Buyers in the market for a new car are now facing several barriers as a result of the continued supply deficit of new and used vehicles for sale, including fewer selections, longer wait times, and higher pricing.
Toronto-based Veronica Negro said her recent experience purchasing a new vehicle to replace her used Honda Civic after a crash was a challenge.
She told CTV News that her insurance wasn’t able to match the price of her old car, not to mention the limited supply of cars actually available, which led to her having to water down her choices. In the end, she had to recruit her father’s help to find a new car.
“I kind of figured that it would be a bit of a challenge, but not to the extent that my dad is telling me he is waiting in lines for me,” she said.
“And by the time he gets to the front, the car is gone. It felt more like an auction than a car dealership.”
Sellers say they’re struggling to keep up with demand. In the used car lot at Toronto Auto Group, inventory is down to 550 vehicles, when the stock is usually supposed to be around 850.
“(There is) no supply whatsoever, and it is a problem,” said Neil Puri, the president and CEO of Toronto Auto Group.
WHAT IS CAUSING THE SHORTAGE?
Experts say that supply chain issues affecting many industries are to blame for the car shortage in Canada.
“Chip shortages (and) supply chain disruptions caused car manufacturers to produce fewer cars in the last couple of years,” Baris Akyurek, the director of analytics at AutoTrader.ca, told CTV News.
The shortage of new vehicles is driving up the average price of used vehicles as well. According to the AutoTrader Price Index Report, a new car costs on average $53,000, up 17 per cent from a year ago, while a used one now costs $37,000 on average, up a staggering 38 per cent.
A new survey for Rates.ca in April shows that over 40 per cent of Canadians have changed their plans to purchase a vehicle due to the shortage of new ones and the rising prices of used vehicles.
Those looking to purchase electric cars will also likely face hurdles.
Halifax-based electric vehicle salesperson Jeremie Bernardin said he’s noticed a recent explosion of interest in zero-emission vehicles, but that the wait times can be as long as three years, depending on the manufacturer and the dealership.
In March 2021, a report commissioned by Transport Canada found that more than half of Canadian dealerships had no electric vehicles in stock.
The report also found that wait times exceeded six months at 31 per cent of dealerships that had no zero-emission cars in their inventory.
With files from Tom Yun