Prices paid for new vehicles in Canada have continued to jump so far in 2023.
Data from DesRosiers Automotive Consultants show that the average transaction price for a new light truck or passenger car is $52,900 — up nearly 6 per cent from the end of 2022 when the average transaction price was $49,9000.
Driving that jump is the increase to light trucks at an estimated transaction price of $54,000 on average by the end of the third quarter this year. Passenger cars came in at $46,000. Both are up from $51,700 and $41,800, respectively, at the end of 2022.
Because light trucks make up about 86 per cent of vehicle sales, the overall average transaction price skews higher.
These figures once again represent the highest transaction prices ever in Canada.
“New light vehicle transactions have been getting more expensive as a result of semi-conductor shortages, the growing share of EVs, a shift to light trucks, and broader inflationary pressures,” said Andrew King, managing partner at DesRosiers.
He added that there has been a $10,000 jump — almost 20 per cent — in the average transaction price for light vehicles over the last four years.
Guido Vildozo, a senior manager who forecasts light vehicle sales in the Americas, noted at Canadian Black Book’s Talk Auto event earlier this month that even while dealer inventories are increasing, customers typically only have higher-end, more expensive options from which to choose. He called it the “wrong” type of inventory that won’t help people who want to buy a new vehicle as they can’t afford these elevated prices. And that’s on top of economic pressures.
And prices could go higher. Ford said its new deal with the United Auto Workers union could raise costs USD$8.8 billion, which works out to about $900 per vehicle, by 2028.
“While even greater increases in used vehicle prices have helped many consumers with the equity of their trade-in, the increase in new vehicle prices combined with high interest rates is obviously creating a challenging market environment that we will be watching closely in 2024,” DesRosiers’ announcement about the stats said.