Last year saw Canada’s average new-car loan term eclipse 72 months, with terms longer than six years making up roughly 60 percent of the car loan portfolios of the country’s largest financial institutions.
This is just one key finding in Financial Consumer Agency of Canada’s recently released Auto Finance: Market Trends report, which highlights the very real problems posed by the current trend in loan-term growth.
Just six years ago, 2010’s average new-car loan term was 65 months. But with dealership’s increased emphasis on monthly payments and customer’s willingness to extend terms to get more car for what is perceived as less money in the short term, problems are arising.
FCAC is currently focusing its oversight and educational efforts into the market of longer-term loans by keeping a close eye on financial institutions and doing its best to help inform consumers.
"Recent trends in extended-term car loans have raised several concerns,” said Lucie Tedesco, FCAC’s commissioner. “Consumers must carefully examine their needs and their financial situation to ensure they can repay their car loans without undue strain, and with a full appreciation of the total interest charges and value of the car throughout the loan period."
According to the report, most Canadians continue to buy new vehicles roughly every four years, despite having an average loan term of over six, and many end up rolling negative equity into their new loans, which are getting longer and longer. Now, 72-, 84- and 96-month finance terms are becoming more and more common, with some even reaching as far as 108 months, and each accompanied by increasingly poorer interest rates.
"Consumers and auto dealers tend to focus on the monthly loan payments required for a car purchase. Few take issues such as negative equity into account when choosing between different car loan terms,” said Brigitte Goulard, FCAC’s deputy commissioner. “This is one of the reasons why FCAC will work with stakeholders to make sure that consumers are getting enough information and know which questions to ask."
FCAC says that the percentage of consumers in a negative equity position while trading in their vehicles has risen by 50 percent over the past five years – from 20 percent in 2010 to 30 percent in 2015.
The agency also believes the longer-term loans are contributing to the inflation of new-vehicle prices, the transaction costs of which are rising more than twice as fast as average monthly payments.
"Shopping around and asking questions when looking at different financing arrangements when purchasing a vehicle should be just as important as researching the type of car you want,” said Jane Rooney, FCAC’s financial literacy leader. “That is why FCAC has put together information to help people through this important financial decision."
To check out FCAC’s full report, click here. If you’re interested in learning more about the threat of increasingly longer-term auto loans, consider signing up for our upcoming Auto Remarketing Canada Conference, which will feature a panel of industry experts to discuss that very topic.
TRADER Corporation recently announced that it will be hosting the second annual Industry Day as part of the Canadian International AutoShow in Toronto.
Taking place on February 12 and featuring activities tailored for OEMs, agencies and automotive dealers, TRADER will also present an automotive sales and marketing event titled, “Carology: The Science of Selling Cars.”
The event will be free for industry professionals only and will include complementary early access to the AutoShow floor.
The Carology event will focus on how Canadian consumers shop for cars today, including their influences, where and how they research, how many dealerships they visit and recommendations for the industry to better meet their shopping desires.
Carology will feature an expert panel, including the following industry veterans:
- Scott Monty – CEO & founder, Scott Monty Strategies
- Nick King – Director of business intelligence & market research, AutoTrader UK
- Ian MacDonald – Director of consumer marketing & experience, autoTRADER.ca
- Kevin Coombs – Director of marketing intelligence, TRADER Corporation
For more information or to register for the event, click here.
Porsche Canada announced today it has broken ground on the site that will be home to a new Porsche Center as well as the company’s new headquarters.
The new dealership will be the fourth greater Toronto area Porsche Center, and will house the brand’s first training center in Canada. The training center will feature two work bays for Porsche Center personnel nationwide, the company announced.
The new headquarters will have room for about 50 Porsche Canada personnel. The company explained this move is “preparing the brand for the anticipated future growth in the Canadian market.”
The building, coming in at over 60,000 square feet, will also feature a dealership showroom that will be able to hold 27 new and pre-owned vehicles, as well as an underground garage with over 50 parking spots.
The facility is located in the northeast corner of highways 401 and 404, where approximately 600,000 vehicles pass daily, the company said.
"Porsche has been very successful in the Canadian market over the last few years where it became the fastest growing automotive brand in 2014," said Alexander Pollich, president and chief executive officer of Porsche Cars Canada. "Our customers have been embracing our products year after year; therefore it is only natural that we grow our footprint in order to serve them even better as well as pave the way for continued success."
Among those who attended the ground-breaking ceremony last week were Pollich; Detlev von Platen, executive member of the board sales and marketing at Porsche AG; as well as representatives from Agellan Capital Partners Inc., Traugott Building Contractors, Ware Malcomb design firm and the City of Toronto.
"Porsche is a brand that celebrates performance, passion, and dedication," said von Platen. "The team representing the brand has demonstrated these qualities as the past five record years have shown. It is with the greatest pleasure that I am present today for the beginning of construction symbolizing a materialization of the brand's vision for the Canadian market."
The countdown is on for the 2015 Calgary Dealer Talk conference, which will focus on topics ranging from marketing to sales, best practices and more.
After three successful years in Toronto, the half-day event — powered by Kijiji Autos and presented by CarProof — is heading to Calgary, Alberta for the first time this year.
The conference is scheduled for Oct. 1 at the Arts Commons, located at 205 8th Avenue S.E. in Calgary.
Conference organizers noted attendees will gain insights and practical information that will “change the way they do business,” focusing on topics such as transparency, digital marketing, building trust, retaining customers, and dispelling negative stereotypes in the automotive dealer industry.
This past May, Dealer Talk Toronto hosted nearly 250 attendees for the one-day conference, 57 percent of which were dealers — both dealership owners and employees.
“The conference has a very high referral and return rate with 95 percent of attendees indicating they would return to Dealer Talk again and 96 percent indicating they would recommend Dealer Talk to others,” conference organizers said.
Furthermore, the even has hosted representatives from Chrysler, Honda, Mazda, Nissan, Ford and more.
The fall Alberta event’s keynote speaker will be Marcus Sheriden, founder of The Sales Lion — a sales, marketing and personal development blog.
Sheriden — referred to as the “Web marketing guru” by The New York Times — also spoke at the Toronto 2015 Dealertalk event held this past spring. Attendees were privy to an energetic presentation that outlined Sheriden’s rags to riches story and how understanding consumer habits on the Web helped him find success.
For dealers, Sheriden focuses on the fact the industry needs to address consumer fears and anxieties around buying cars and how dealers can use the Internet and marketing to break down those barriers between dealer and shopper. His session this fall will be titled, “The Game Has Changed: How Sales & Marketing Changed Forever and What You Must Do About It.”
Also on tap for conference speakers is Stuart Bendall, sales manager and director of marketing at Gateway Toyota Scion. Bendell’s session is titled, “Straight From the Horse’s Mouth: A Dealer’s Perspective on Digital.”
Joey Coleman, the chief executive at Design Symphony — which works to help organizations retain their best customers and turn them into raving fans — will also be speaking at the event. His session will be titled, “The First 100 Days — A system that is designed to dramatically increase your customer retention & bottom line.”
Niel Hiscox, president of Universus Media Group Inc., will also be on board as the master of ceremonies.
“I’m so excited to expose our Western Canadian dealers to some of the most powerful speakers on the circuit,” said Ryan Thompson, head of sales at Kijiji Autos, and host of the upcoming event.
The day will kick off at 8 a.m. with registration and breakfast, and Thompson will welcome attendees with opening remarks for the conference.
Registration for the event is $99 for single tickets, and for those buying multiple tickets, the price goes down to $89.99.
Check out the full Dealer Talk agenda below, and register here. For more information, see dealertalk.ca.
| TIME |
EVENT |
| 8:00 a.m. |
Registration and Breakfast |
| 9:00 a.m. |
Welcome & Opening Remarks: Ryan Thompson |
| 9:15 am |
Keynote Speaker: Marcus Sheridan, The Sales Lion
Topic: The Game Has Changed: How Sales & Marketing Changed Forever and What You Must Do About It |
| 10:15 a.m. |
Networking Break |
| 10:45 a.m. |
Featured Speaker: Stuart Bendall
Topic: Straight From the Horse’s Mouth: A Dealer’s Perspective on Digital |
| 11:45 a.m. |
Lunch |
| 12:30 p.m. |
Featured Speaker: Joey Coleman
Topic: The First 100 Days – A System Designed to Dramatically Increase Customer Retention & Bottom Line |
| 1:30 p.m. |
Closing Remarks: Ryan Thompson |
Hyundai Canada announced this week a new initiative that can help get consumers ready for summer travel as well as offer dealership service departments a chance to connect with potential customers and show off the Hyundai lineup.
The new Hyundai Before Service Experience works to provide shoppers with the opportunity to have their vehicle inspected by a Hyundai technician.
The first of three Hyundai Before Service events will kick off at the Taste of Asia Festival this weekend north of Toronto and will continue at select venues across the province this summer, the company said.
At the event, Hyundai technicians will be on sit to offer free vehicle inspections, regardless of make, which will include fluid checks, light bulb checks, battery checks and tire pressure adjustments.
"The Before Service Tour brings attention to the importance of vehicle care and preventative maintenance. It reminds owners to take care of any issues that may have occurred or been ignored during winter," says Annie Deslauriers, director, customer services, Hyundai Auto Canada Corp. "Some preparation now will help ensure summer driving plans go as smoothly as possible."
Owners will also be able to ask technicians about their vehicle of potential maintenance.
But the automaker will get a chance to show off, as well, as the company will be educating shoppers on new vehicle technologies within Hyundai vehicles, including adaptive cruise control, Bluetooth functions and blind spot detection.
The automaker’s newest models will also be on display — many of which may drive some interest, as quality among the Korean makes continues to grow.
In fact, J.D. Power just released its 2015 Initial Quality Study ratings and results, and it seems Korean brands are continuing to improve while other more well-known brands may be feeling the impact of recent recalls.
Based on the results of this weekend’s event, Hyundai Canada will consider hosting two more this summer before making a decision on whether the program will be expanded nationally in the future.
"At Hyundai, we're constantly striving to exceed the expectations of our customers. The Hyundai Before Service Tour is about bringing the subject of vehicle care to convenient locations and gives consumers another reason to get excited about the summer," added Deslauriers. "Between an array of Hyundai vehicles, interactive displays of information, free inspections, sweepstakes and giveaways, the Before Service will have everyone ready for their summer road trips."
As we gear up for the inaugural DrivingSales Canadian Dealer Forum, we realize that automotive needs are unique to buyers in their geographical area, and after years of requests from Canadian dealers, we will head across the boarder to focus on content for Canadian dealers by Canadian dealers.
On June 22-23, 2015, attendees will discuss the trends both facing the automotive industry and hear from thought leaders from both inside and outside automotive that will affect how to run daily operations. They will walk away with actionable content to execute back in the dealership.
DrivingSales has completed a $1 million research project that follows the car buying behavior of 1,300 modern auto shoppers and purchasers. Jared Hamilton, Founder and CEO of DrivingSales, will share insight on the study.
To build on the momentum of brand experience, Toronto-based Jeremy Miller, will address the top dealer principals, general managers, dealership executive team members and automotive decision makers within Canada’s top dealerships.
Jeremy Miller, president of Sticky Branding, a branding and business development consultancy, will share his insight on what it takes to make your brand memorable and recognizable to your customers. Miller has interviewed thousands of CEOs and business owners across sectors to develop branding and marking strategies that make them stand out and drive sales.
The DrivingSales Canadian Dealer Forum is laser-focused on dealers and cutting-edge dealership operations and provides a venue for executive teams to collaboratively learn, become inspired, and take away actionable business plans for today’s dealership.
This year, the event will be held at the Hyatt Regency in Calgary. Attendees will engage with peers, including industry and external thought leaders to collaboratively navigate the current business challenges and opportunities of automotive retail.
To view the full agenda or register, visit http://canadiandealerforum.drivingsales.com/.
Use the discount code, AUTOREMARKETINGCA, and save $200.
Auto Remarketing Canada is a media sponsor of the upcoming DrivingSales Canadian Dealer Forum.
Next month, DrivingSales, which provides educational resources and performance data for dealers, will be bringing its automotive expertise to Canada.
The DrivingSales Canadian Dealer Forum is scheduled for June 22 and June 23 at the Hyatt Regency Calgary.
Auto Remarketing Canada is a media sponsor of the upcoming Calgary event, which is laser-focused on dealers and cutting-edge dealership operations.
The Canadian Dealer Forum was designed to be a practical conference providing ample opportunities for leading dealer insights and time to network and connect with progressive leaders in the automotive industry. These event attendees include dealer principles and general managers, dealership executive teams, department managers, 20 group members, Internet sales directors and more.
The event kicks off at 1:15 p.m. on June 22, and attendees will be privy to an array of speakers, including Jeremy Miller, author of the bestselling book, “Sticky Branding,” for a discussion focused on how to make your business stand out and create loyal customers.
The full agenda is available online, and the lineup also includes DrivingSales founder and chief executive officer Jared Hamilton and Tom White Jr., general manager of Subaru of Wichita, among others.
Registration is open for the event, and the early-bird price of $399 ends May 31. DrivingSales is also offering a special discount to Auto Remarketing Canada subscribers.
Subscribers may enter AUTOREMARKETINGCA to receive an additional $200 of the early bird special deal.
“The DrivingSales Canadian Dealer Forum is the exclusive automotive event in Canada for dealers by dealers. This event is laser-focused on dealers and cutting-edge dealership operations and provides a venue for executive teams to collaboratively learn, become inspired, and take away actionable business plans for today’s dealership,” said Mike Jeffs, editor at DrivingSales. “Attendees will engage with peers including industry and external thought leaders to collaboratively navigate the current business challenges and opportunities of automotive retail.”
Learn more at http://canadiandealerforum.drivingsales.com/ or email [email protected].
Announced at the recent Auto Remarketing Canada Conference in Toronto, CarProof, the event’s lead sponsor, will be heading up “The Transparency Advantage,” or TTA, an industry think tank committed to innovation and forward movement in the automotive market.
The organization and its members will work together to examine the current state of the industry, identify opportunities, commission studies and share research that will work to unite the industry around the next phase in transparency, and ultimately, help dealers buy and sell more cars, CarProof explained.
The $1 million research fund will be sponsored, funded and resourced by CarProof, said the company’s new president and chief executive officer Ed Woiteshek, but the think tank will not be specific to the vehicle history report market and will be heavily guided by its founding and participating members.
Woiteshek took on the position of president and CEO at CarProof last fall after founder and former CEO Paul Antony stepped into the role of chairman.
As the new CEO of CarProof, he was tasked with a strong mandate from the company’s board of directors and founders to “build out a strategic innovation platform” — and the investment in the new industry think tank is part of that platform.
“Transparency throughout the used-car buying and selling process is critical for the future success of our industry. We have come a long way the last 10 years and have the opportunity to take it to the next level,” Woiteshek said.
This new initiative is just one of many new developments from CarProof, as the company also announced at the conference that it will expand into the U.S., with plans to release more details about this development at a later date.
Taking a look at the inspiration for “The Transparency Advantage,” Woiteshek pointed out that most companies and industries only participate in forward thinking and planning two to three years out at best, and it is often very company-specific.
“The mission of TTA is to come up with innovations for the next generation of transparency to make the car buying experience fun again,” Woiteshek said, for the wholesale and retail markets.
He contends the industry needs to be thinking ahead five to 10 years, and with most in the automotive business very busy in their day-to-day jobs, it can be hard to find time to do so without a concerted, collaborative industry effort such as the TTA.
As aforementioned, the company-specific nature of many similar projects don’t often end up benefitting the industry as a whole.
“We want forward thinkers to check their company specific biases at the door and think like the ‘CEO of the Industry’ in a completely unconstrained, free flowing way,” Woiteshek explained.
As for the thinking behind the move, keeping up with the times is key, as well as changing perception of the used-car industry.
“When consumer problems exist, disruption becomes present,” said Woiteshek. “The consumer problem in our industry is that the used car buying process is still not fun for consumers … it is not a bold prediction to say that in 10 years in some form this problem will get solved.”
Developments in technology, such as virtual transactions, are coming our way, and fast, said Woiteshek, and “innovation is no longer a choice. It is a requirement.”
The new think tank, and its 1,000 participating members, will dedicate time and money to gather some of the ideas of top experts in the industry, focusing on how to transform the automotive business to evolve and profit in the future.
“It won’t ask questions like, 'Is full transparency coming? It will assume that is inevitable and ask questions, such as 'How should a dealer operate in a fully transparent world to make money? What are the key steps to building a killer consumer experience?'" Woiteshek explained.
Though CarProof is branching out to many aspects of the remarketing industry, including the valuation and reconditioning markets, the company’s foundation is vehicle history reports, which by nature, work to increase transparency.
“Our mission statement has always been to help create trust and transparency in the automobile industry. We are passionate about this cause and investing to innovate on it,” said Woiteshek.
He also pointed out the company does well when the industry does well, and the think tank will also help give CarProof — and other members of TTA — ideas on where they should allocate product resources over the next five years.
“We believe that as virtual transactions gain traction the next five to 10 years, there will need to be a step function change in transparency. But what that exactly means is to be decides. Let’s define the path together!" Woiteshek concluded.
TRADER Corp. announced recently that it is joining forces with the Canadian International AutoShow in Toronto to host Industry Day on Friday, Feb. 13.
The event, titled as Industry Day, “Secrets of the Auto Intender,” will feature keynote speaker Billy Beane, the general manager of the Oakland A’s. Several key industry leaders will demonstrate the influence of big data with Beane, including Hotspex, Coherent Path and Ocean Media. A ticket to the event includes free access to the AutoShow floor after the event.
The event is designed to provide insight from big data to help those interested in reaching and influencing automotive consumers, helping to reveal consumer behavior patterns to assist dealers in optimizing multi-platform marketing efforts.
The John W. H. Bassett Theater in the Metro Toronto Convention Center will host the event between 9 a.m. and 12 p.m. Interested parties can obtain tickets for the event here. For more information about the event, visit the Industry Day website.
