Some used vehicles would sell for more than new ones
Used vehicles that are three years old or less sell for the same price as their new equivalent.
Many used vehicles sell for the same price as their new equivalent. Some might even cost more. (File photo)
Faced with a new vehicle market still marked by long delivery delays, some Canadians may decide to turn to used cars, but may be forced to open their wallets even more.
A situation that the director of the Superb Auto used car dealership in North York, Yasin Guzeltas, is seeing closely.
“ I always see a lot of used vehicles on the market that are more expensive than new models. »
— Yasin Guzeltas, manager of used-car dealership Superb Auto
Said supply issues are forcing dealers to engage in bidding wars at ever-changing prices higher, as many of them focus their efforts on certain popular models.
For example, if the car is on the market for $25,000, you may end up buying it for $26, 27,000, Mr. Guzeltas laments.
Then we have to pay the costs of the auction, the costs of refurbishing and cleaning the car. Afterwards, we have to change the tires and the brakes, which increases the bill.
According to Yasin Guzeltas, hybrid vehicles as well as sport utility vehicles are the used vehicles most often selling for more than their new equivalent.
The result: car dealerships used vehicles like his have to sell this vehicle for more with a margin to pay our bills and make some money in order to survive in this market.
Some tell us that these prices are strange and don't want to pay above the manufacturer's suggested retail price (MSRP), admits Mr. Guzeltas. Others understand our situation.Enlarge image
These comparisons were made on March 10, 2023 using data from different websites with the Radio-Canada office in Toronto as the anchor point. For AutoTrader.ca, the data compiled includes vehicle listings within a 50 kilometer radius of the office.
In addition, demand is such that many used vehicles retain now their value, even after a few years of use, notes the columnist and editor of the Annuel de l'automobile, Benoit Charette.
“What's happening right now is that a three-year-old used vehicle, in general, is worth the same price as a new vehicle. »
— Benoit Charette, columnist and editor of the Annuel de l'automobile
The industry expert says that the vehicle market is d Opportunity relies heavily on new vehicles for fuel. Thus, the supply problems plaguing the industry, such as the shortage of microchips, have a direct impact on the second-hand market.
Over the past year, Benoit Charette noted that the major car rental institutions […], have fed into the pool of used vehicles for lack of new vehicles, further reducing his number of cars at the available to consumers.
Thus, people wishing to obtain a car at a slightly more reasonable price must, according to him, sometimes look for a used vehicle that is four or five years old. years.
As inventories slowly rise, high prices for used vehicles will not return to pre-pandemic levels, believes AutoTrader.ca vice president of analysis and intelligence, Baris Akyurek. /p>
“ We see that consumers are adapting to these new standards.
— Baris Akyurek, VP Analytics and Intelligence of AutoTrader.ca
The expert believes that Canadians seem to be adapting by extending the average length of their lease and finance contracts.
This reality explains, according to him, the increase in more than 10% in the number of transactions on the used car sales site in the first months of 2023 compared to the same time last year, despite interest rates and high prices.
Mr. Akyurek reports that the average price of a used vehicle listed on AutoTrader.ca in February 2023 is $39,268, which represents an increase of 6.3% compared to the price in February 2022.
Mr. Akyurek adds, however, that before the pandemic, prices were usually higher at the start of the year before slowly falling month after month. This was not the case in 2021 and 2022 when the market was going through an abnormal period.
So far this year, the data indicates that the situation seems to be normalizing if we rely on the price change from month to month so far.
That said, the average price of a new vehicle in February 2020 was just under $27,000, Mr. Akyurek says. So prices are higher right now and not expected to return to pre-pandemic prices anytime soon.