Price of new vehicles hits record high average of more than $66,000: Autotrader.ca
Canadians looking to buy a new vehicle should brace themselves for higher prices, as it’s more expensive than ever to buy one.
According to Autotrader.ca’s June Price Index, the average new vehicle price reached a record high of $66,288, a 21 per cent increase compared to the same month last year. The cost of purchasing a used vehicle is also up, jumping 4.1 per cent compared to June of last year, with the average price coming in at $39,645.
The soaring prices come despite the fact that vehicle inventory levels have improved since the COVID-19 pandemic caused chip shortages and supply chain issues, leaving many car dealership lots close to empty. Inventory levels are up around 50 per cent compared to last year according to Autotrader.ca, but remain below pre-pandemic levels. That, combined with pent-up demand for vehicles following the pandemic, has resulted in higher vehicle prices, says Baris Akyurek, vice president of insight and intelligence at Autotrader.ca.
“Things are looking better, but compared to where inventory levels were in 2019 and the beginning of 2020, there’s still quite a bit of catching up to do,” Akyurek said in an interview with Yahoo Finance Canada.
“While more inventory is coming onto the market, whenever there are cars they are being gobbled up, because there’s still quite a bit of pent-up demand. Until supply catches up with demand, we’ll probably keep seeing prices on the higher side.”
The average price of a new truck in June was $75,072, Autotrader.ca found, up 7 per cent from last year. The average price of an SUV, the most popular vehicle choice among Canadians in the first half of 2023 according to Desrosiers Automotive Consultants, was $61,285, up 16 per cent compared to 2022. New minivans cost an average of $59,851 (up 18.4 per cent year-over-year), while new cars cost $56,264 (up 39.6 per cent year-over-year.) Autotrader.ca's Price Index is based on pricing data collected from listings on its website, with averages adjusted based on make and age of vehicles available.
Akyurek said while it’s difficult to predict when prices may come down, he does not expect a dramatic change in prices anytime soon, given that supply will take time to build and that consumer demand has so far been resilient.
“It takes time for inventory levels to get built up… and pent-up demand has been pretty strong. We don’t expect any big declines in demand anytime soon,” he said.
“There will probably be softening in prices at some point, but we do not expect prices to come down to pre-COVID levels anytime soon.”
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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