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 September 2021. The index increased after being adjusted for seasonality. Wholesale prices increased on average by 2.3% M-o-M.
September 2021 auto sales were again hampered by lack of retail inventory, closing out a dismal quarter. Industry analysts estimate that sales in September were off approximately 20% year over year and very similar to 2019.
Inventory shortages are being felt across the country and the situation is not expected to improve until Q1 2022 at the earliest. Covid outbreaks at facilities in the manufacturing chain are further hindering the progress of moving to a ‘normal’ production cadence. Consumer confidence seemed to waiver a bit as we the fourth wave of the pandemic crippled provinces like Alberta, but overall consumer confidence appears to be steady.
Canadians are still in a situation where there is increased disposable income and consumers are ready to spend on big purchases like home improvements and vehicles. What will Q4 of 2021 look like? Likely more of the same.
Price movements by segment were positive in September. Compact SUVs showed the most drastic increase at 13.3% ($2,370), followed by Mid Compacts at 11.7% ($1,336), Minivans at 5.3% ($862), Midsize vehicles at 3.7% ($565), and Midsize SUVs at 2.4% ($572). Fullsize Pickups showed the only decrease at -2.0% ($733).
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.