Auto Service World
News   March 7, 2024   by Adam Malik

The dynamic shifts facing the used market

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The Canadian used vehicle market in 2023 has been marked by a series of contrasting developments, a new report has found.

Initially, used vehicle prices stayed significantly high due to a tight supply. However, as the new light vehicle market began to recover in the latter half of the year, a shift occurred with consumers starting to lean towards newly available vehicles.

Andrew King, Managing Partner at DesRosiers Automotive Consultants noted the changing landscape.

“With the resurgence in the new vehicle sector, the ensuing years for the used vehicle market are poised to be intriguing,” he observed.

He highlighted the impending scarcity of recent model year used vehicles due to declining off-lease numbers and noted that factors like rising new vehicle prices, zero-emission vehicle (ZEV) mandates, and changes in financing are expected to keep the used market dynamic into 2024 and beyond.

A survey conducted among UCDA (Used Car Dealers Association) members revealed that sales volumes varied significantly between franchised new vehicle dealers and independent used vehicle dealers in 2023. Franchised dealers reported average sales of 311 units, while their independent counterparts reported 160 units on average.

Looking ahead to 2024, both groups are optimistic about sales growth, with average unit sales anticipated to increase from 203 to 224. Specifically, franchised dealers expect a rise to 341 units, while independent dealers foresee an increase to 177 units.

The survey also addressed concerns regarding vehicle supply and sourcing over the past six months. Independent dealers reported worsening supply conditions, while 37 per cent of franchised dealers experienced improvements, correlating with increased new vehicle sales and trade-ins. In contrast, a smaller fraction of franchised dealers faced challenges in sourcing used vehicles.

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