Used vehicles keep getting more expensive

[Summitric]

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Used vehicles keep getting more expensive​

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April 22, 2022 by Adam Malik​

The price for a used vehicle continued to rise in March but the pace at which it’s increasing seems to have slowed.

Canadian Black Book released its monthly index for March recently. The index sits at a new record high of 165 — that means the index is 65 points above the baseline of 100 and used vehicles values are 65 per cent higher than the baseline set in January 2005.

The baseline sat just about even in the summer of 2020 and has skyrocketed since with a noticeable spike in the fall of 2021. Year-over-year the index is up 39.1% compared to 118.6 points in March of 2021.

“Although value retention growth is beginning to slow down, it is still increasing, and vehicles are worth substantially more than they ever have been,” said James Hancock, director of OEM strategy and analytics at Canadian Black Book. “What’s more impressive is that values today are 64.2% higher than the low point during the pandemic when the Index sat at 100.5points.”

For March 2022, the full-size van was the segment with the highest monthly increase at 8.72 per cent It has gained 81.11 per cent since March 2021. The full-size pickup segment saw the next highest monthly value gains of 2.34 per cent, while luxury cars were followed with 2.16 per cent growth.

However, 12 segments saw decreases. The full-size car segment dropped 4 per cent and compact vans fell 2.3 per cent, leading the way. Still, these segments are up overall year-over-year.

 

[Stompin Tom]

She is going to crash at some point, buyer beware, seller be excited.

 

[Summitric]

She is going to crash at some point, buyer beware, seller be excited.

same with current crazy home prices...

 

[Bnorth]

Yup wife is due for a new vehicle plus our 2nd kid arriving in the fall means we could use a bigger vehicle for her. Keep hoping the new volumes pickup and kick used values back down to where they were before we need to buy.

 

[tejay]

I’ve been using price alerts on autotrader and values for relatively (under two years with low mileage) new small trucks have gone up about 1000 month.Not happening , I will wait .

 

[Turblue]

She is going to crash at some point, buyer beware, seller be excited.

I see this getting worse…I bet it’s going to be a couple years till things settle and that’s if there’s no more Covid surges. It’s crazy.

 

[drew562]

same with current crazy home prices...

As of late. I have painted homes for five families in the last few months that are selling and not re-buying. One of them is living in a fifth wheel on his brothers driveway, others have moved to their little cabins and they lay in wait for a complete economic collapse. These homes were in Beaumont. One in Leduc. Two in Edmonton. And one West by jack fish lake. We cannot sustain living on free money forever and people are starting to see that

 

[Stompin Tom]

Interest rates going up, that will slow things down, slowly.

What a weird weird world we have been living in the past few years.

 

[Cyle]

As of late. I have painted homes for five families in the last few months that are selling and not re-buying. One of them is living in a fifth wheel on his brothers driveway, others have moved to their little cabins and they lay in wait for a complete economic collapse. These homes were in Beaumont. One in Leduc. Two in Edmonton. And one West by jack fish lake. We cannot sustain living on free money forever and people are starting to see that

Living in a trailer until prices fall, wow that's insane. It's not like they are going to drop tomorrow, it might be in a few months but it could be 6+ month easy. As long as people have pre-approvals at decent rates they will continue to buy. Even at 4% I think many will continue to buy the houses under $500k.

Also some people forget what selling/rebuying actually costs and it's not like it's toronto where prices have went totally stupid, they are up a good bit but nothing crazy.

A house that was $400k 2 years ago is maybe $440k now and that's really generous. The higher the price the less they've went up. Cost to sell that is going to be around $20k-$25k for realtor, breaking mortgage, and lawyer. Now let's say you move, wait and rebuy. You have 2 sets of moving costs to factor in. If prices drop back to what they were 2 years ago you'll be lucky to break even and have a high mortgage rate. Prices may drop a bit more so you might get that similar house for $380k. But it's still not worth it.

Unless it's rentals or downsizing it makes no sense to sell just with the plan to rebuy a similar house, unless you had another reason to do so like buying in a different location.

I sold 3/4 of my houses but it's because they were rentals and I have no plans to rebuy so it made sense especially with rising interest rates. The only house i'm not selling I paid $550k for in mid 2015, right now i'd probably get $575k for it, now since 2015 it did go down in value and at some point it was probably only worth about $530k so it does depend when someone bought. I bought brand new and landscaped, deck, and fence. Just to break even after money into it, realtor fees, and cmhc i'd need $600k.

 

[Stompin Tom]

Living in a trailer until prices fall, wow that's insane. It's not like they are going to drop tomorrow, it might be in a few months but it could be 6+ month easy. As long as people have pre-approvals at decent rates they will continue to buy. Even at 4% I think many will continue to buy the houses under $500k.

Also some people forget what selling/rebuying actually costs and it's not like it's toronto where prices have went totally stupid, they are up a good bit but nothing crazy.

A house that was $400k 2 years ago is maybe $440k now and that's really generous. The higher the price the less they've went up. Cost to sell that is going to be around $20k-$25k for realtor, breaking mortgage, and lawyer. Now let's say you move, wait and rebuy. You have 2 sets of moving costs to factor in. If prices drop back to what they were 2 years ago you'll be lucky to break even and have a high mortgage rate. Prices may drop a bit more so you might get that similar house for $380k. But it's still not worth it.

Unless it's rentals or downsizing it makes no sense to sell just with the plan to rebuy a similar house, unless you had another reason to do so like buying in a different location.

I sold 3/4 of my houses but it's because they were rentals and I have no plans to rebuy so it made sense especially with rising interest rates. The only house i'm not selling I paid $550k for in mid 2015, right now i'd probably get $575k for it, now since 2015 it did go down in value and at some point it was probably only worth about $530k so it does depend when someone bought. I bought brand new and landscaped, deck, and fence. Just to break even after money into it, realtor fees, and cmhc i'd need $600k.

come on out to BC. A house that sold for $400 grand 18 months ago is 550 to 600 grand now. That is pretty much the whole province outside of the lower mainland, down there is even higher. We have had a huge influx of people selling their homes in the lower mainland for crazy money, moving to the interior and banking a million plus. Great early retirement plan.

 

[lilduke]

You bragging or complaining?

Its a sellers market in BC right now forsure.

 

[Cyle]

come on out to BC. A house that sold for $400 grand 18 months ago is 550 to 600 grand now. That is pretty much the whole province outside of the lower mainland, down there is even higher. We have had a huge influx of people selling their homes in the lower mainland for crazy money, moving to the interior and banking a million plus. Great early retirement plan.

But that's not in the case in Alberta, and people here selling thinking the market is going to tank something insane and buy back cheaper are misguided. Although those kind of increases and going to slow or stop completely pretty quickly.

 

[Stompin Tom]

You bragging or complaining?

Its a sellers market in BC right now forsure.

Well, sure its great seeing equity build, but I really fear for the younger people who are buying homes in an unnaturally inflated market. There will be a down turn, interest rates are on the rise. I think in 12-18 month there are going to be a lot of homes on the market at a vastly reduced price.

 

[JayT]

Living in a trailer until prices fall, wow that's insane. It's not like they are going to drop tomorrow, it might be in a few months but it could be 6+ month easy. As long as people have pre-approvals at decent rates they will continue to buy. Even at 4% I think many will continue to buy the houses under $500k.

Also some people forget what selling/rebuying actually costs and it's not like it's toronto where prices have went totally stupid, they are up a good bit but nothing crazy.

A house that was $400k 2 years ago is maybe $440k now and that's really generous. The higher the price the less they've went up. Cost to sell that is going to be around $20k-$25k for realtor, breaking mortgage, and lawyer. Now let's say you move, wait and rebuy. You have 2 sets of moving costs to factor in. If prices drop back to what they were 2 years ago you'll be lucky to break even and have a high mortgage rate. Prices may drop a bit more so you might get that similar house for $380k. But it's still not worth it.

Unless it's rentals or downsizing it makes no sense to sell just with the plan to rebuy a similar house, unless you had another reason to do so like buying in a different location.

I sold 3/4 of my houses but it's because they were rentals and I have no plans to rebuy so it made sense especially with rising interest rates. The only house i'm not selling I paid $550k for in mid 2015, right now i'd probably get $575k for it, now since 2015 it did go down in value and at some point it was probably only worth about $530k so it does depend when someone bought. I bought brand new and landscaped, deck, and fence. Just to break even after money into it, realtor fees, and cmhc i'd need $600k.

I was considering listing my acreage in January. My realtor told me the price he would list it considering the market, but we decided to wait until mid March. We listed in mid-march for $50,000 above what we would have listed in January for and we had multiple offers some above list. Needless to say, house is sold. The market is nuts right now. Within a week we had over 3,000 views of our house between realtor.ca and The Brokerage website. That's more than my realtor has ever seen in his life.

 

[LUCKY 7]

a neighbor of mine is trying to buy a house on Okotoks and is having a hard time finding one. Everytime a new listing comes up that they are interested in the house is sold. They plan on living in their RV up there so they will have a better chance to on the spot when a house is listed. They listed their house yesterday and will have mutliple offers on it before this weekend ends. We sold my motherinlaws house last April in Cranbrook and if we would of waited one year we could of got 60 grand more for it.

 

[catalac]

This was a farm auction at castor I watched last week… nuts.

 

[Stompin Tom]

This was a farm auction at castor I watched last week… nuts.

View attachment 255846

That is a nice $11,000 pickup.

 

[Cyle]

I was considering listing my acreage in January. My realtor told me the price he would list it considering the market, but we decided to wait until mid March. We listed in mid-march for $50,000 above what we would have listed in January for and we had multiple offers some above list. Needless to say, house is sold. The market is nuts right now. Within a week we had over 3,000 views of our house between realtor.ca and The Brokerage website. That's more than my realtor has ever seen in his life.

They've really only went up since very recently. Looking at comparables from last fall prices were still flat. My duplex would have got about $320k last fall got $350k for it a few weeks ago. But I paid $300k for it 11 years ago and added garage, deck, fence, etc. So overall it still hasn't went up much for 11 years, it's only in the last few months.

The only one that surprised me was my acreage, ended up selling for 1 million and how many showings there was, I did not think that many could afford that price tag. But again I listed last fall and only some interest and mostly tire kickers, it was only the last bit where it went nuts. I lowered price and relisted it and had 4 offers within 3 days, 3 were asking price.

 

[Cyle]

I'd say $11k is a bit light, but $25k is absolutely stupid. That truck would have been like low 30's new.

 

[snoflake]

One thing that is not going to go down is the MSRP on vehicles. I'm guessing when this cycle slows down we will be back to being able to negotiate on new car or truck, but the stickers prices are here to stay and that's pretty scary.