The COVID-19 crisis hasn’t just crippled the world’s economy, but it has also had a devastating effect on Canada’s car markets for both used and new cars.
This is understandable of course since no one is traveling outside of their homes, there is no need for cars. Owing to this, new car sales could drop by a whopping 25 percent this year
Used cars are also feeling the brunt of this crisis, as there will be a surplus of used cars sitting in car dealerships with little to no potential buyers.
This is, of course, bad news if you’re currently looking to sell your car. But it’s great news for used car buyers! When supply is higher than demand, you’re obviously going to get great deals.
So how much of a price reduction can you expect due to this excess inventory of used cars? According to the Canadian Blue Book, wholesale values for used cars one to six years old could drop by 18 percent for SUVs, vans, and 15 percent for cars.
And you don’t have to rush out to avail these deals, it’s going to take at least 3 years for prices to revert to pre-virus levels.
Note that these numbers are sort of the best-case scenario for used car sellers, so you can find even better deals if you’re currently looking to buy a used car.
For buyers in the market for a used car, this is all good news. But for car dealers, this is pretty grim since they were already operating on slim margins.
Most used car dealerships right now have excess inventory they can’t get rid of. With people staying indoors, conducting business on dealership premises also seems risky.
For this reason, many used car dealerships are shifting their sales entirely online. Of course, if you’re looking for a used car online, you can find a great selection of used cars here.
Dealers in Canada are in a very anxious state right now as it is unclear when the situation will clear up and demand for cars (used and new) will come back. Many dealerships have had to lay off employees simply because of the decrease in car sales right now.
Experts who have tracked Canada’s car sales for decades say that what’s happening right now is unprecedented. Not even the Great Depression matches what’s happening today.
The grim analysis is that no one knows how long the current situation is going to lose, or how demand is going to increase once it’s over.
Even before COVID-19, the used car market was experiencing a drop in prices owing to the growing popularity of leasing.
Many dealerships are also confused as to whether they can remain open in the current climate or not. Well, in Ontario, Quebec and New Brunswick, service and parts departments can stay open but showrooms will remain closed.
Thus, car deals have to be made online.
There are no such restrictions in other provinces.
Carmakers have reacted to COVID-19 by giving some ease to their buyers during the crisis. Every household is going through a financial crunch right now. So Hyundai, for example, is currently offering deferred payments for its customers and extensions on expiring leasing for those who are in self-isolation.
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