Fuel costs, financing, insurance, and maintenance: all key factors.
Earlier in June, Vincentric announced the winners of its 2023 Best Value in Canada Awards for automotive Original Equipment Manufacturers (OEMs).
With the results tallied, Toyota and Tesla were the two top-scoring brands. The former scored six models and two brand awards in 2023 (and has been a top contender for many years). Tesla finished second with four model and two brand awards, illustrating the growing prominence of electrified vehicles in each category, while Stellantis’ Ram brand rounded out the top three brand winners.
To get an understanding of this year’s awards and trends happening in the automotive space as they relate to the Best Value in Canada when it comes to passenger vehicles, Autosphere interviewed Vincentric’s President David Wurster. Here’s what he had to say:
Autosphere: Starting off, can you tell us a little about how Vincentric is able to determine the Best Value in each category and what goes into that?
David Wurster: There’s a lot of evidence to suggest that vehicles that cost more initially, end up costing owners less over time due to a range of factors. These include depreciation, fuel, financing, insurance, maintenance and repairs—aspects that we study. The importance of the awards is to highlight those vehicles that perform well in each of these categories. The aim is to provide consumers with a target vehicle they want to purchase or see trends that enable them to start looking for a vehicle that fits their needs. As a result, the aim is to experience actual value versus initial price discounts on vehicles.
AS: When we look at things like this, depreciation is often considered a factor too, is that correct?
DW: Traditionally, there has been a lot of focus on depreciation when organizations conduct these kinds of surveys and while it is important, it still only represents around 30-40% of the total cost of ownership (TCO). Therefore, if you only focus on depreciation and purchase price, you’re missing a significant part of the equation.
AS: Tell us a little about some of the scenarios you’ve developed to help determine the best overall value
DW: Our analysis looks at a range of different scenarios, including distance driven, insurance costs, etc. and we take the average from these. From the consumer’s perspective, it’s important to understand the impact of these costs based on their own driving habits—for example, what would be the overall cost based on driving 50,000 km per year? Alternatively, if the vehicle is going to spend most of its time parked, they also need to understand the impact of fixed costs, such as depreciation. With these awards, the aim is to provide consumers with the opportunity to look at the winning vehicles in each category, plug in their own details online and help determine the best vehicle for their own requirements.
AS: When we look at the 2023 winners, Toyota has proven dominant once again. What do you think is key to their continued success over the last 12 years?
DW: Toyota has worked very hard at creating a brand with a deserved reputation for producing quality vehicles. When you look at Toyota’s numbers, its vehicles are the ones that tend to benefit from low depreciation because they are perceived as offering superior quality, reliability and fuel efficiency, driven by Toyota’s experience in internal combustion engines and gasoline/electric hybrid technology.
AS: One trend that is apparent with this year’s awards is the growth in the number of EV entrants, exemplified by Tesla. Can you tell us a little about that?
DW: One thing with EV manufacturers like Tesla, is that currently, they are the beneficiaries of low operating costs—fuel and maintenance—which is their strong suit. Tesla is a unique brand that is both polarizing but also very successful. Currently, Tesla is seen as doing a lot of good things and I think their model category wins are a testament to that.
AS: How do you see the EV market evolving, based on the trends from Vincentric’s own research?
DW: I think it is really a question of wait and see. Nobody can predict the future but when you look at the current trends, there are a lot of new electric vehicles coming to market and a lot of that has been driven by the inroads made by Tesla over the last decade, so right now there is a lot of momentum in that space.
AS: Shifting from consumers to dealers, what do you feel are the benefits of programs like the Best Value Awards?
DW: At the dealer level, there is this tendency (and often pressure) to lower prices to shift vehicles off the lot. Yet there is a real opportunity for dealers to look at the TCO of the vehicles they sell and maintain higher retail prices on those vehicles, particularly if they consistently deliver better overall value than their competitors. In order for this to work effectively, consumers also need to understand that by spending a little more upfront, they get to save over the longer term. A quality vehicle is more efficient and reliable and that’s reflected in the Vincentric Best Value in Canada Awards year after year.