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Negative equity woes? Sparkling car sales sweeteners ease the pain

Here's a sign that the frothy deals being offered on new vehicles are not just tempting for Canadians, but stunningly attractive and almost irresistible: nearly one of every three Canadian trade-in vehicles is worth less than the amount owed on the outstanding loan.

That's called negative equity. Data from the Power Information Network (PIN) suggests that this is not a blip, but a trend. About a third of Canadian buyers have been in a negative equity space every month for more than the last year.

Yet new vehicle sales in Canada are firing along at a torrid pace and have been for two years. One reason: deals. Incentive money, cut-rate financing, loyalty awards, credit card promotions, golf club promotions… The offers have been flying at new car consumers from every direction.

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One of the newest and richest of them is the $8,500 Volvo Canada has slapped on the $50,800 XC90 sport-utility vehicle. Add in a negotiated dealer discount and perhaps a loyalty incentive for current Volvo owners and – wham – the final offer is as much as 20 per cent or more off the sticker price. That's tempting, even if you're a Volvo owner whose current ride is in a negative place.

Another phenomenon driving sales is the willingness of manufacturers to offer discounts on even their newest models. Take the Infiniti Q50. This is a lovely car and it's only just arrived in dealerships. Yet Infiniti is offering a $1,500 "loyalty" bonus to existing Infiniti owners and it can be combined with 2.9 per cent financing.

Honda? Honda has long hated to throw money at the marketplace – which explains Honda's excellent resale values – but the competition is fierce, so what choice is there? The CR-V, which competes head-to-head against the Ford Escape and Toyota RAV4, is wearing $2,000 in factory discounts, $500 of which can be combined with 1.99 per cent financing.

Finally, Mercedes-Benz. The C-Class is a bread-and-butter model, but it's year-end time and Mercedes wants to nail down the title of No. 1 premium brand in Canada. So with an all-new C-Class due in the new year, Merc has more than $2,000 in incentives on the table, all of which can be stacked with 0.90 per cent financing.

In all these case, the cash in the game is often enough to offset negative equity woes. So the owner who trades in an older ride for a new one is no worse off for the deal from a payment perspective – and drives away in something shiny and new.

Deals of the Week consulted with,, and other sources on these offers. As usual, pricing information is subject to change and dealer discounts vary, so consult your dealer for the final details, including expiry dates for all offers.

2014 Volvo XC90 AWD 5dr 3.2

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  • MSRP: $50,800
  • Freight, dealer prep, air conditioning tax: $1,795
  • Dealer discount (estimated): $1,800
  • Factory discount: $8,500 (Volvo Alternative Cash factory-to-dealer rebate for cash purchases)
  • Taxable subtotal: $42,295
  • Total price with 13 per cent HST: $47,793.35
  • Factory rebate: $1,000 (Volvo Loyalty Offer factory-to-consumer rebate)
  • Final price: $46,793.35
  • 1.9 per cent financing available for 60 months, but with no Alternative Cash rebate

Infiniti Q50 Nissan Nissan  

2014 Infiniti Q50 four-door sedan AWD Premium

  • MSRP: $43,400
  • Freight, dealer prep and air conditioning tax: $2,095
  • Dealer discount (estimated): $1,850
  • Factory discount: $1,500 (Infiniti Owner Loyalty Program factory-to-consumer rebate or 2 per cent rate reduction)
  • Taxable subtotal: $42,145
  • Total price with 13 per cent HST: $47,623.85
  • 2.9 per cent financing available with factory incentive

2014 Honda CR-V Honda Honda  

2014 Honda CR-V AWD five-door LX

  • MSRP: $28,290
  • Freight, dealer prep, AC tax: $1,795
  • Dealer discount (estimated): $1,000
  • Factory discount: $1,500 (Honda Non-stackable Trading Dollars factory-to-dealer rebate)
  • Taxable subtotal: $27,585
  • Total price with 13 per cent HST: $31,171.05
  • Factory discount: $500 (Honda Consumer Incentive Dollars factory-to-customer rebate)
  • Final price: $30,671.05
  • 1.99 per cent financing available with after-tax consumer incentive

Mercedes-Benz C-Class C350 Mercedes-Benz Mercedes-Benz  

2014 Mercedes-Benz C-Class four-door sedan C350 4MATIC

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  • MSRP: $47,900
  • Freight, PDI, AC tax: $2,095
  • Dealer discount (estimated): $2,100
  • Factory discount: $1,000 (Mercedes-Benz Direct Cash Support factory-to-dealer rebate)
  • Taxable subtotal: $46,895
  • Total price with 13 per cent HST: $52,991.35
  • Factory discount: $1,333 (Mercedes-Benz Year End Sale Credit factory-to-consumer rebate)
  • Final price: $51,658.35
  • Cash incentives can be combined with 0.9 per cent financing for 60 months

Pricing information source: and 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. Where noted, "dealer discounts" are negotiated with the customer on a case-by-case basis. Unhaggle Savings are actual discounts received by Unhaggle customers.

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More


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