Fuel-efficiency key for used car market, still on the decline

The wholesale market as a whole was slightly below the same level as the 2017-2019 average at -0.22%, according to Canadian Black Book. The Canadian wholesale market for used cars was down -0.15%, outperforming trucks and SUVs for the 12th straight week.

The overall volume-weighted used car segment continues bumbling along, down overall by -0.15% compared to being up 0.05% last week. Cars were a bit down from the 2017-2019 average (-0.10%). The truck/SUV continued on a downhill path of -0.29% for the week, compared to the previous -0.28%.

“Overall, the Canadian used wholesale market saw prices slightly decline, for the 11th straight week, the Car segment outperformed the SUV/Truck segment, as rising interest rates and high gas prices have consumers looking for smaller, more fuel-efficient vehicles,”  says the CBB report. “Supply remains low while demand continues to soften on both sides of the border. Upstream channels continue to tap supply before it can be made available at physical auctions.”

Four of the nine car segments increased last week, with the majority of gains made by luxury cars, and full size cars, both up 0.26%. Prestige luxury cars were up by 0.11% and Premium sporty cars were up marginally by 0.02%. All the rest were down, the lowest drops being near luxury cars at -0.75%, and mid size cars, which were down -0.50%.

For trucks/SUVs, there were only three slight price increases, with sub-compact crossovers and sub-compact luxury crossovers continuing positive growth from last week at 0.04% and 0.03%, and full size pickups gaining 0.03%. Every other segment was down once again, led by compact vans (-0.51%), full-size luxury crossover/SUVs (-0.49%), and mid size luxury crossover/SUVs (-0.48%).

The average listing price for used vehicles rose slightly week over week, as the 14-day moving average slightly above $37,000. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

In other news, job vacancies climbed to 957,000 in the first quarter, as employers continued to face an increasingly tight Labour market. Consumer confidence continues a decidedly negative trajectory. Overall confidence is neutral, however, the forward-looking expectation is weakening significantly driven down by a material drop in real estate confidence, says Bloomberg/Nanos. The Canadian dollar remained steady against the USD, finishing the week at $0.77.

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