Washington, D.C. — U.S. vehicle inventory is down 50 percent, leading to some used cars selling for more than what they sold for when they were brand new.
This raises questions on if Canada’s automotive industry will be in the same predicament later this year.
Although new car inventory is down only 20 percent in Canada, American dealers are paying a premium to purchase Canadian vehicles and getting them shipped to the U.S., and Warren Bernard, the executive director of the Used Car Dealers Association of Ontario, says that means less inventory for Canadians.
“With the favourable exchange rate and the high demand from consumers, American dealers are able to outbid Canadian dealers at auctions,” said Barnard.
Alongside that, used vehicles in the U.S. are now worth more than when they were new because of the inventory shortage. A new 2020 Kia Telluride was sold for $44,166 and a used one is now being sold for $47,730, which is an 8.1 percent increase. Karl Brauer, executive analyst for iSeeCars.com says that it is shocking at how common this is becoming.
“Certain models are actually more valuable as used models than they are as new models,” said Brauer. “They are saying ‘I need a car and I would like a new car, but I will take a used car at this point and I will pay a little more for a used car’ which is crazy.”
Although used vehicle prices in Canada are on the rise, currently Brauer doesn’t see the used vehicle prices exceeding new vehicle prices any time soon.
“I don’t see it happening yet, but I could see it happening. It wouldn’t surprise me,” said Barnard.
