The Canadian vehicle market has taken on an identity of its own over the last 15 years. Unlike their American counterparts, Canadians typically took the avenue of finding a new vehicle as appose to buying previously owned. This was by far most apparent in the automotive sector where 3 out of every 4 cars sold were considered “New.” However, today brings uncertain times with a declining and uncertain economy every industry has felt the effects.
The Canadian Automotive sector is seeing quite the transformation in that the popular leases of the past are being phased out by franchised dealers in favour of financing. GMAC Club and Chrysler Financial have discontinued leases throughout North America. Ford Motor Credit hasn’t exactly taken the same approach; they have instead increased their lease rates to the point that no one could even afford them. We must ask ourselves why? For starters, dealerships have seen too many lease terminations due to missed payments and in turn have now become stuck with an abundance of unexpected off lease vehicles in their inventory. Even more pressing is the difficulty that dealerships are having in trying to sell any cars in these scarce economic times. Furthermore, from a funding standpoint, money isn’t as readily available due to the deteriorating credit of the finance arms and their parent automakers. This has made for a very difficult situation in the automotive sector and has instantly transformed the Canadian automotive market. In the U.S.A. one out of every four cars sold is used, Canadians should begin to anticipate similar sales ratios.
