As Canadians enter 2024, those hoping to pick up a new or used car may see similar prices to what was seen in 2023, with automotive experts saying not to expect the cost for a vehicle to return to pre-pandemic levels anytime soon.
During the COVID-19 pandemic, inventory became a big factor due to supply chain issues impacting semiconductors and automotive computer chips, and with it came higher prices due to fewer new and used cars available for purchase.
“So when there (are) fewer cars sold and new cars sold, obviously it has a direct impact on the used market,” Baris Akyurek, vice-president of insights and intelligence at Autotrader.ca, told Global News in an interview. “That’s why we have been seeing inflated prices.”
As 2023 came to a close, however, Akyurek said it has been a “pretty positive” year in terms of availability.
According to Auto Trader’s 2023 trends report released in September, the new car supply had increased from the month prior, with the organization predicting modest increases to inventory in the coming years. New car prices also saw a decline in October, signalling there could finally be a peak in price due to an oversupply of vehicles even with the demand for new cars.
In fact, it notes the new car supply is at its highest level since the middle of 2021, though it still is trying to catch up with “pent-up demand,” with Akyurek explaining there were still 1.3 million fewer vehicles sold between 2020 and 2022.
1:52 Used car market booms due to new vehicle supply issues
This week, DesRosiers Automotive Consultants reported that auto sales jumped 11.8 per cent in 2023 compared to the year prior because of that increased supply. That marks the biggest year-over-year increase since 1997.
Brian Kingston, president of the Canadian Vehicle Manufacturers Association (CVMA), said that an increase in sales will continue this year with a “return to normalcy” expected.
“You’re going to see inventories at regular levels and as a result, Canadians who want to buy a vehicle should be able to go and do so with relative ease and get what they want quickly,” he told Global News.
“It’s been a long and challenging recovery for the industry to come out of this COVID pandemic shock and all the supply chain issues, but I think we are hopefully seeing that in the rearview mirror, finally.”
Used car market could see more inventory, but fewer sales
That jump in demand for more recent models, however, means there may be less of a demand for used cars, for which prices have been declining since the end of summer. In just December, AutoTrader saw a 2.4-per cent month-over-month decrease, something Akyurek said hasn’t happened before.
But the increased availability may have Canadians still gravitating to the used car market, according to George Iny with the Automobile Protection Association.
He says people are often turning to late-model used cars for their availability, as opposed to the price.
“A typical case would be something like a Volkswagen GTI or a Toyota RAV4 hybrid, that’s a vehicle that someone might be waiting six to nine months to receive a delivery on in 2024, if not longer,” he said. “So the advantage of buying a three-year-old one for roughly the same price as a brand new one is you get it right away.”
Kingston adds during the pandemic it was a “seller’s market” for used cars because of the production issues, but in 2024 he expects with Canadians having much more access to new vehicles they desire, the used market will return more to its normal function.
New car prices are still the higher number, with AutoTrader reporting the average sitting at $67,817, a 19.4-per cent increase year-over-year, while the Canadian Black Book reports used vehicle are at $39,155 which is just a 4.3-per cent rise.
2:13 Consumer Matters: Why used car prices remain high
The sales of gas-powered vehicles won’t be the only rise in 2024, with Kingston saying there will be continuing “electrification” with more than 40 additional electric vehicle (EV) models rolling out this year.
“If a Canadian wants an EV, there will be something available that will meet their needs,” he said.
He adds there will likely be more adoption of the vehicles by Canadians this year, pointing out that electric vehicles accounted for 12.1 per cent of all new motor vehicles registered in the third quarter of 2023 — according to Statistics Canada. That’s an increase from 8.7 per cent at the same period in 2022.
In light of the federal government’s recently-announced roadmap to have 100 per cent of cars sold in Canada emitting zero emissions by 2035, Kingston said electrification is going to become more of a focus for Canadians.
“Canadians need to start thinking about an electric vehicle for their next car,” he said. “And starting to look at charging infrastructure, can they install a charger at their home, is there charging available at their place of work, will there be public charging available for the road trips they take, this is going to become increasingly important for all Canadians as we move into this new technology.”
3:22 Consumer Matters: Car buyers facing dealer markups
And while inventory is seeing a boost for both the new and used cars, the Ontario Motor Vehicle Industry Council (OMVIC) cautions the market still hasn’t fully recovered to the point where prices will drop substantially.
“Although there has been some alleviation, the expense of acquiring a vehicle remains high for many Canadians, especially when combined with the currently elevated interest rates,” a spokesperson for OMVIC told Global News in an email.
The organization also warns as Canadians look into a potential vehicle purchase, they should also be sure to know how to protect themselves as supply chain challenges and the resulting inventory issues have led to “nefarious” sales tactics. It said this has included pressuring car buyers to purchase additional products with their vehicle, with it sometimes being presented as mandatory.
The spokesperson said car buyers should recognize they have the right to decline sales arrangements, such as charging a market adjustment fee, and if the dealer refuses, Canadians can walk away and buy elsewhere.
— with files from Global News’ Kyle Benning and The Canadian Press
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
