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August 16, 2024 by Adam Malik
Image credit: Depositphotos.com
Canadians saw a spike in automotive-related costs over the last few years, perhaps mostly in the used vehicle market. But those are starting to normalize — for the most part.
New vehicle supply shortages are mostly in the rearview mirror and the Bank of Canada has started to cut interest rates and that, according to DesRosiers Automotive Consultants, has dramatically changed the picture.
“To be sure, pockets of inflation persist,” it noted in a recent analysis, noting the 8.1 per cent increase in passenger vehicle insurance premiums in June 2024 compared to June 2023, calling it “a key source of price growth.”
Passenger vehicle parts and maintenance also saw an increase, going up 3.5 per cent. It further noted that maintenance and repair services alone are seeing a 4.2 per cent increase, while parts inflation saw 2.9 per cent growth.
But the ‘repair vs replace’ gap might be narrowing, at least when looking at used vehicles. In this area, purchase prices have gone in the opposite direction, down 4.5 per cent compared to June 2023.
New vehicle prices are still up 1.8 per cent as more people buy SUVs and zero-emission vehicles, which cost more.
“It is clear that the automotive market is seeing countervailing forces at play,” said DesRosiers’ managing partner Andrew King. “The new and used markets are heading in different directions as industry dynamics reshuffle the landscape and the market works toward a new equilibrium.”
Here’s how auto pricing has changed
From aftermarket parts to insurance, here’s how the auto industry has changed over the last yearImage credit: Depositphotos.com
Canadians saw a spike in automotive-related costs over the last few years, perhaps mostly in the used vehicle market. But those are starting to normalize — for the most part.
New vehicle supply shortages are mostly in the rearview mirror and the Bank of Canada has started to cut interest rates and that, according to DesRosiers Automotive Consultants, has dramatically changed the picture.
“To be sure, pockets of inflation persist,” it noted in a recent analysis, noting the 8.1 per cent increase in passenger vehicle insurance premiums in June 2024 compared to June 2023, calling it “a key source of price growth.”
Passenger vehicle parts and maintenance also saw an increase, going up 3.5 per cent. It further noted that maintenance and repair services alone are seeing a 4.2 per cent increase, while parts inflation saw 2.9 per cent growth.
But the ‘repair vs replace’ gap might be narrowing, at least when looking at used vehicles. In this area, purchase prices have gone in the opposite direction, down 4.5 per cent compared to June 2023.New vehicle prices are still up 1.8 per cent as more people buy SUVs and zero-emission vehicles, which cost more.
“It is clear that the automotive market is seeing countervailing forces at play,” said DesRosiers’ managing partner Andrew King. “The new and used markets are heading in different directions as industry dynamics reshuffle the landscape and the market works toward a new equilibrium.”
