Four weeks in a row of considerable declines in used car prices

The wholesale market as a whole continues to moderately decline, down -0.37%, more than the 2017-2019 average, which was -0.24%, according to Canadian Black Book. The Canadian wholesale market for used cars Cars was down -0.35% and trucks were down -0.39%. The overall volume-weighted used car segment continues the downward trend down overall by -0.37% compared to being down -0.29% last week. Cars were less than the 2017-2019 average (-0.26%). The truck/SUV market was down more at -0.37% for the week, compared to the previous -0.22%.

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, leading cars to outperform trucks and SUVs, 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.”

Only three segments of the car market made modest gains, with compact cars up 0.23%, and sub-compact cars up 0.08%. Luxury cars and full-size cars were both down substantially, with luxury cars down the most, at -1.16%, and full-sized cars down -0.99%.

For trucks/SUVs, there were zero segments with price increases, Compact vans declined the most, down a full -1.62%, followed by full-size luxury crossovers which were down -0.77% for the week.

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

Canada’s annual inflation rate was at 7.6% in July of 2022, easing from the 39-year high of 8.1% hit in the prior month and in line with market estimates. Transportation costs grew at a much slower pace (14.4% vs 16.8% in June), amid a sharp retreat in gasoline (35.6% vs 54.6%). The Canadian dollar has been trading in a range of 0.77 to 0.78 against the greenback, as fresh consumer price data backed investors’ bets that the Bank of Canada should continue to raise lending rates at an aggressive pace. U.S. Market

DesRosiers Automotive Consultants reported that Canadian light vehicle production was up approximately 15.4% in the first half of 2022 compared to the previous year, as Toyota continued to lead the Canadian industry in production despite a decline in production related to semiconductor shortages. Significant increases in overall production were recorded for GM, Stellantis, and Ford.

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