“As consumers shift their desires to things that are SUV in nature, then it becomes more difficult to sell a subcompact or compact car as a used vehicle, too,” said Brian Murphy, CBB’s vice-president of research and editorial in an interview.
It’s important, said Murphy, because it makes new sedans (luxury segment excepted) a less attractive value proposition in an era when 55 per cent of new-vehicle loans have 84-month terms, some as long as 96 months, according to J.D. Power PIN Automotive Metrics data.
The most recent report found 43 per cent of Canadian new-car transactions involve a trade-in and about 30 per cent of those buyers had negative equity on that trade, the gap averaging almost $7,000. That difference ends up being lumped into the new vehicle’s financing, creating an extra credit burden.
“It doesn’t mean the deal won’t go through,” said Murphy. “The concern is you then just roll that debt into the next car, your monthly payment’s much higher.”
It’s advantageous for buyers to consider retained value when they go shopping, he said, because they’ll be better off in the end.
CBB named Subaru, Toyota and Porsche as overall retained-value brand winners in the car, truck/utility and luxury categories, respectively.
The Toyota FJ Cruiser utility vehicle, now out of production, took the title of the highest retained value, at a record 83 per cent of suggested list price.
Toyota’s Prius C hybrid dethroned perennial winner Honda Fit in the subcompact category.
Other category winners:
Subaru XV Crosstrek (compact car), Toyota Camry (midsize car), Toyota Avalon (full-size car), Volvo XC70 (entry-level luxury car), Porsche Panamera (premium luxury car), Porsche Boxster (premium sports car) and Dodge Challenger (sports car).
In truck categories:
Toyota Tundra (full-size pickup), Honda Odyssey/Toyota Sienna (minivan, tie), Mercedes-Benz Sprinter (full-size commercial van), Nissan NV200 (midsize commercial van) Toyota Sequoia (full-size SUV), Audi Q5 (compact luxury SUV), Porsche Cayenne (midsize SUV), Mercedes-Benz G-Class (full-size luxury SUV).