Used vehicle: Americans are driving up prices
Taking advantage of the weak dollar, US traders come to shop on this side of the border. To the chagrin of their Canadian and Quebec counterparts. To the delight of consumers we are. The used car market is under pressure.
“It’s a problem for us, the cars can not sell here. “Times are tough for Michel Noël and its members. Since the Canadian dollar dropped below 85 cents US helm in January 2015, the competition from the United States.
The president of the Merchants Association of Quebec used vehicles (AMVOQ) often saw American traders cross the border to build up stocks of used cars which will be sold in the Midwest and elsewhere in the south. But last year, the flow is incessant: 200,000 Canadian vehicles have crossed the border, just last year, according to data from DesRosiers Automotive analyst firm.
“Americans pay used cars a lot more than us, especially at auction, where is the big market. […] We, if we want to have, you have to pay more for them, it did not sell well and there is more profit after behind, “says Claus.
The reason for this is simple inflation, as recalled Brad Rome, President of the Canadian Black Book vehicle valuation benchmark, “This is largely due to the Canadian dollar, which fell significantly during the last year . What is now happening is that the value of used cars in Canada is lower than in the US, where there is currently a significant demand, particularly for light trucks and SUVs. American merchants so come here and see that there are bargains to achieve. ”
US traders are not the only winners in this situation. Canadian consumers, and therefore Quebec, are also very good business. “People sell nice pick-up in 2012 at the same price it was three years,” Michel Christmas shows.
“We saw some prices above the original retail price,” says its CEO to AMVOQ, Steve De Marchi.
At the recent publication of its list of vehicles that will sell best, the Canadian Black Book noted that the average depreciation had weakened by 6.3% in one year to 11 SUV models, light trucks and vans. The best example is the 2012 Jeep Wrangler which, after four years, has retained 79% of its original selling price, which is 10 percentage points higher than last year at this time.
On the resale market, so the owners have “the upper hand” as they say. And the local shopkeeper has little leeway.
“When you’re asking too much for a used vehicle, the client will look for a new vehicle, said Michel Noël. […] In the category of small cars and low end, this does not affect us. It is in the luxury light trucks and large there is problem. ”
Reassured by an incredibly low gasoline prices and economic conditions rather favorable, the American consumer is very fond of SUVs and light trucks.
Since it is a seller’s market, it is welcome to take the time to check out average prices at resale, says Brad Rome. Do not forget that the impairment is the largest expense on a vehicle.
“It is hard to predict the future and the trend of the next two or three years, there are several factors that come into play. But if current conditions persist, the demand will still be there, “the president judge of the Canadian Black Book.
“It will take two or three years to recover, before the market is stable again and prices return to a certain logic. It’s part of the game, “admits Michel Noël.