, une mise à jour des événements, de nouvelles initiatives et l’opinion de la source de confiance du Canada pour les valeurs des véhicules et les perspectives automobiles. Vous trouverez ce qui suit dans ce numéro :

____________________________________________________________________________
Le 10 septembre 2018, Markham, ON – Pour la vingt et unième année du tournoi, celui-ci a été rebaptisé Tournoi de golf commémoratif Kathy Ward Canadian Black Book, en hommage à l’ancienne directrice générale de la société hôte. Pour couronner une année extraordinaire pour le tournoi, on a annoncé que la somme de 109 680 $ a été recueillie pour la Fondation Tim Horton pour les enfants depuis le décès de Kathy en décembre dernier.

Depuis sa création en 1997, le tournoi a permis d’amasser plus de 500 000 $ pour l’organisme de bienfaisance de choix de feu Kathy Ward. Le mari de Kathy, Harm DeJonge, et leur fils William DeJonge-Ward, se sont généreusement engagés plus tôt dans l’année à contribuer une somme équivalente aux dons faits en son nom, jusqu’à concurrence de 50 000 $. Grâce au tournoi CBB, aux dons en ligne et aux fonds recueillis par la TADA (Trillium Automobile Dealers Association) lors de son tournoi de golf en août, la contribution de Harm et de William a été maximisée, faisant de cette année une année exceptionnelle de dons à la Fondation.

« J’ai peine à trouver les mots pour dire à quel point nous sommes reconnaissants ici chez Canadian Black Book de toute la générosité de l’industrie automobile cette année envers l’organisme de bienfaisance de choix de Kathy, a déclaré Brad Rome, président, Canadian Black Book. Tous les golfeurs, la TADA, Harm et William, se sont vraiment mobilisés et ont fait des dons non seulement fort appréciés, mais sans précédent en ce qui concerne nos efforts de collecte de fonds jusqu’ici. »

Le tournoi de golf commémoratif Kathy Ward Canadian Black Book se déroulait dans l’un des principaux terrains de golf privés du Canada, le Magna Golf Club à Aurora, et accueillait des golfeurs de l’industrie automobile de partout au Canada. Le tournoi a été une fois de plus complet, et malgré le froid et la pluie, plus de 100 golfeurs ont bravé le mauvais temps pour contribuer à faire de ce tournoi un grand succès.

« William et moi sommes déterminés à honorer l’ambition de Kathy d’envoyer plus de 1000 enfants défavorisés dans les camps Tim Horton (un coût d’environ 1000 $ par enfant), a déclaré Harm DeJonge. Avec l’appui de la société Canadian Black Book, de tous ses partenaires, de ses commanditaires et du dynamisme de tous les golfeurs, nous sommes un peu plus qu’à mi-chemin de réaliser l’ambition de Kathy! Il reste encore à faire, mais je suis heureux que les participants du tournoi aient été là pour partager le rêve de Kathy et y participer. Continuons à réaliser son rêve! » a-t-il ajouté.

« Kathy était l’une de mes grandes amies et une grande amie de la TADA. C’est pour nous un honneur de verser les fonds amassés à une cause aussi chère au cœur d’une icône de l’industrie automobile canadienne », a déclaré Todd Bourgon, directeur général de la TADA.

Les quatre gagnants du tournoi de format « Vegas à quatre » sont Martin Douglas, Mark Would, John Christianson et Omar Khan, qui a marqué le score impressionnant de -7.

Comme par les années passées, quatre des principales institutions financières du Canada sont les partenaires commanditaires du tournoi : Banque de Montréal, Banque Royale du Canada, Banque Scotia et TD Canada Trust.

LA VALEUR – Numéro 9: Indice de rétention des valeurs des véhicules d’occasion – août 2018

Bienvenue au Canadian Black Book – La valeur. Notre objectif est de fournir à nos clients et à nos partenaires des nouvelles, une mise à jour des événements, de nouvelles initiatives et l’opinion de la source de confiance du Canada pour les valeurs des véhicules et les perspectives automobiles. Vous trouverez ce qui suit dans ce numéro :

____________________________________________________________________________
L’indice canadien des valeurs retenues des véhicules d’occasion Canadian Black Book a établi un nouveau record, soit 103,6 pour le mois d’août, surpassant ainsi le record du mois dernier. La vigueur de l’économie, conjuguée à des taux de change favorables pour l’exportation de véhicules d’occasion vers les États-Unis, ont contribué à maintenir les valeurs retenues à des niveaux jamais vus pendant les treize années couvertes par l’indice.

En passant en revue les segments, nous constatons que la voiture compacte, bien qu’en baisse de deux points par rapport au mois dernier, reste nettement supérieure de 12 points à sa valeur d’il y a douze mois. Les VUM et VUS de luxe compact restent aussi populaires qu’on pouvait s’y attendre. Ils sont en baisse d’un point par rapport au mois dernier, mais conservent des niveaux presque records et en hausse de 31 points par rapport à la même période l’an dernier, indiquant clairement que ce type de véhicule est très recherchés. Les véhicules multisegments pleine grandeur ont reculé de deux points ce mois-ci et restent à des niveaux stables, mais en baisse considérable par rapport aux niveaux records de l’été 2016. Tout comme les VUS pleine grandeur, les camionnettes conservent leur force avec un gain de près de deux points par rapport au mois dernier, toujours sous les niveaux records de l’été 2016.

Les voitures de luxe ont perdu quatre points par rapport au mois dernier et par rapport à leur niveau record établi en février de cette année. Les voitures intermédiaires sont en hausse de près de six points ce mois-ci, établissant un nouveau record pour un segment qui figure sur la liste des espèces en voie de disparition pour quelques fabricants. La sous-compacte, qui a connu des difficultés ces derniers temps, a affiché un gain de près de 12 points ce mois-ci pour se rapprocher de son précédent record d’il y a treize ans. La hausse des prix du carburant y contribue certainement, de même que l’amélioration de l’offre de produits dans ce segment.

Certes, au moment de la rédaction de ce commentaire, tous les yeux de l’industrie se tournent vers les renégociations de l’ALENA. Si des types de véhicules ou des pays sont visés par les tarifs douaniers des États-Unis, nous nous attendons à ce que la valeur de ces véhicules change drastiquement au cours des mois qui viennent.

CLIQUEZ ICI POUR TÉLÉCHARGER L’INDICE DE RÉTENTION DES VALEURS DES VÉHICULES D’OCCASION CANADIAN BLACK BOOK DE JUILLET (PDF)

The Value – Issue #9: August 2018 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:

____________________________________________________________________________
Canadian Black Book’s Used Vehicle Retention Index has set a new record high level of 103.6 for August, besting the previous record set last month.  The strong economy, along with favorable exchange rates for continued used vehicle exports to the US, have helped keep retained values at levels not seen during the thirteen years the index covers.

Sifting through the segments we do see that Compact Car, although down 2 points from last month’s mark remains a significant 12 points above its value 12 months ago.  Compact Luxury CUV/SUV has remained as hot as you might expect.  It is down 1 point from last month but remains at near record levels and up 31 points from the same time last year, clearly an in-demand vehicle type.  Full-size Crossovers are down 2 points this month and remain at stable levels, but down considerably from record levels set in the summer of 2016.  Similar to the Full-size SUV’s, Pickup Trucks remain strong with a gain of almost 2 points from last month, still below record levels from the summer of 2016.

Luxury Cars are down 4 points of retained value from last month, and down from their record levels set in February of this year.  Mid-size cars are up almost 6 points this month, setting a new record level for a segment that is on the endangered species list for a few OEM’s.   Sub-Compact Car, which has struggled in recent times, has posted a gain of almost 12 points this month to come within striking distance of its previous record high from 13 years ago.  Higher fuel prices are certainly helping this along, as well as much improved product offerings in the segment.

Certainly, all industry eyes are on the NAFTA renegotiations, at the time of writing this commentary.  If any vehicle types or nations are singled out for tariffs by the U.S. it is our expectation that the coming months will see some very dramatic shifts in value.

To download the August 2018 Index Click Here.

The Value – Issue #9: Maximum Loan Advance on Any Vehicle On Your Lot? Business Managers Should Know!

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:

____________________________________________________________________________
By Yves Varin, National Director Business Development, Canadian Black Book

Today’s business manager has to contend with a lot of data to finalize lending agreements and close sales.  Data comes in all shapes and sizes, from the client, the banks, from internal software and more.  That being the case and understanding that customers’ time is at a premium, it is critical that the business manager is prepared with ALL the data they need, at a moment’s notice.

A key piece to this data puzzle, is for the business manager to have a clear sense of a given ‘loan to value ratio’ before finalizing the finance deal.  Armed with an accurate maximum loan value, takes out risk and can save valuable time for the customer and the dealership.

Currently most banks and sub-prime lenders build their retail finance programs based on Canadian Black Book average wholesale values, plus a percentage ranging from 120 to 180 per cent.  The overage is used to cover the costs of aftermarket products, or in an increasing amount of cases, to absorb negative equity resulting from the past contract.  If you are not using the proper tools, the calculation of this overage percentage is far from an exact science, but it can be.

This surplus amount is not based on any secured asset (like the vehicle itself) and therefore is inherently at risk and can be a guess.  What happens today, if the customer’s credit qualifies, is that the financial institution approves this questionable amount, under pressure to fill quotas in an environment of competitive banks.  Competition forces lenders to approve these ‘over-and-above ratios’, whether they are exaggerated or not.

Lenders, by and large, already access accurate third party valuation data integrated directly into their adjudication systems.  These banks and other lending institutions rely on MSRP numbers, average wholesale values, loan values and fair market value data in conjunction with their own lending conditions to assess the value of the collateral asset. This ever-evolving matrix or scoring card, which varies from one financial institution to another, constitutes their own “secret sauce”, so to speak.

So here’s the thing!  Much of the same can happen at the dealership level first, to speed up the process and put the business manager in a position of knowing what that ‘final loan to value ratio’ is quickly.  It makes so much sense for the business manager to get the same valuation data prior to submitting a credit application to the lender.  Knowing ahead of time what the maximum advance on a given vehicle is, gives the business office a clear understanding of what amount of dollars not to exceed, allowing the deal to fit within the lender’s parameters.  The trickle down of this knowledge is that sales associates can tailor their efforts to match vehicles to buyers.

Thinking of the process in three steps helps.  First, purchase quality vehicles at auction or via the trade-in; second, match the right vehicle to the prospective buyer (especially for sub-prime); and third, submit the application to the lender pre-populated to match their criteria.

Done this way, deals would not require time consuming manual reviews by a credit officer and more often would instantly acquire the approval.  Perhaps such deals would have been accepted regardless, however, in short, this saves time and we all know that in a vehicle sale – minutes matter!

Historically, it was the norm for the business manager to have a physical ‘Black Book’ on the desk to get this data.  There was no guess work, it was just an analog process.  The revolution in technology and shift to digital at dealerships has altered this once standard business office technique.   Lenders have not changed much over the years, while a new generation of business managers have steered away from proven tactics.  But there are contemporary digital tools available that can fill this gap.  Yes, there is a cost associated, but when compared to bank reserves that quickly add up to $1000 per deal, a dollar a day per user to get the right data at the right time, will be well worth it.

Dealer principals should encourage business managers to embrace these best practices and use the right tools, following the lead of what lenders are doing.  The goal is simple…to optimize the potential of each finance deal.

The Value – Issue #9: Canadian Black Book Kathy Ward Memorial Golf Tournament Raises Over $100k For Charity

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:

___________________________________________________________
Newly Named ‘Canadian Black Book Kathy Ward Memorial Golf Tournament’ Helps To Raise Over $100k For Charity in 2018

September 10, 2018, Markham, ON – For the twenty-first year of the tournament, it was renamed the Canadian Black Book Kathy Ward Memorial Golf Tournament, in honour of the host’s former long-time CEO.   To cap off a very special year for the tournament was the announcement that $109,680 were raised for the Tim Horton Children’s Foundation since Kathy’s passing last December.

Since inception in 1997, the tournament has raised over $500,000 for the charity of choice of the late Kathy Ward.  Kathy’s husband Harm DeJonge and their son William DeJonge-Ward, committed generously earlier in the year to match any donations made in her name, up to $50,000.  Between the tournament itself, website donations and money raised by the TADA (Trillium Automobile Dealers Association) at its golf tournament in August, Harm and William’s contribution was maximized, making this an exceptional year for donations to the foundation.

“I really don’t have the words to express how thankful we are at Canadian Black Book in recognizing how giving the auto industry has been this year towards Kathy’s charity of choice,” says Brad Rome, President, Canadian Black Book.  “All the golfers, the TADA, Harm and William, really stepped up and provided donations that are not only welcome, but really unprecedented for our fundraising efforts to date.”

The Canadian Black Book, Kathy Ward Memorial Golf Tournament was held at one of Canada’s premier private golf courses, Magna Golf Club in Aurora and hosted 120 golfers from the auto industry from across Canada.   The tournament was sold out once again and played on Monday September 10th, in extremely rainy and windy conditions.

“William and I are committed to honouring Kathy’s ambition to send over 1000 under privileged kids to Tim’s camps (a cost of approx.. $1000.00 per child),” says Harm DeJonge.  “With the support of Canadian Black Book, all of its affiliates, sponsors and the drive of all of the golfers, we are more than half way there to fulfilling Kathy’s ambitions!  Still a way to go, but thrilled that the tournament participants were there to share in Kathy’s dream and be part of that dream.  Let’s continue to fulfill her dream,” he adds.

“Kathy was a great friend to me and the TADA.  It was our honour to focus our fundraising on a cause so close to the heart of one of Canada’s auto industry icons.” says Todd Bourgon, Executive Director, TADA.

The winning foursome, in the scramble format tournament, were Martin Douglas, Mark Would, John Christianson, and Omar Khan, who carded an impressive -7.

As in previous years, the tournament’s partner sponsors are four of Canada’s premier financial institutions: Bank of Montreal, Royal Bank of Canada, Scotiabank and TD Canada Trust.