Wholesale price increases begin to slow, truck and car values up

In Canadian Black Book’s September 9 COVID-19 update, the company reveals wholesale prices are still rising, though less quickly, the Truck and Car segments increased mildly in value compared to previous weeks, and the Canadian dollar was up $0.003 last week — part of a strengthening trend that started in July.

With 2.5 million Canadians working from home, as of August and based on Statistics Canada, the lack of vehicle usage for commuting to and from work is keeping “billions of kilometres off of the Canadian vehicle fleet,” and has the effect of improving the quality of used vehicles population, according to CBB.

Wholesale used vehicle prices were up for Cars, by 0.14%, and Trucks by 0.10%. “This continues a seven-week positive trend for the Truck segments and a four week run of positive value increases for Cars,” said CBB.

In the United States, Cars were down by 0.22% following fifteen weeks of increases and Trucks were up 0.18%. CBB said the slowing of value gains could be the beginning of an expected value decline for the latter part of the year.

On used vehicle supply (an issue which has plagued more than just the Canadian market), CBB said levels remain tight as demand for these vehicles remain strong. The average days to turn for used car inventory is 52 days, lower than typical levels for the Canadian auto industry.

Finally, it is worth noting that the Canadian dollar gained $0.003 last week. Over the long term, CBB anticipates that continued gains will make Canadian used vehicles more expensive to acquire for export to the United States.

“A weaker Canadian dollar typically helps to keep values strong,” said CBB. “Conversely, a stronger dollar makes exported Canadian used cars more expensive to buyers in the critical U.S. market.”

To review the full report, click here.

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