AutoTrader’s August sales figures are in, and while the new vehicle market prices are still on the increase, due to continued low supply and high demand, it appears that used vehicles supply is finally increasing, leading to a slight drop in prices that is predicted to continue into 2023, says the new report.
Canadian auto dealer spoke with Baris Akyurek, Director of Marketing Intelligence at TRADER, who says the market indicators are generally positive for dealers.
“New car prices are up by 18.3% in August, a 1.1% month over month increase,” he said. “So the average price of a new car in Canada in August was just over $56,000. On the used side of things, our July report saw the first decline in 17 months. The August data shows prices saw another 0.4% decline. We believe that the used prices have peaked in June.”
These numbers are based on the sales on Autotrader.com, so don’t include pre-ordered vehicles, but he said the demand for new vehicles is still high, and supply seems to be improving. “The consensus in the new market for 2022 is that there’s going to be some improvement in inventory availability for the second half of the year.”
The used car market is undergoing a shift away from the very constrained supply, slowly improving throughout the first half of the year and now levelling off. “Used car availability has been going up,” he said. “Inventory has been going up pretty much since around February and it went up consistently. And in the last couple of months, it’s kind of plateaued. So on a year over year basis, when we look at our marketplace, there are more cars available compared to last year.
Consumer trends are evolving along with the market as new cars become available. “The last research we did found that 36 per cent of consumers are willing to switch from new to used, but even with those buyers moving to the used side of things there’s quite a few new consumers. They are still waiting for the availability. So we believe the demand on the new car side has been pretty strong, and it’s gonna stay strong for quite a while, until the production levels come back to somewhat normal levels.”
The surge in supply of used cars, leading to lower prices has been seen across Canada, with the exception of BC. “But when we looked at the prices by province we don’t see these declines in BC yet. Looking at our marketplace data, the demand seems to be still pretty strong in BC. Therefore we haven’t seen the the decline in prices just yet.”
dealer, C. auto, Moskowitz, B., McAlister, Z., Ockedahl, C., & dealer, C. auto. (2022, September 21). Used vehicle prices peaked in June, new cars still hot: Autotrader interview. Canadian Auto Dealer. Retrieved September 26, 2022, from https://canadianautodealer.ca/2022/09/used-vehicle-prices-peaked-in-june-new-cars-still-hot-autotrader-interview/