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 October 2020. The index decreased after being adjusted for seasonality. Wholesale prices decreased on average by 1.1% M-o-M.
Canadian October auto sales presented a modest decline – down 2.5% year over year, which when coupled with the summer and early fall months, is an impressive fiscal recovery. The 2020 calendar year continues to reflect the overall industry closure in the early spring – where we see an industry off approximately 23% vs 2019. As we enter the final two months of the year, a few issues will make for a tough close to the 2020 sales year. OEM’s and dealerships are low in MY20 vehicles, Canada has entered the second wave of Covid-19 and the all levels of government are working to provide support to Canadians and how to manage the second wave of the pandemic. Low inventory could mean less enticing incentives to draw in consumers to close the 2020 year end and with the second wave affecting Ontario and Quebec, our two most populous provinces; we could see a setback on consumer confidence. ALG is forecasting that the Canadian Auto industry will close 2020 with ~1.5MM units in new vehicle sales.
Price movements by segment were mostly negative in October. Midsize vehicles showed the most drastic decrease at -8.2% ($892), followed by Mid Compacts at -7.3% ($654), Minivans at -7.1% ($802), Midsize SUVs at -6.0% ($1,008), and Fullsize Pickups at -4.6% ($1,394). Compact SUVs showed the only increase at 1.4% ($207).
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.