Downward trend continues in used car and truck market

The Canadian used wholesale auto market was down -0.44%, according to Canadian Black Book. The 2017-2019 average was -0.35%. The Canadian wholesale market for used cars declined slightly less than last week, down -0.44%, and trucks were down more from last week at -0.45%. The average listing price for used vehicles decreased slightly week-over-week, as the 14-day moving average declined to $36,500. The overall decreases were slightly more than the historical average (-0.35%).

No segments of the car market made gains, and a few segments were down quite significantly. Full size cars were down the most, at -1.46%, followed by premium sporty cars, down -0.73%, and sporty cars down -0.67%. Economy seems to be playing a role here, as compact cars were only down -0.02%.

For trucks/SUVs, all the segments experienced decreases except one, as compact vans saw a gain of 0.54%. The average decrease was -0.45%. Small pick-ups declined the most, down -0.79%, followed by full size luxury crossover/SUVs, which were down -0.75%, and full-sized pickups were also down -0.75% for the week. Mid-size luxury crossover/SUVs were down -0.66%.

The average listing price for used vehicles was consistent with the last two weeks, as the 14-day moving average declined to $36,500. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots. The US market exchange rate remains favourable for exportation, leading to a continuous stream of vehicles south across the border. “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.”

The Canadian dollar increased slightly, closing at $0.735 this Monday. The Canadian Federal government budget deficit decreased to 1.9 billion in October 2022 from 3.68 billion October 2023. The TSX composite index declined 8.7% over the course of 2022 which was its worst year since 2018.

The strong job market looks to keep up demand for vehicles as we enter a short recession amidst the pandemic and global supply shortages; this should enable overall retained value to stay strong through this period.

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