Canadian Used Car Prices up 12.8% as Chip Shortage Weighs on Auto Industry
The average price Canadians paid for a used car has significantly increased this year, as the ongoing global semiconductor shortage continues to add pressure on the already-constrained auto market.
According to data obtained by CTV News from AutoTrader.ca, the average selling price of a used car in Canada rose from $18,383 to $20,736 in July, marking an increase of 12.8% from year-ago levels. Used pickup trucks, which have surged in popularity since the beginning of the pandemic, were also up significantly in July, rising by 27% since July 2020.
It also appears that the acceleration in used car prices will likely not be abating anytime soon. The global chip shortage has forced major automakers to delay new vehicle manufacturing, which in turn has forced an increased number of consumers to purchase used cars. This in turn, has forced prices of previously-owned vehicles higher.
During the height of the pandemic, an increased number of consumers reverted to working from home, and held off on making large purchases. However, the demand for vehicles soon rebounded, as infection fears forced Canadians away from public and ride-hailing transportation. That, coupled with elevated household savings levels in the second quarter, have spurred robust demand for both new and used vehicles.
“We believe, the fact that there’s a decline in interest in public transportation and ride sharing services, as well as the fact that now Canadians have more savings in their accounts… this all created this pent-up demand,” explained AutoTrader.ca’s director of marketing intelligence Baris Akyurek to CTV News.
Information for this briefing was found via CTV News and AutoTrader.ca. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.