'It’s an incredible time' for used-vehicle pricing

The prices of some used vehicles are expected to remain high until 2026 as supply and demand will continue to be rocked by shortages of new-vehicle inventory, said James Hancock, director of OEM strategy and analytics at Canadian Black Book.

Hancock said a return to normal in new-vehicle inventory — hampered by COVID-19 slowdowns and microchip shortages — isn’t expected until the second half of 2023. With fewer new vehicles being sold, fewer used vehicles will be available in 2024, 2025 and 2026.

“Now, 2021 was the peak [in used-vehicle prices], and we’ll start to see values come down from that peak, but still remain above pre-pandemic levels into 2026,” Hancock told Digital and Mobile Editor Greg Layson on the Automotive News Canada Podcast April 29.

Hancock said used vehicle sales have risen 4.1 per cent since the start of 2022, driven by shortages in new-car supply. However, used-vehicle prices have fallen is in the full-size crossover, SUV and pick-up truck segments. As gas prices skyrocketed in the fallout of Russia’s invasion of Ukraine, demand for less fuel-efficient vehicles has dropped dramatically while sales of compact and subcompact cars have risen 10.1 per cent.

“To be honest, I’ve never seen anything like this. I’ve been in the auto world for 15 years and it’s an incredible time,” he said. “Even during the financial crisis, we didn’t see this kind of rebound for used car prices.”