ADESA Canada Price Index
ADESA Canada is the largest provider of wholesale used vehicle auctions in Canada. The Index is calculated from millions of pieces of sales data from ADESA Canada’s live open bidding auctions.
The ADESA Canada Used Vehicle Price Index has been updated through December 2021. The index increased after being adjusted for seasonality. Wholesale prices increased on average by .6 % M-o-M.
2021 auto sales performed better than 2020; according to industry experts – almost 7% better. However, when you compare 2021 to last ‘normal’ year before the pandemic (2019) or Canada’s best sales year (2017), 2021 shows a decline of 15.5% or 17% respectively. As far as the 2021 standings go, Ford, Toyota & GM rounded up the top three spots for volume and the majority of the OEM’s are reporting year over year gains.
Canada continues to feel the effects of Covid19, and provinces have been re-introducing various lockdown measures to maintain a health care system that has been battered by the pandemic. In the auto industry we see two spectrums, OEM’s managing their business by employees working remotely and on the other side, retailers have been deemed an essential service and modified their business to work within the parameters covid has imposed upon us. With ever shifting priorities dictated by forces outside of their control, the industry has responded with resilience and stability.
ALG doesn’t see significant changes in the next half year. The industry will be constrained by the pandemic and inventory challenges fueled by chip shortages. Any improvements to production would have to be significant to offset the current low day supply OEMs have been tasked with. Demand impacts remain strong – Canada has seen favorable economic growth; customer outlook is positive, and the levels of government are carefully monitoring pandemic effects and will mandate support until such time when the country is fully open and back to ‘normal’. We are cautiously optimistic that we will see inventory improvements in the later part of the year that would provide positive traction going into 2023. But time will tell – these are unprecedented times.
Price movements by segment were mixed in December. Midsize vehicles showed the most drastic increase at 7.6% ($1,335), followed by Midsize SUVs at 3.3% ($862). Fullsize Pickups should the most drastic decrease at -4.1% ($1,544), followed by Minivans at -1.3% ($242), Compact SUVs at -1.0% ($210), and Mid Compacts at -.8% ($122).
How ADESA calculates the UVPI
ADESA Canada is the largest provider of wholesale used vehicle auctions in Canada. The Index is calculated from millions of pieces of sales data from ADESA Canada’s live open bidding auctions with the addition of used vehicle auction sales data purchased through the National Auto Auction Association [NAAA]. The data is adjusted for a large number of variables, including type of vehicle, mileage, age and season. A two-step statistical filtering process excludes extreme values in the raw data. The resulting Index provides a picture of the Canadian used vehicle market and depicts the trend of used vehicle prices in Canada.
ADESA Canada notes that the index provides insight into the economy as a whole and consumer spending patterns. It also points to the direction of the used vehicle market and, by implication, of the new vehicle market, as there is a complex relationship between the prices of used and new vehicles which is reflected in the adage ‘Today’s new vehicle is tomorrow’s used vehicle’. Typically, used vehicle prices respond to many macro variables, such as the health of the overall economy, financing available to new versus used vehicles; the volume of vehicles in the pipeline, the age of vehicles on the road, the U.S. dollar exchange rate, incentives and the number of vehicles coming off lease.