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.

May 2020

The ADESA Canada Used Vehicle Price Index has been updated through May 2020. The index increased after being adjusted for seasonality. Wholesale prices increased on average by 5.3% M-o-M.

In May, dealerships in Quebec, Ontario, Alberta & BC began to slowly reopen under very strict healthy and safety guidelines – these four provinces alone make up over 85% of the new vehicle sales in Canada. Canadian new vehicle sales in May fell an estimated 44% when compared to May 2019. May was the second full month of restrictions that Canadians are adhering to as we struggle to understand what our new ‘normal’ will be. Each province is working to re-open, but refusing to be rushed because it seems that a second wave of Covid-19 is all but guaranteed.

Industry analysts have estimated that 113,224 light vehicles were sold in Canada last month, an increase from the 45,833 units sold in April. Perhaps this is a sign that Canadians are cautiously optimistic, understanding that this is nothing like the financial crisis of 2008, but rather the result of a collective effort of social / physical distancing to manage a pandemic that most of us have never seen.

Springtime optimism is welcome in an industry that is one the first to struggle during times of uncertainty, and it will require rigorous efforts from dealers, OEM’s and government to see some semblance of a recovery in 2020. ALG estimates that new vehicle sales will be off approximately 20-35% in 2020.

Price movements by segment were positive in May. Mid Compact vehicles showed the most drastic increase at 10.9% ($808), followed by Midsize SUVs at 10.4% ($1,577), Minivans at 6.6% ($645), Midsize vehicles at 4.9% ($472), Fullsize Pickups at 4.7% ($1,127), and Compact SUVs at 3.8% ($460).

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.

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