Used car market In Canada – Everything to know
While the cost of new cars in Canada continues on an upward trend, the used vehicle market is finally starting to cool according to some experts.
As Canada begins to return to a “new normalcy” from the COVID-19 pandemic, demand for vehicles is balancing out and “prices are dipping,” specifically in the used car market, said Dimitry Anastakis, a professor at the University of Toronto’s history department and the Rotman School of Management.
“We’ve had some crazy politics, some crazy economy, some crazy pandemic, some crazy climate change, and all of that has a real impact on cars,” Anastakis told Global News.
Why are the prices of used cars falling?
Vehicle pricing over the past few years has been steep with the industry being hit by global semiconductor chip shortages, exacerbated by the pandemic and Russia‘s war on Ukraine. This left most automotive manufacturers scrambling for parts as they struggled to meet delivery demands for new vehicles. Consequently, prices for used vehicles soared as they were readily available.
However, prices are now slowly on the decline.
“The prices are going down (because) there’s been the lessening of demand,” Anastakis said.
“In the used car market, a key reason prices are going down is that they’ve been so tremendously high since COVID. The auto industry slowed down considerably, which caused a scarcity…so prices went through the roof,” he said. “Now prices are coming down a little bit because some of that pressure has been alleviated.”
Challenges faced by the new car market, including delivery delays, also drove people to choose used vehicles during the pandemic leading to high prices, according to Werner Antweiler, professor of economics at the University of British Columbia’s School of Business.
But now, as also noted by Anastakis, some pandemic obstructions are starting to wear off and demand for used cars is starting to stabilize, Antweiler told Global News. As a result, prices are going down.
“Some of the challenges we saw during the pandemic with deliveries led to people buying more used cars and that has been driving up demand for the lack of supply in the new car market,” he said.
“Now, that is starting to balance out a little bit. It’s getting back to normal, not quite there, but certainly it’s changing in that direction. And so, some of the pressure is coming off the used cars market.”
What about new cars?
In the new vehicle market, prices are seemingly remaining steep, according to Antweiler.
“We had a significant drop in car sales and as a result of the pandemic, we also had significant challenges to our supply chain. All that contributed to driving the prices up and now during the second half of the year, we have also seen interest rates go up,” he said.
And with interest rates on the rise, purchasing a new vehicle is becoming more expensive and slowing down demand because of the need to finance or lease, Antweiler explained.
“Be mindful of interest rates,” he said. “We are still in a landscape where interest rates are going to be high for the remainder of the year. The higher cost from financing has slowed down demand.”
At the end of last month, the Bank of Canada delivered another hike into its key interest rate. The central bank raised the rate to 4.5 per cent, an increase of 25 basis point and the highest the Bank of Canada’s key rate has been since 2007.
Moreover, the chip shortage hasn’t entirely passed either, according to Anastakis, so Canadians can still expect prices of new vehicles to remain high.
“There’s been problems in supply which have really led to cause a spike in prices. One of the reasons chip-making is so important is because it fuels the auto industry and because of that chip demand — which was spiked during COVID, because people wanted to buy more digital devices because they’re all at home — there has been a slowdown,” he said.
“You have your phone and it’s got chips in it, but your car has way more chips and there’s such a big demand.”
A look at the electric vehicles market
When it comes to electric vehicles, prices of some makes are starting to balance out with fuel-run cars, according to Jospia Petrunic, president and CEO of the Canadian Urban Transit Research and Innovation Consortium.
In the U.S., Tesla Inc. recently cut prices by nearly 20 per cent on most of its models in an effort to bolster demand and raise market share.
Following that decision, Ford also announced it would be slashing prices on its Mustang Mach-E electric SUV by nearly US$6,000.
“It’s not just that automakers woke up and decided to be environmentalists. That’s not what’s happening,” Petrunic told Global News.
Demand for electric vehicles has largely remained low, but inflation has continued to rise, said Petrunic, so electric vehicle makers are trying to get as many consumers to enter the market before they get priced out.
“What they’re trying to do is price slash to get you into the market to buy these electric cars before inflation and recessionary conditions make it totally unlikely and impossible,” she said. “It’s really automakers seeing the writing on the wall.”
In Canada, automakers may receive federal or provincial rebates if their electric vehicle is priced below a certain price. This is also causing costs to drop, according to Petrunic.
‘Way more choice and way more options’
According to Anastakis, the world is at the tip of an “electric vehicle revolution.” With that in mind, he suggests consumers to wait, if they can, before entering the market.
“It took about 25 years for the automobile revolution the first time around to really figure self out. And we’ve already got a lot of the infrastructure for automobiles because we’re not changing them. We’re just changing the way they’re powered,” he said.
According to Antweiler, “the market is changing because of the transition from combustion engine vehicles to electric vehicles.”
“We expect to see a lot more models coming into the market all year or next as manufacturers are gearing up production of electric vehicles,” he said.
But, the first thing to remember when on the market for any type of vehicle is to shop around, Antweiler added.
“Compare different manufacturers on models because there are great differences. It’s always very wise to compare and get all the information you can,” he said.
When buying a used car, it’s important to check the vehicle history report, have the car inspected, take it for a test drive and ensure the proper paperwork is completed upon purchasing, according to a 2021 report from Edmunds, an online car shopping guide.
If you are buying a car from an individual owner, make sure the seller properly transfers the title and registration to you. It’s important to close the deal correctly to avoid after-sale hassles,” the report said.
And for those who are entering the market at this time, Petrunic is cautioning about delivery delays on new cars.
“What I do think is probably here to stay for a relatively elongated period of time is the fact that what you buy may not arrive in the next few months of longer term, she said. Car ownership is unpredictable and expensive and who knows how long our economic constraints will last.”
Risk of a hard landing for Canadian economy is up, former Bank of Canada governor says – CTV News
Former Bank of Canada governor Stephen Poloz says Canada’s economy is at a greater risk of a “hard landing” — a rapid economic slowdown following a period of growth and approaching a recession.
Amid the central bank’s interest rate hikes intended to tame inflation, inflation cooled to 5.2 per cent in February. That’s down from 5.9 per cent in January, after 40-year record highs over the summer, reaching as high as 8.1 per cent in June.
Poloz told CTV’s Question Period host Vassy Kapelos — in a joint interview with former Liberal finance minister John Manley airing Sunday — the Bank of Canada and federal government’s efforts to rein in inflation are working, but the chances of a hard landing remain.
“The risk of a hard landing has definitely gone up, given that so much has already happened, and we’re still waiting for the rest of the effects of interest rate rises to work their way through,” he said, adding he is “heartened by the response of the supply side of the economy.”
“That’s really where a soft landing comes from,” he said. “It’s not fancy engineering on the part of the central bank. But as the supply side continues to grow — such as new entrants into the workforce, from immigration and from parents who are taking advantage of the new childcare policy — those kinds of things are giving us, coming up from below, strengthening the economy.“
While Poloz said the supply growth is a good sign, at this point it would require “some luck” to achieve a soft landing and avoid a recession.
Federal Finance Minister Chrystia Freeland meanwhile is set to table the budget on Tuesday.
She’s long been signalling Canadians can expect fiscal restraint to avoid stoking inflation, but also some significant investments. Namely, the government has been teasing targeted measures to help relieve the impacts of inflation, plus the already-announced $196 billion in health care funding for the provinces and territories over the next 10 years, and clean economy spending to help compete with the U.S. Inflation Reduction Act, which offers billions of dollars in energy incentives south of the border.
Poloz however called last year’s federal budget a “missed opportunity” to “have a different mix” of spending, and in doing so “lower the trajectory of the Bank of Canada’s interest rates.”
He said there’s now less risk government spending will counteract the impacts of the Bank of Canada’s interest rate hikes.
“I think we’re mostly beyond that point as an issue,” he said, adding last year would have been a more opportune time to stimulate the economy.
“That might have been better for everybody,” Poloz continued. “But that missed opportunity is behind us and now the economy is clearly slowing down. We got all that news in the fourth quarter, sooner than most people expected.”
“All the interest sensitive parts, such as housing and business investment, had been down three quarters in a row already, so in that sense, it feels recessionary already,” he added. “So in that sort of space, I think that business about causing inflation is off the table.”
With files from CTV’s Question Period Senior Producer Stephanie Ha
Questions raised about safety of Old Montreal building destroyed by fatal fire
MONTREAL — More than a week after a fatal fire tore through a building in Old Montreal, accounts from former tenants and victims of the blaze are raising questions about the safety of the heritage property.
Four bodies had been found as of Friday afternoon and three people were missing in the shell of the once-elegant greystone building.
Police and firefighters have said it’s too soon to say what caused the fire. But witnesses have raised questions about safety, including whether smoke detectors were working and whether there were proper emergency exits.
A rental tribunal decision shows that in 2012, the owner, Emile-Haim Benamor, blamed actions of a tenant for creating a risk of fire in the building. The comments are found in a Sept. 6, 2012, decision from Quebec’s Régie du logement, stemming from a dispute between Benamor and a tenant whose lease he was trying to end. According to the document, Benamor claimed the tenant was “manipulating electricity” and had “modified or added” electrical systems and overloaded the building’s circuits.
“The landlord insists that in the current state of things, the building is not profitable, he is unable to have access to the apartment … that there is a risk of fire and he says he is being monitored by insurance companies, especially since it’s a historic building,” the tribunal’s decision says.
The landlord also called a witness from the insurance company Lloyd’s, who testified that the unit presented safety concerns. In an affidavit included in the tribunal decision, Michel Frigon said the unit was not originally intended to be an apartment but rather a storage area. Frigon noted that access to the unit was required to perform maintenance of the building’s heating and electrical systems.
“The shower adjoining the electrical entrance to the dwelling presents a real danger of electrocution,” he added, saying a new insurer would likely have to be found if the problems weren’t fixed.
But in her written decision, administrative judge Jocelyne Gascon concluded there was little convincing evidence to suggest the tenant, Piotr Torbicki, was to blame for any electrical issues.
“The various electrical systems, although they appear to the court to be non-compliant, obsolete, the evidence offered did not establish that it was a recent addition,” Gascon wrote. She did not offer an opinion on Benamor’s comments about the risk of fire.
The building, known as the William-Watson-Ogilvie building, was built in 1890 and originally housed the offices of a flour company. It was gradually converted to residential use between the late 1960s and the 1980s, with the office of an architecture firm remaining on the ground floor. Municipal property records show Benamor, a lawyer, bought the building in 2009.
Since the fire, both the father of a missing woman and a former tenant have said at least one of the units had no windows or fire escape, while survivors of the fire have suggested the fire alarms never went off.
Louis-Philippe Lacroix said his 18-year-old daughter Charlie, who is presumed missing in the fire, called 911 twice within several minutes to say she was unable to get out of the unit she and a friend were staying in, which had no window and no fire escape.
A survivor of the fire, Alina Kuzmina, said that while the semi-basement unit she’d rented with her husband had fire alarms, she doesn’t remember hearing them go off. Kuzmina was able to escape the building by breaking a window and crawling out.
The owner this week responded to the claims through his lawyer, saying the alarm system was replaced in 2019 and regularly tested. Regarding the emergency exits, lawyer Alexandre Bergevin said the building’s layout is complex.
“It has always been deemed compliant in the past,” he said in a text message.
A former tenant spoke on condition that he not be identified, saying he fears reprisals from Benamor, who owns multiple buildings in the city. The former tenant said that in recent years long-term tenants have gradually left and been replaced by units rented on the short-term rental platform Airbnb. He also said some units had been subdivided, and at least one did not have windows.
Benamor’s lawyer, Alexandre Bergevin, said in an interview Friday that the short-term rentals in the building were the work of tenants and not his client. He said one person was renting seven units in the building and “illegally” listing them on Airbnb. He said that Benamor had told the person to stop the short-term rentals, and they had reached an agreement for him to leave the building by July 1.
“It’s a real scourge, it’s uncontrollable,” Bergevin said of the Airbnb rentals. “He had doubts on several tenants in several buildings, but it’s quite difficult to get the proof of all that.”
The lawyer acknowledged that one apartment in the building “didn’t have a window in the traditional sense of the term,” but it did have a skylight.
Asked whether the smoke detectors were working, he replied: “That’s an excellent question. We don’t know yet.” But he said there were detectors in all apartments, the central detector had been working the day before the fire and it would be surprising if all of them failed.
Bergevin said he was not aware of any specific electrical problems, including those raised in the 2012 rental tribunal decision, but noted that the building dates to the 19th century.
“It’s certain that it’s not the electricity we know today,” he said, adding that at certain points when issues arose, qualified electricians worked in the building.
Benamor, he said, has felt under attack since news broke that people had died in the fire.
“The public trial, while we have no idea of the causes of the fire, is causing him a lot of psychological distress,” he said.
This report by The Canadian Press was first published March 25, 2023.
Morgan Lowrie, The Canadian Press
St. John’s, N.L., airport closed after late night fire on 2nd floor forces evacuation
ST. JOHN’S, N.L. — A fire on the second floor of the international airport in St. John’s, N.L., resulted in the facility being closed late Friday night.
The airport authority said today the main terminal building was evacuated due to a “significant event” on Friday at 11:30 p.m.
No other details were immediately available.
The authority said in a release today it is working with police and the fire department to ensure all protocols are being followed before reopening the building.
The news release says the terminal building was expected to remain closed to the public until 6 p.m. on Saturday.
Passengers are being advised not to visit the airport until there is a public advisory the terminal has reopened.
This report by The Canadian Press was first published March 25, 2023.
The Canadian Press
Hab posts video showing frustration with punishment for Bruin – CTV News Montreal
Risk of a hard landing for Canadian economy is up, former Bank of Canada governor says – CTV News
Senators' playoff push takes huge hit with Chychrun lower-body injury – CBC Sports
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Investment2 hours ago
Private-sector investment brings touch of Hollywood to southern Manitoba town – Winnipeg Sun
News7 hours ago
Canadian park among world’s most beautiful: Big 7 Travel
Investment7 hours ago
Investing isn’t free. But here’s why 20% of investors think it is
Business8 hours ago
Windsor-Essex brewers lament impact of looming 6.3% alcohol tax
News22 hours ago
Calling for closer Canada-U.S. ties, Biden says ‘our destinies are intertwined and they’re inseparable’
News21 hours ago
Canada extends support for those fleeing Russia’s illegal and unjustifiable invasion of Ukraine
Real eState24 hours ago
The mystery of a tiny Toronto laneway that sparked a historical real estate drama
Media20 hours ago
Trans Flight Attendant Famed For United Airlines Ad Found Dead After Emotional Social Media Post