NW Week

Saturday, August 13, 2022

Due of an ongoing shortage, prices are high and options are restricted

High pricing and restricted options are the result of an ongoing shortage.

Key Takeaways:

  • Due to a persistent supply shortage of new and used cars for sale, buyers in the market for a new vehicle now have fewer options, longer wait times, and higher pricing.
  • There has been a recent rise in demand in zero-emission automobiles, according to Jeremie Bernardin, an electric vehicle salesperson in Halifax.

Buyers in the market for a fresh car are now faced with fewer alternatives, longer wait periods, and increased prices due to the continuous supply deficit of new and used autos for sale.

Veronica Negro, a Toronto resident, described her recent experience buying a new vehicle to replace her used Honda Civic after it was involved in a car accident as difficult.

She told CTV News that her insurance couldn’t match the price of her old car, let alone the restricted number of genuinely available cars, forcing her to narrow her options. She had to enlist her father’s assistance in finding a new vehicle in the end.

“I expected it to be a hardship,” she added, “but not to the point that my father is telling me that he is waiting in lines for me.”

Also read: As long as inflation remains high, the Bank of Canada is likely to raise interest rates

“And the car is gone by the time he comes to the front.” It had the feel of an auction rather than a car showroom.”

Sellers said they’re having trouble keeping up with demand. Inventory at Toronto Auto Group’s used car lot has dropped to 550 automobiles, although the facility’s capacity is generally about 850.

“There is no supply, and that is an issue,” Neil Puri, president, and CEO of Toronto Auto Group, said.

WHAT IS THE REASON FOR THE SHORTAGE?

The car shortage in Canada, according to experts, is due to supply chain concerns affecting several businesses.

“In the last couple of years, chip shortages (and) supply chain interruptions prompted car manufacturers to create fewer automobiles,” Baris Akyurek, director of analytics at AutoTrader.ca, said.

The scarcity of new cars is also driving up the average price of secondhand cars. As per the AutoTrader Price Index Report, the average cost of a new automobile is $53,000, up 17% from a year ago, while the average cost of a used car is $37,000, up a whopping 38%.

High pricing and restricted options are the result of an ongoing shortage.
High pricing and restricted options are the result of an ongoing shortage. Image from WIRED

According to a new poll conducted by Rates.ca in April, over 40% of Canadians have modified their intentions to purchase a vehicle due to a shortage of new automobiles and rising used vehicle prices.

Those looking to buy electric cars would almost certainly face challenges as well.

According to Jeremie Bernardin, an electric vehicle salesperson in Halifax, there has been a recent surge in interest in zero-emission vehicles. However, wait times can be as long as 3 years, depending on the brand and the dealership.

As per the report commissioned by Transport Canada in March 2021, more than half of Canadian dealerships have no electric vehicles in stock.

According to the research, 31 percent of dealerships with no zero-emission vehicles in stock had wait times of more than six months.

Source: CTV News

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