Low new vehicle inventories, strong consumer interest in SUVs and money saved by many households during the pandemic. The ingredients are there to drive up vehicle prices, whether new or used. The online ad website AutoTrader.ca, known in Quebec as AutoHebdo.net, looked at data from the past year to paint an unequivocal portrait: more and more vehicles are being purchased big and expensive.
Posted at 5:45 p.m.
Based on ads posted on its website, AutoTrader says the average price of a new vehicle sold in Canada last year broke the $50,000 mark for the first time ever, at $50,758. This 12.7% increase is explained by the appeal of larger vehicles. According to a survey conducted by AutoTrader, 48% of respondents who own a car said they wanted to get their hands on an SUV when buying their next vehicle. In Quebec, the increase was 12.9% in 2021 for an average price of $45,975. This is still nearly $9,000 less than in Alberta ($54,859), which sits at the top of the price list.
The money set aside by consumers during the pandemic is also fueling this swelling. The Bank of Canada has estimated that households have accumulated a savings surplus of 100 billion over the course of 2020. It should also be noted that cars, historically less expensive than SUVs, are becoming increasingly rare in all manufacturers’ ranges. The example of the expected retirement this year of the cheapest car on the market, the Chevrolet Spark, is the direct consequence of this unbridled demand for larger vehicles.
An even more marked increase on the second-hand side
As for the used vehicle market, the rise is even more dazzling. Fueled by the extraordinary low inventory of new vehicles attributable to the semiconductor crisis, a used vehicle listed on the AutoTrader site had an average list price of $33,240, another record according to the company. This is a growth of 34.5% compared to 2020. Quebec ranks second just behind Ontario in terms of the percentage of annual increase, at 35.4%. The price is lower than the national average, however, standing at $29,434.
We now hope for a stabilization of the supply of new vehicles in 2022 to stem this extraordinary inflation in prices.