After several years of solid increases, used car prices have started to soften across North America, finds a Scotiabank Global Auto Report.
The trend is most evident in the U.S., but prices in Canada have also edged down due a rise in the supply of used cars.
“This [is] positive for an industry that has faced a shortage of pre-owned vehicles for some time,” says Carlos Gomes, senior economist and auto industry specialist at Scotiabank.
“However, we expect the supply response and the price correction to be modest, given off-lease volumes will remain well below pre-recession levels for an extended period.”
Still, the softening of prices is welcome news after a report that Canadians are spending too much on cars. That report suggests bank auto lending trends reveal people stretch their incomes for more than mortgages and home expenses. Read more.
Additional auto sector highlights
- Global car sales gained momentum in September, with volumes advancing 3.5% last month, up from only a 1% increase in August. Developed markets led the improvement.
- In Canada, passenger vehicle sales surged 13% over the same period, compared to 2013 sales. They hit an all-time record annual rate of 2 million units. This surpasses the previous peak seen in July 2014, and guarantees that full-year 2014 sales will exceed 1.8 million units for the first time on record.
- Purchases were highest Ontario (up 16%) and Alberta (up 15%).