Third consecutive month of decline
The ADESA Canada Used Vehicle Price Index for January, prepared by ALG Canada, reflected a weakening of approximately one percentage point from December, seasonally adjusted.
Overall auction values were flat as the expected seasonal improvement did not materialize. A third consecutive monthly decline in resale prices can be attributed to high new- and used-vehicle inventories on dealer lots, which they are finding difficult to offload due to both the strengthening of the Canadian dollar (driving consumers to the US) and the diminishing purchasing power of the Canadian consumer (driven by increases in the average debt load).
The burden on the Canadian consumer is not helped by the high Canadian unemployment rate, which declined to 8.3 percent in January, but still remains relatively high.
For many OEMs, 2010 will see heightened levels of off-lease vehicles, which will continue to drive home the necessity and value for out-of-the-box thinking when remarketing those vehicles.
An increase in gasoline prices from 96.5 cents/litre in December to $1.013/litre in January has driven a segment disparity. Less fuel-efficient mid-size SUV and full-size pickup segments experienced some of the largest movements this month, with declines of 3.1 percent and 1.5 percent respectively.
The greatest improvement occurred in the mid-compact segment, which experienced a 2.7 percent improvement. Compact SUV, minivan and midsize vehicles saw lesser improvements of 1.6, 1.2 and 0.2 percent respectively.
