Wholesale used vehicles prices were stronger this week, with the car segment up by a record 0.35%, and trucks by 0.49% — their third largest gain in the last two years, according to Canadian Black Book’s COVID-19 Market Update for September 2, 2020.
“Last week, our team again saw upward progress in wholesale market prices for both cars and trucks,” said CBB in its report. “This marks the tenth week in a row for the wholesale market recovery phase. This follows the initial downturn in the early part of 2020, created by the COVID-19 outbreak.”
The Sub-compact car segment managed the largest gain over the past week, of 1.13% ($85) in wholesale value, followed by full-size cars at 0.84% ($128) and mid-size cars at 0.75% ($86). Premium sports cars were up by 0.54% ($311) last week and are not showing any signs of diminishing in value yet, according to CBB.
The one car segment that showed a slump in values last week was the Prestige luxury car segment, which declined 0.23% (-$104). The segment has only seen a positive result in one of the past eight weeks.
In the truck segment, the sub-compact crossover category was up 1.44% ($185), followed by compact crossover/SUVs with a 1.43% boost ($190) and minivans at 0.88% ($133).
However, two segments were down: compact vans at -0.52% (-$73), followed by full-size vans at -0.02% (-$4), and full-size pickups appeared flat (or -$1).
Separately, Canadian auctions continue to operate digitally-only with sales of approximately 80% of normal volume levels.
A top concern among CBB is that used vehicle supply levels are tight as many consumers shift their focus to pre-owned over new. The average days to turn for used car inventory ended the week at 47 days; this is considered much lower than typical levels.
For dealers exporting vehicles to the U.S., the new NAFTA agreement brings with it some changes and tariffs to certain vehicles exported. It should also be noted that the Canadian dollar gained $0.006 last week. Continued gains over the long term will make Canadian used vehicles more expensive to acquire for export to the U.S., said CBB.
“With the Canadian dollar regaining all the value it has lost since early March, compounded with another positive week last week, Canadian exported vehicles continue to become more expensive,” said CBB. “However, at the present time, the export flow of vehicles shows no signs of slowing.”
Other updates to keep in mind include the U.S. 10% tax on aluminum from Canada, which took effect on August 16. Canada will retaliate with $3.6 billion in countermeasures this month after its consultation phase is complete.
“There is some expectation that this trade dispute could put downward pressure on the Canadian dollar,” said CBB. “This will help the export of used vehicles from Canada as it would effectively make them cheaper for those buying using U.S. dollars.”
