So what’s an above average deal on a passenger car with an average price?
First you need to know the average transaction price of a new car in Canada. In 2011, it was $26,637, according to DesRosiers Automotive Consultants, noting the average went down by 0.3 per cent from 2010. The whole marketplace was on average a better deal, then.
DesRosiers determined this by taking the total transaction value for vehicles bought in Canada and the total number of units purchased (as supplied by Statistics Canada), then dividing the two. Voila: the average price of a vehicle.
“If you factor in quality and technology improvements, the average REAL price of a vehicle has actually gone down quite a bit this past decade,” adds company president Dennis DesRosiers. “Today’s new vehicles represent a much better value-for-money compromise than a decade ago.”
Just as interesting, DesRosiers points out that transaction prices for passenger cars built in Japan decreased by 3.8 per cent.
“In 2011, the average North American-built passenger car traded for $24,385 while its Japanese counterpart sold for $23,840. Historically, Japanese-built passenger cars have typically commanded equal or slightly higher values than North American-built passenger cars,” he notes.
On top of that, average vehicle prices have increased only 1.1 per cent per year since 2000. That is less than the consumer price index for all goods in Canada, he notes, suggesting the competitiveness of the Canadian marketplace for new cars is largely the reason why prices have been kept in check.
Now before you dive directly to the Comments section to vent your spleen about prices for new cars in Canada, which are outrageously high compared to the United States, hang on. Yes, in some instances you can get a better price on a similar or even a nearly identical car in the U.S., but cross-border deals are not quite what they were a few years back.
It is, in fact, worth calculating all the costs associated with importing a vehicle into Canada – including the time spent in filling out paperwork, working with a customs broker, sorting out warranty details and even federalizing a U.S.-sourced car for Canadian roads. Sure, anyone with the will and resources – including the time – can bring a car in from the U.S. The question to ask is, is it worth it when all is said and done?
Okay, some of you will now race off to the Comments section before reading another word. You know who you are; away with you! The rest of you might be interested to learn that DesRosiers has numbers showing Canadians have been buying a lot of vehicles in Canada over the last decade.
“My guess is that Canadians recognize a bargain when they see one. Sales this past decade are the best on record,” he notes, pointing out that total registrations versus total population of people 16-plus years of age has increased from only 70.1 per cent in the year 2000 to 78.8 per cent in 2012.
Why the surge in new car ownership? Better prices, more choice and much better technology. As most of us learn, adds DesRosiers, driving your own car is usually more convenient and often more affordable than taking public transportation.
“Increases in Canadian ownership levels must also be driving the social policy wonks absolutely nuts,” he says. “They are forcing the OEMs (original equipment manufacturers) to move rapidly on fuel efficiency improvements to curb gasoline consumption, but every passing year sees vehicle ownership levels increasing. The result is that many more vehicles are on the road consuming gasoline.”
And because today’s vehicles last so much longer than ever before, all those additional vehicles are going to stay on Canada’s roads for a very, very, very long time.
“This scenario is a tree hugger’s nightmare,” notes DesRosiers. “There’s no easy way to address this issue short of legislating older vehicles off the road. They do this in Japan, but I can’t imagine any North American politician forcing consumers to move to younger, more fuel efficient vehicles.”
For our part at Deals of the Week, we went looking for four great deals on cars priced around $26,000-$27,000 – the average transaction price in 2011. Deals of the Week noticed the $4,000 rebate on a 2012 Ford Mustang coupe with a sticker price of $26,999. You could do better with some sort of dealer discount and by taking advantage of whatever is available in the form of a dealer holdback.
At Honda, a new Accord sedan at $26,090 has a $2,000 factory-to-dealer rebate in play, while at Kia, a $26,695 Optima sedan could be discounted by as much as $2,500 or more. Finally, one of the newest additions at General Motors is the Verano sedan, which under GM Canada’s Cash for Leases program might be discounted by $1,500 for the right buyer. Plus there are interest rate offers on the table.
As usual, Deals of the Week obtained pricing information from www.carcostcanada.com, among other sources. Consult your dealer for all the details. In the meantime, here are the numbers.
2012 Ford Mustang Coupe V6 Premium
- MSRP: $26,999
- Freight, dealer prep, air conditioning tax: $1,600
- Dealer discount (estimated): $800
- Factory discount: $4,000 (Delivery Allowance factory-to-dealer rebate)
- Taxable subtotal: $23,799
- Total price with 13 per cent HST: $26,892.87
2012 Honda Accord sedan SE Auto
- MSRP: $26,090
- Freight, dealer prep and air conditioning tax: $1,740
- Dealer discount (estimated): $900
- Factory discount: $2,000 (Non-stackable Trading Dollars factory-to-dealer rebate)
- Taxable subtotal: $24,930
- Total price with 13 per cent HST: $28,170.90
2012 Kia Optima EX Auto
- MSRP: $26,695
- Freight, dealer prep, AC tax: $1,555
- Dealer discount (estimated): $850
- Factory discount: $1,200 (3 Months Payments on Us factory-to-dealer rebate)
- Taxable subtotal: $26,200
- Total price with 13 per cent HST: $29,606
- Factory discount: $1,250 (Finance &amp; Lease Pull-ahead Bonus Program factory-to-customer rebate)
- Final price: $28,356
2012 Buick Verano 1SL
- MSRP: $27,620
- Freight, dealer prep, AC tax: $1,595
- Dealer discount (estimated): $1,200
- Taxable subtotal: $28,015
- Total price with 13 per cent HST: $31,656.95
- Factory rebate: $1,500 (GM Cash for Leases factory-to-customer rebate)
- Final price: $30.156.95
- Note: 2.49 per cent finance rates for 36 months
Pricing information source: www.carcostcanada.com. Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Dealer discounts are negotiated with the customer on a case-by-case basis.
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