This week wholesale used vehicles were down again in terms of weekly price trends, with the market average at -0.22% compared to -0.24% last week, and -0.21% as the 24-month average, according to Canadian Black Book.
The car segment was marked at -0.26% this week, compared to -0.29% last week. Only the premium sports car and prestige luxury car segments managed a small increase for the week, of 0.05%. The largest declines during that period were seen in the near-luxury car segment, at -0.63%. Sub-compact cars were down -0.57% and compact cars declined by 0.50%.
Trucks too were down, by 0.17% this week, versus -0.19% last week. Sub-compact luxury crossovers revealed the largest increase for the week among trucks with 0.35%. Small pickups also increased, by 0.08%, and full-size crossover/SUVs increased by 0.02%. On the down side, compact luxury crossover/SUVs fell -0.46%, and compact crossover/SUVs were down -0.44%. The third largest decline was seen in the full-size luxury crossover/SUV segment, which was down in value by -0.25%.
“Declines in prices for the week were slightly steeper than seasonal norms for cars, and closer to historical averages for the truck segment,” said CBB in its Auto Market Update for Feb. 2, 2021. “This marks sixteen weeks of decreases for both segment groups.”
Auto retailers are entering a period where they would typically begin stocking up on product for the spring, but CBB said it remains to be seen what impact pandemic-related uncertainty and a slow rollout of vaccines will have on the marketplace — and the mindset of consumers who are usually keen on buying during the spring season.
As for the monthly retention index, CBB said January set another new all-time record for its Vehicle Retention Index by reaching a mark of 112.5 for the month.
“This new record is up 0.9% from December 2020 and up 3.9% from January of last year,” said CBB. “Although prices in the market have been trending downwards, in absolute dollars, when adjusted for seasonality this index clearly shows that prices in Canada for used vehicles, in terms of the amount they are retaining of their when-new price, are at an all-time high.”
CBB said the continued short supply of used vehicles helped pave the way for prices to reach new highs in Canada. Demand remains much higher than supply. At the same time, there is an expectation that new vehicle sales will be slow in January and February, thereby reducing the number of units entering the market as trade-ins. The expectation is that tight used vehicle inventory levels will remain a key factor for most of the year.
As for wholesale, CBB said average sales rates from last week in auction lanes were down by about 40% (compared to the normal 70% range in pre-crisis periods), and noted lanes with a low of a 15% sales rate and lanes with high rates in the low 80% range.
“With the spring selling season approaching, it is expected that sales rates will pick up,” said CBB, adding that last week its team noted instances of buyers and sellers “being within only a few dollars of a deal and the sellers refusing to move on price.”
Perhaps sellers are realizing in many cases that, if they have the stock, it is a seller’s market and therefore they have more control.
Read the full report here.
