Used car market continues dilly-dallying downhill

The wholesale market as a whole continues to slump, down -0.23%, well below the same level as the 2017-2019 average, which was -0.10%, according to Canadian Black Book. The Canadian wholesale market for used cars was down -0.25%, and trucks outperformed cars for the first time since the middle of March, with a decline of only -0.20%.

The overall volume-weighted used car segment continues bumbling along, down overall by -0.25% compared to being down -0.20% last week. Cars were quite a bit down from the 2017-2019 average (-0.12%). The truck/SUV market improved, but continued on a downhill path of -0.20% for the week, compared to the previous -0.24%.

The US market exchange rate remains favourable for exportation, leading to a continuous stream of vehicles south across the border. Gas prices are still an influence on buyer behaviour, though trucks are finally outperforming cars, says the report. “Supply remains low while demand is high on both sides of the border. Upstream channels continue to tap supply before it can be made available at physical auctions.”

More than half of the used car segments dropped from last week, with the majority of gains made by mid sized cars, which were up 0.44%. Near luxury cars and luxury cars were down the most, at -0.77%, and -0.57% respectively.

For trucks/SUVs, there were only two slight price increases, with minivans up 0.28% and full-sized pickups up 0.18%. Compact vans declined the most, down a full -1.00%, followed by sub-compact luxury crossovers which were down -0.99% for the week.

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

Canada’s economy contracted 0.2% in May due, in large part, to a slowdown in oil production. Preliminary data from Statistics Canada showed that the country’s gross domestic product (GDP) fell into negative territory in May as output slowed in the oil and gas, construction, and manufacturing sectors. May’s result followed GDP gains of 0.3% in April and 0.7% in March.

The yield on the Canadian 10-year government bond fell to under 3.2% in early July, the lowest in four weeks, as concerns of an economic slowdown lifted demand for safer assets such as government debt. The Canadian dollar remained steady against the USD, finishing the week at $0.77.

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