Your used car is now worth more | JDM
Last year, the average price of a new vehicle sold in the country exceeded the psychological threshold of $40,000 for the first time.
A finding that does not surprise the industry, since several affordable models have left the market while luxury is attracting an increasingly large clientele. It must be said that access to credit has never been so easy and that many middle-class motorists today drive BMWs or Mercedes-Benz...
However, although the price of vehicles has risen considerably in recent years, we can also see that the same is true for used vehicles. Dealers are having more and more difficulty getting good deals at auction, where prices are soaring, even for vehicles that, a priori, do not seem so interesting. So it's not just the Toyota RAV4 and Ford F-150 that are worth their weight in gold on the used market. Today, everything is sold, and at a high price.
Residual value on the rise
The market is such that companies like ALG and Black Book, which specialize in establishing residual values for used vehicles, have a hard time keeping up. Because no one is able to say what the real demand for a product will be in six months or a year. Obviously, a large part of this problem is explained by the pandemic, but it is clear that the export of several of our used vehicles to the United States is also a problem.
Then there is the shortage of inventory. A serious problem for dealers who barely sell half of what they could sell. This is especially noticeable in the field of full-size pickup trucks (Ford, GM, Ram) as well as for hybrids on the Toyota side. That said, stock-outs are becoming more and more common, regardless of the vehicle segment.
This phenomenon is explained by the fact that Americans prefer to sell vehicles at home, in US dollars, rather than in Canada, but also because of a shortage of parts affecting the very manufacture of the vehicles. Very recently, the fire at a Japanese electronic chip (semiconductor) factory further compromised the production of vehicles by several Japanese and American manufacturers.
Delays to be expected
As a result, you could wait several months to get your hands on an F-150 pickup truck, a Jeep Wrangler or a Toyota Sienna minivan. Even among compacts, often more popular here than in some American states, inventories are low. Therefore, do not be surprised if the negotiation for the purchase of a new vehicle is more difficult. Because if you don't buy it, someone else will!
Now, you have to understand that your used vehicle is also worth more. Much more expensive. Especially if it's an SUV, minivan, or better yet, a full-size pickup truck or commercial van. For example, for a six-year-old F-150 with 120,000 km, you might be offered today the amount you would have been offered two years ago, when you had only traveled 80,000 km. Even a Dodge Grand Caravan is worth its weight in gold, a phenomenon that is also explained by the fact that the model is no longer manufactured and that minivans today are more expensive when new.
Moral of the story, before you trade in your car to a dealership that offers you to get rid of it at rock bottom prices, do your homework. You may realize that your vehicle, even if its condition is questionable, is worth more than you thought.
And if someone dares to give you a Black Book value, let them know that these days, these guides don't really hold water. Perhaps with the exception of the Weekly Guide, where the values are in my opinion often inflated, probably with a view to pleasing the SAAQ. Because in case you didn't know, the Société de l'assurance automobile du Québec uses the values granted by the Guide Hebdo to collect taxes on used vehicles. Often very strong values... you will have understood why.
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