Toronto, Ontario — Amid the global microchip shortage, the price of used vehicles in Canada is continuing to climb.
New data from AutoTrader.ca shows the average price of used automobiles has risen by 12.8 percent last month.
The online used vehicle marketplace says in July 2021, the average price of a used car on its site was $20,736, compared to the same to last year when it was $18,383.
“We obviously have a lot of data but we have our own price index, and we’ve been looking at prices to understand what’s happening in the market,” said Baris Akyurek, AutoTrader.ca’s director of marketing intelligence, in a phone interview with CTVNews.ca on Thursday.
The microchip shortages as well as the shortages of various other auto parts has slowed the manufacturing of new vehicles. The lack of new vehicles hitting the marketplace has caused more car buyers to turn to used vehicles, increasing the demand, which of course increases the price.
However, many more factors are at play when it comes to the surging price of used vehicles.
For instance, throughout the pandemic many Canadians developed a fear of public transit, which led to more people wanting to purchase a vehicle. On top of that, Canadians are finding themselves with more disposable income, which could explain the increased interest in purchasing a new vehicle, or at least a vehicle that is new to them.
“We believe, the fact that there’s a decline in interest in public transportation and ride sharing services, as well as the fact that now Canadians have more savings in their accounts… this all created this pent-up demand,” Akyurek told CTVNews.ca.
The surge in prices of used vehicles is far from new. Back in January of 2021, the average cost of used cars increased by 1.1 percent, and as indicated by data from last month those numbers have only continued to escalate.
Automakers are still unable to predict how long microchip shortages will last. However, the price of used vehicles will continue to climb, until those deficits are addressed.