It’s been a reoccurring theme for most of 2016; Canadians are buying SUVs and light trucks as fast as auto manufacturers can make them.
In April, DesRosiers Automotive Consultants reported a 9.3 percent increase in sales from last year’s numbers for both segments and that trend has continued throughout the year.
Recent stats posted by the automotive consultants predict 2017 will be much of the same, with consumers favoring SUVs and trucks over cars, the once more popular choice. In fact, compact sport utilities lead Canadian sales, with 270,149 units sold in July, accounting for almost a quarter of all vehicle sales to date this year.
So why are Canadians loving these types of vehicles? Here are five reasons that help explain the trend and why you should consider an SUV or truck for your next vehicle too.
#5 Low Fuel Costs
In February, Edmonton saw some of the cheapest gas prices in Canada, with fuel reaching an all-time low of 56.9 cents a liter. Prices remained relatively low across the rest of the country too, ultimately affecting the countries inflation rate – an ‘unexpectedly’ low 1.1 percent for the year.
So what does all this mean when it comes to buying a new vehicle?
SUV’s and light trucks usually cost more than cars, both in selling price and at the pumps (because they need more fuel to run). Inexpensive gas means consumers are spending less at the pumps, which frees up money for a higher-costing vehicle and at the same time, makes SUVs and light trucks more practical, because they no longer cost as much to fill.
Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, agrees. “If the cost of gas goes down, and it’s been down for some time, it generally frees up more money and consumers shift to a larger vehicle.”
#4 Low-Interest Rates
2016 has seen some great incentives and rebates on the part of manufacturers, in an effort to stimulate the market and encourage people to buy new vehicles. Interest rates, in particular, have been consistently low this year, with many lenders offering 0% financing for buyers interested in new models.
The Bank of Canada reported last Tuesday this trend will likely continue through 2017, with banks and lenders offering some of the lowest interest rates seen in years. That means it doesn’t cost as much to buy that SUV or truck as it did before.
The simple truth? You can do more with an SUV or truck. Families enjoy the space an SUV provides, while others appreciate a truck’s ability to tow the fifth-wheel to the cabin for the weekend. There are other practical factors to consider too, says Tom Libby, manager, loyalty solutions and industry analysis at IHS Automotive.
“These vehicles offer the combination of appealing features associated with both cars and light trucks, including a higher seating position, higher ground clearance, softer ride, more interior space, optional four-wheel or all-wheel drive, and towing capacity, among others.”
It seems SUVs and trucks are better equipped to meet the changing needs of Canadian consumers, particularly families and individuals that need robust and roomy vehicles.
A lease is a financial agreement that gives a person the option of using a vehicle for a certain amount of time for an agreed upon price – unlike a rental vehicle though, the amount you pay goes towards the cost of the vehicle. A lease gives people the option of driving a nicer vehicle for less money a month than if they were to buy the vehicle outright.
“When recession struck in 2008 and 2009, leasing died off, but it is gradually coming back and that has made some of these bigger vehicles more accessible to people,” says Mike Sinuita, product marketing manager for Ford trucks.
Leasing makes higher-priced vehicles a viable option for people who wouldn’t normally consider them.
#1 Innovative Design
The reason SUVs and trucks are the hottest things on the market right now is because they are the hottest things on the market. New models are rammed with the latest technologies and manufactures have creatively designed their interiors to meet the space-centric needs of their customers.
Take for instance the 2017 Ford Escape, which boasts two new engine options and is the first of Ford’s vehicles to showcase their latest Sync technology. The Nissan Rogue, Toyota Rav4, and the Honda CR-V have all also seen huge gains in 2016, rounding out the ‘Best Selling Light Trucks’ category for Edmonton in early 2016.
“Combined with the successful launches of all-new models and the introduction of redesigned existing products, these body styles offer a compelling option for the market,” says Libby of IHS Automotive.