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Entries in Equity (2)


Used Vehicle Values

We were just reading an informative article, that Canadians lack information when it come to knowing what the value of their vehicle. Its a bit of a wow moment. Since most folks we talk to all mention that CMS (Citizen Main Street) is well informed on to the value of their vehicle.

Just in case you missed some entries in our "Tip of the Day"

What is My Car Worth this was the first entry in our tip of the day series. We provided a concise process to arrive at what your car is worth.

You Have a Trade In we described the trade in process.

Do You Have Equity or Cash or Both as you know with longer finance terms having equity in a vehicle can be challenging.

Is CMS really so far behind the 8 ball. We don't think so. Perhaps its a simple point that if you are not considering, buying, trading, selling a vehicle. Who cares what they are worth, or selling for.

We are all under time constraints and there are surely better things to do than exploring vehicle values that change weekly just for the fun of it.

When you do need information, you scramble to remember where to find it, the URL, the search takes  you somewhere else, and so on.

If you are a regular reader of our publication you are not in the dark, and perhaps you should tell your friends that Strada will keep them informed.

Here is Brian Murphy of Canadian Black Book describing the results of the survey.



Do You Have Equity or Cash or Both?

We constantly hear all sorts of comments from a myriad of experts, pundits, analysts on how to buy a vehicle.

As much as Canada is a country of natural resources, we have lately morphed into a nation of borrowers. Agreed...serious borrowers.

The comments always focus on the programs, incentives, are they stackable. It always looks as if somebody is almost giving away cars for free.

Even with a ton of financial services that are available you still need money/cash/equity to close an advantageous deal when acquiring any vehicle. You know the saying "Money talks and everything else walks".

Let's take a look...


Expects the dealer to be in a position to have money to pay for the trade in.

The dealer expects the buyer to have equity in the trade in.


Expects the buyer to be in a financial position to close a deal.

The customer expects the dealer to provide financial services to close a deal.

We can conclude that it takes cash, equity, financial services in any combination to close any deal.

Imagine a dealer that would say "Come back in a few days, don't have any money today to buy your trade in".

Imagine a customer that would say "Oops did not expect to have that level of negative equity in the trade in".

Good Idea:

To know precisely what your equity or cash position is prior to initiating any transaction. The financial incentives offered by manufacturers do not replace equity or cash. As well the incentives predicate an equity or cash position.

When the equity or cash position is precarious, the deal migrates to "high finance" and suddenly its not such a good deal anymore, or simply not "doable".

Reflect on the following...

There were 1.9 M new vehicle sold in Canada in 2015 of which 57% were financed in round numbers 1 Million vehicles were financed with 70% / 700,000 financed for a term of 72 months or greater.

How much negative equity from the trade in was rolled over?

While the auto business functions best on a 36 month cycle.