New vehicle prices are down. Thank you, Statistics Canada, for that nugget.
Statscan reports that in 2011, the average transaction price of a passenger car decreased by 0.3 per cent to $26,637.
True, in 2011 the average transaction price of a vehicle in Canada increased by 1.2 per cent to $33,399. But as auto analyst Dennis DesRosiers notes, the overall figure includes medium and heavy-duty truck sales, and those values skewed the total transaction value figure upwards.
Passenger car prices alone were down in dollar terms.
There's more. As the president of DesRosiers Automotive Consultants points out, "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. Today's new vehicles represent a much better value-for-money compromise than a decade ago."
The bottom line: vehicles are more affordable now than just a few years ago.
"The average price of a vehicle increased by 7.4 per cent per year during the 1980s, and then a further 5.0 per cent per year during the 1990s. Since the year 2000, average vehicle prices have increased only 1.1 per cent per year – less than the consumer price index for all goods in Canada. Passenger car prices are even leaner," notes DesRosiers.
Why are new car prices down? Because it's a competitive market out there. Car companies have squeezed costs out of every aspect of the business, and let's not forget the benefits of a strong Canadian dollar – "especially since we import most vehicles bought in this country from either the U.S., Mexico or overseas." These factors give car companies and their dealers a great deal of pricing and incentive flexibility.
Take Kia, the South Korean auto maker. Kia has been aggressively chasing buyers with deals and overall low prices, and as a result they have had 39 straight months of increased sales in Canada. Some of Kia's models are built in the U.S., a NAFTA zone, and that helps with pricing – at least from a consumer's perspective, in that those vehicles are not subject to a 6.5 per cent import duty. Kia is also a pretty lean operation and the company has been benefitting from a currency advantage, too.
Case in point: the 2012 Forte. Kia Canada has in play perhaps as much as $3,600 in sales sweeteners on a sub-$20,000 Forte five-door. To grab all the money on the table, you'll need to string together a number of incentive offers: Kia's Conquest Program (applies to owners or lessees of a Toyota Corolla, Honda Civic or Mazda3); the Military Program for members of the Canadian Forces; Kia's Prime Rate Credit for those who use certain financing programs, and Kia's Don't Pay Until Spring – 90 Days Payment Deferral Program, which works exactly as advertised.
New vehicle prices are under control, but you'll still need to do your homework. Deals of the Week did so in four instances, obtaining price and incentive information from www.carcostcanada.com, among other sources. Here are the numbers.
2012 Kia Forte EX 5-door
- MSRP: $19,195
- Freight, dealer prep, air conditioning tax: $1,555
- Dealer discount (estimated): $600
- Factory discount: $2,000 (Prime Rate Credit factory-to-dealer rebate/Trading Dollars factory-to-dealer rebate)
- Factory discount: $500 (Forte Conquest Program factory-to-dealer rebate)
- Factory discount: $500 (Military Program factory-to-customer rebate)
- Taxable subtotal: $17,150
- Total price with 13% HST: $19,379.50
- Loan rates as low as 0.0% for up to 60 months
2012 Infiniti G25
- MSRP: $36,390
- Freight, dealer prep and air conditioning tax and Green Levy: $2,050
- Dealer discount (estimated): $1,200
- Factory discount: $3,500 (Lease Cash Support factory-to-dealer rebate)
- Factory discount: $1,500 (Stackable Bonus Cash factory-to-dealer rebate)
- Taxable subtotal: $32,240
- Total price with 13% HST: $36,431.20
- Combined with 2.9% lease rate for 36 or 48 months
2012 Ford Edge Limited FWD
- MSRP: $37,399
- Freight, dealer prep, AC tax: $1,600
- Dealer discount (estimated): $1,300
- Factory discount: $5,500 (Delivery Allowance factory-to-dealer rebate)
- Taxable subtotal: $32,199
- Total price with 13% HST: $36,384.87
- Factory discount: $1,000 (Costco Rebate factory-to-customer rebate)
- Final price: $35,384.87
2012 Lexus ES 350
- MSRP: $44,200
- Freight, dealer prep, AC tax: $2,050
- Dealer discount (estimated): $1,800
- Taxable subtotal: $44,450
- Total price with 13% HST: $50,228.50
- Factory discount: $4,000 (Non-stackable Trading Dollars factory-to-dealer rebate)
- Final price: $46,228.50
Pricing information source: 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.