We made $8 cauliflower jokes a few years ago. When the price of 2x4s tripled and a liter of gasoline exceeded two dollars, cartoonists made us laugh out loud. Now we can expect jokes about rusty old cars finding buyers at indecent prices.
The average price of a used car is now $35,135 in Quebec. What’s even more disturbing is that it’s a spectacular jump of $11,000, or 43%, in one year. Just one year. This is the highest increase in the country. We are very far from salary increases…
This is unheard of in the province. Both for the price reached and for the variation in 12 months.
This new data comes from the online platform AutoHebdo, which compiled the classified ads published in April. The $35,135 is the average asking price from retailers and distributors. The selling price is probably a bit lower.
In Canada, the average published price is even higher (see chart). The progression helps to constantly reduce the price difference between new and used. From $20,000 two years ago, it has risen to $15,500.
Unlike cauliflower, which quickly returned to an acceptable price to make soup, used cars have been experiencing an acceleration in their prices for months. “We are at 30% or more increase since December”, specifies the director of the AutoHebdo brand, Benoît Béland.
The shortage of new vehicles, in turn, caused by the shortage of semiconductors, is at the heart of the problem. Many motorists cannot afford to wait months for their new purchase, or even more than a year in the case of electric cars. Not to mention that new cars cost more and become unaffordable for some people.
All these beautiful people, therefore, fall back into the second-hand market, which is in such a frenzy that even its employees find it hard to believe. I met two of them, Monday afternoon, in front of packed courts. It was to wonder if the shortage of vehicles is real.
“Since January, I no longer sell cars. It is the world that buys it! There is a great shortage. It is not an illusion! The car I sold for $2,500 last year has come back for $4,500,” Georges Moquin of Auto Liquidation MB 2.0 in LeMoyne, a Longueuil area, told me.
While eating his spaghetti, the vendor told me that 2021 had been a record year. But that this record will be “easily beaten this year.” In April he sold 47 vehicles, which he considers “very good for a small workshop” like the one that employs him.
His best advice for seekers: “If you see a car you like, deposit it or buy it. Because the next day, she won’t be there. she goes fast »Don’t be too picky about color and keep in mind that very low-priced models fly screaming auto.
“Cars for $5,000 or less, when I have one I post it online and it sells in a day. It is highly sought after,” says Georges Moquin.
A few kilometers away, the narrow yard of the financing specialists company has the capacity for a few vehicles. But meeting it is a challenge, says CFO Ilyass Bentalba. The company used to source supplies from short-term lessors (Budget, Avis, etc.), but they no longer sell their inventory at auction.
The retailer had no choice but to adapt. He now buys leases from individuals (residual value payment to the dealer) and trades a lot.
Customers are beginning to discover that “the prices are exaggerated, that it is too expensive,” says Ilyass Bentalba. But those who sell their vehicle get amounts they never thought possible. The increase goes both ways!
In addition, all kinds of situations arise that were unthinkable before the pandemic.
One of his clients who bought a 2018 Nissan Rogue for $19,000 got into an accident after a while. The car was declared a total loss and insurance paid him $24,000. Another customer who had purchased a Nissan Sentra last year for $15,000 had the good fortune that his dealer bought it back at a higher price after a year.
I almost left you my old clunker 2010.
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