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More Canadian car buyers would rather forgo the bells and whistles of a new car for something cheaper than struggle with affordability.
Eighty percent believe automakers should prioritize making their products more affordable rather than adding new features to their cars, according to a recent survey by CarGurus Inc.
Asked which changes would improve their car ownership experience the most, 43 percent said better fuel economy, 40 percent chose affordability and 39 percent said more durable vehicles.
Canadians are dealing with affordability issues everywhere.
Gas prices were up 22.6 percent year over year in August, according to Statistics Canada, and car prices remain high despite a slight decline in recent months. Vehicle service and repair costs were up 3.7 per in August.
The average new and used car was priced at $63,000 and $36,690 in the second quarter, respectively, according to the Autotrader Price Index. Both prices were down more than two percent year over year.
But there could be some affordability relief on the horizon. In January, Canada announced a deal with China to allow 49,000 electric vehicles into the country at a low tariff rate, provided that more than half of the imported vehicles are priced at less than $35,000.
“Automakers have moved away from many budget-focused models in favor of larger, more premium vehicles over the past decade,” said David Undercoffler, head of consumer insights at CarGurus, in a press release. “That leaves an opening for more affordable, value-oriented options. Chinese automakers bringing EVs to Canada could compete for these shoppers if they deliver on price, reliability and safety.”
There may also be a market for Chinese cars – such as Chery Automobile Co Ltd and BYD Co Ltd – in Canada. Almost 60 percent of respondents said they would be comfortable buying one of these vehicles, with openness highest among young Canadians and Quebecers.
“Our survey suggests that unknown brands can still appeal to a broad group of Canadians if they offer strong value for money, especially in the current climate,” Undercoffler said.
Challenges with new tech
Besides the price associated with new car technology, most Canadians are generally not in favor of the new advancements. More than half believe touchscreens are too distracting, want to stop AI driving progress and don’t want to pay for a subscription to get more advanced features.
Automakers like Tesla Inc. and Polestar Automotive Holdings UK PLC have popularized large touchscreens, but it appears some other automakers are hearing drivers’ concerns and pushing back on the technology.
Recent models from Mercedes-Benz Group AG, Hyundai Motor Co., Subaru Corp.
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McDonald’s is in the midst of an ambitious plan to overhaul stores as it looks to turn the tide on sliding sales.
The only problem: franchisees stick to the hefty price tag of the renovations.
The fast food chain said the renovation, which is intended to improve food quality and efficiency, will cost about US$800,000 per store in the US, on top of a US$400,000 remodel franchisees are already on the hook for.
McDonald’s recently began a program offering US$8.5 billion to offset costs and said the renovation would save US$100,000 in cash flow annually.
Shares have fallen 23 percent since February, with the stock on pace for its worst performance since 2002.
Read more here.
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Canadians spend considerable time preparing financially for retirement. They save, invest and build plans designed to support their lifestyle without outliving their money.
Much less attention is given to another question that is just as important for retirement: Where will you live?
Wealth advisor Evan Riddell explains why your home is part of your retirement plan. Find out more
Interest and energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors. Register here.
McLister on mortgages
Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you don’t want to miss. Plus check its mortgage rate page for Canada’s lowest national mortgage rates, updated daily.
Finance post on YouTube
Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts on business, economics, housing, the energy sector and more.
Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff and Bloomberg.
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