Canadians who deal with the high cost of used cars should not expect the value bubble to burst. According to the Canadian Black Book, high prices will be around 2026.
James Hancock, the organization’s director of OEM strategy and analytics, spoke Car news in Canada The new inventory crisis, caused by recent and semiconductor shortages, is expected to last until mid-2023 at the earliest. And it works.
While there are few cars sold so far, there will be few used cars that will be on the market in 2024, 2025 and 2026, returned or leased for sale. Therefore, dealers should continue to buy these cars at a higher price.
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“To be honest, I’ve never seen anything like it,” Hancock said. “I’ve been in the car world for 15 years and it’s a great time.”
Fortunately, despite the fact that the price of used cars in Canada has risen by 4.1% this year, the data show that the peak of prices actually occurred in 2021 and has fallen on average since then. This, Hancock said, shows that this is not a bubble ready to explode. Instead, prices should fall slowly over the next four years.
The high cost of used cars means, among other factors, that Canadian dealers will have to adapt their strategies. Brick dealers are in an unfavorable position in this market as car owners are looking for the best prices to trade to buy a better car.
“Consumers are smart, well-informed, well-informed and they try to maximize the value of this car and their share of the car,” Hancock said. “So they buy their cars from other dealers to find out if someone is willing to pay more.”
This has only benefited online dealers and could change the way cars are bought over the years.