It’s a hot market for used and new vehicles as low inventory, high demand and a microchip shortage are all driving up car prices to historic levels.
“We have been seeing prices increase in the Canadian market for used vehicles week after week for over 12 weeks now,” said David Robins, the principal automotive analyst with Canadian Black Book.
He explained it’s due to the lack of new cars being made as the pandemic led to auto plant shutdowns and a microchip shortage.
He also said car companies underestimated the demand for vehicles during the onset of the pandemic, but the demand to buy has only proven to be strong with no sign of it slowing down.
This doesn’t come as a surprise to Sean Tyler McMicking, the co-owner of Malibu Motors.
“We’re dealing with the increase. We’re paying more for the cars. So, we’ve felt it for awhile now and you can kind of see out there in different car lots, more holes, right? There’s less cars on the lots,” he said.
Used retail prices are up 15 per cent of where they were late last year, according to J.D. Power.
While the demand seems strong in other parts of the country, some in Victoria have decided to hold off on buying for now.
“Yeah, I’m not really in the position to buy a car at an inflated price,” said Josie Cook.
“It doesn’t seem very cost-effective when I can take the bus or bike,” said Michael Young.
“Cars are ridiculous,” said Brody Neureuther, who recently bought a car in the private market. “Cars should not be like a quarter of the price of a house.”
While it is a seller’s market, the sky-high prices aren’t expected to last forever, according to Robins.
“If a first-time buyer isn’t in a desperate need for a vehicle and can hold off, they probably will find a little better pricing situation next year,” he said.
With production levels going back to normal, according to Robins, we can expect to see more new cars in the market in the coming months ahead.