Still high but used vehicle prices stabilize

Canadian used vehicle prices have stabilized in recent times but still remain elevated. Meanwhile, electric vehicle pricing is still higher than what would be considered affordable to consumers.

At a recent conference, an industry observer noted that prices are still 36 per cent higher than the benchmark set by Canadian Blackbook.

Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book highlighted that the Canadian used vehicle market is seeing stabilization after a period of volatility.

“As North American values have corrected, prices are actually starting to stabilize again,” he said during the fall’s Talk Auto 2024 conference.

While prices started to stabilize in the middle of 2023 and even came down later that year and early next, they’ve generally remained static since.Ross noted that the market index has remained steady and expressed hope for a slow, measured decline in values rather than numbers staying put. However, the current economic situation could change things. There’s concern that tariffs will raise prices of new vehicles, pushing more people to see out used options, which in turn may drive up prices as supply remains weak.

Turning to electric vehicles, Ross discussed the complexities of value retention for EVs and plug-in hybrids.

“EVs should retain value, plug-ins should retain value as the interest for ICE detracts and more of that EV adoption moves forward,” he said.

Ross emphasized the importance of understanding the current state and future outlook of EV adoption in Canada compared to the United States. He pointed out that the narrative around EV sales has been misconstrued.

“The U.S. has sort of posed that EVs aren’t selling,” he noted.

Ross also highlighted the growing market share for plug-in hybrids. “We see a 40 per cent uptick on market share year over year for plug-ins, 35 per cent for EVs — that’s not an insignificant number by any means.”

Looking ahead, Ross discussed the projected EV sales for mandated years. He figured that we’ll get to the federal government’s goal of 20 per cent EV sales by 2026. He made the comments before it was announced the government was pausing its rebate program but did note the impact of changing incentives and rebates across Canada.

 “But 2030 is more likely a possible miss at this point,” Ross observed.

But he emphasized the need for lower-priced EVs to meet future targets. “Ultimately, we have the product. We have the customers to buy them. We just need the price to fall in line with that. And with the entrance of lower price EVs, we expect that to sort of follow that trend.”

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