This year, Canadians are feeling the pressure of consumer price index inflation in multiple industries. Many are shocked at the soaring prices of groceries, housing, energy, and transportation. According to the Canadian Chamber of Commerce, the price of vehicles is up 8%. Since many of us choose to buy used cars in order to save money, it’s no surprise that drivers were alarmed at the soaring price of used vehicles in recent months. Could there be relief on the horizon?
If you’re looking to work in the automotive industry in the future, it will be beneficial to your career to understand market fluctuations in the used car market, as many auto repair shops also sell vehicles. So, what exactly caused the recent increase in used vehicle costs? What’s the outlook like? What industry trends can we expect to see in the future? Let’s explore the answers to these questions below.
What Drove the Used Car Market Up?
We’re now clawing out of two years of record-breaking inflation, which caused both new and used car prices to soar. The COVID-19 pandemic has driven supply chain disruptions like the devastating global microchip shortage, which you’re probably aware of if you’re in automotive training. Inventory issues and long wait times significantly affected the new car market, causing prices to soar. This frustrating situation caused many habitual new car buyers tired of searching and waiting to reconsider their purchasing habits and purchase used cars instead, which likely drove used car prices.
Can You Expect to See Prices Fall After Automotive Training?
On the bright side, according to market experts, used car prices are already starting to decrease while the new car crisis continues. Inventory is still short, and prices are climbing as automakers create more expensive models to compensate for supply chain issues. Those who didn’t change their buying habits months ago are being forced to buy used cars now. The average price of used cars listed on Autotrader peaked in June at $38,097 before declining 0.4% for two consecutive months after that. Experts predict that the effects of inflation on the used car market will soften in the coming months.
How Should Consumers React?
How should you advise customers when you begin your automotive career? Well, the market will evolve, and sometimes, the results are unpredictable. That being said, as always, consumers should do lots of research before making car purchases and stick to their budgets, but at the moment, upon finding a vehicle that suits their needs, consumers should be quick to make purchases. Since many consumers are taking advantage of the falling prices right now, when buyers wait too long to make a purchase, their vehicle of choice could be gone.
Throughout your auto mechanic career, you’d do well to keep up with used car market trends as they change. With automotive training at CATI, you’ll learn everything you need to know to break into the automotive industry, whether you plan to go into auto body repair, dispatching, service operations, diesel, detailing, or sales.
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