While inflation is reaching record highs in the country, the price of used cars has just exploded by nearly 25% in the space of a year, confirms an analysis by Statistics Canada.
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“It’s historic. We have to go back to the 1940s, to the post-war period, to see rare and expensive used cars, ”observes the president of the Association for the Protection of Motorists (APA), George Iny.
“Those who have $10,000 to buy a used car will end up with lower quality vehicles. Unlike new, there is no retail price. So the asking price will be more elastic,” he continues.
Last Wednesday, Statistics Canada revealed that the price of used vehicles jumped 24.5% in the space of one year, from March 2021 to March 2022.
In comparison, for the same period, new vehicles jumped 7%.
Impacts of the pandemic
Disruptions to the semiconductor chip supply chain and pandemic-related factory shutdowns continue to impact new vehicle manufacturing, the agency said.
“This change in market dynamics has led to greater price increases for used vehicles than for new vehicles,” says Statistics Canada.
According to Germain Goyer, automotive content producer for the Auto Guide, Quebec cars are also sometimes sent to our neighbors to the south.
American competition
“New vehicles are rare, so people keep their used cars. Traders also find it more profitable to sometimes sell them in the United States,” he says.
“Even vehicles that are over 15 years old sell for a lot of money, like Toyota Yaris or Honda Civic,” he continues.
“I sold a base 2009 Hyundai Accent, glass in hand, with 125,000 kilometers on the odometer, over $4,000 at auction. A year ago, it was worth $2,000 or $2,500,” shares Maxime Ménard, owner of Financez-vous.ca, in Beloeil.
“2008 Ford Escapes that were $2,500 a year ago are selling for over $4,500,” he adds.
For Robert Poëti, CEO of the Corporation of Quebec Automobile Dealers (CCAQ), people who have moved away from the city center during the pandemic again need a car to return to the office.
“There are people who need a second car more,” he says.
“A person who had a new vehicle a year and a half old is offered the same price or a little more. Positive equity, we haven’t seen that often, ”observes the one who does not remember such a market in his life.
hard to justify
At used car dealerships, it is becoming increasingly difficult to explain to customers why prices have soared.
“It’s getting hard to justify the price. Mechanics are more expensive due to the shortage of labour, parts, transportation… so we make more profits with financing,” laments Maxime Ménard of Financez-vous.ca.
Yesterday, Le Journal spoke to several customers who were surprised to be offered so much money for their used car.
One of them, who had paid $4,600 for a car with 110,000 kilometers on the clock, had his “kitty” bought for $1,200 four years later, even though it had a venerable… 178,000 kilometers .
–With the collaboration of Charles Mathieu
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