Drop in price for used vehicles in Canada
According to Carpages.ca, used vehicle prices are on the decline across Canada, dropping more than six per cent after peaking during the first half of this year.
The data suggests some types of vehicles are seeing steeper drops than others — sedans the most, minivans the least.
However, according to Tim Dimopolos (CityNews Automotive Specialist) the change is minimum.
“I’ve seen various studies that show a downward trend, but that downward trend is pretty minute,” he said. “The market is still very high comparative to pre-pandemic levels.”
The decline is being attributed to drivers putting off purchases due to large interest rates and the global chips shortage being resolved. The production of new vehicles has increased and people that are interested in a new vehicle are placing orders even if they have to wait for their arrival.
In the other hand, customers in need of a vehicle preferred to go to used car dealers to expedite the process. This is one of the reasons why the change on prices for used car dealers are not that significant.
“Pre-owned sedans have experienced the largest drop in average price point. Between June and July, the average Carpages.ca listing price for a used sedan dipped 6% from the first two quarters of the year, from $30,475 to $28,553,” reads the report from Carpages.ca
“Meanwhile, the average cost of a used pickup truck and SUV both dropped by only about 2% in the same time frame. The average price of a used pickup truck decreased from $42,684 to $42,042, and the average price of a used SUV dipped from $35,159 to $34,303. Minivans, however, declined the least in price at the turn of the third quarter, seeing only a 1% drop in average price ($36,850 from $37,266).”
But these changes are not as impressive as the increase in used cars prices since 2020. The report finds pickup trucks still cost 35 per cent more than they did in the first two quarters of 2020, SUVs cost 43 per cent more, sedans cost 51 per cent more, and those family-toting minivans cost a whopping 93 per cent more.
“And the most expensive category, from the research is older stock. Cars five years and older have seen the greatest appreciation through the pandemic. So that $5,000 or $8,000 car, you’ve seen very sharp increases in prices there. They are very expensive and they are hard to find.” Dimopolos commented
Lloyd, M. (n.d.). Canadian used car prices beginning to drop: report. CityNews. Retrieved October 14, 2022, from https://vancouver.citynews.ca/2022/09/15/used-car-prices-dropping-report/