High prices, low supply: Calgarians can’t find cars that pass the test

Historically high prices and low supply are making the vehicle market exceedingly difficult for Calgarians looking to get some wheels.

The average cost of a new vehicle has now reached more than $60,000.

With that price tag over and above the budgets of many, the competition is heating up to secure a ride that won’t break the bank.

“With affordability a key issue for most consumers, they don’t have the ability to either find the right vehicle in the new car market or afford the right vehicle in the new car market so they’re reaching towards the used car supply channels to supplement that and that’s putting a lot of demand on used car supply and keeping those prices high,” explained Daniel Ross with Canadian Black Book.

Used vehicle prices are certainly the highest they have ever been — up over 50 per cent on average since June 2020.

Some people CityNews is speaking with say it’s made their search even more daunting.

“It’s almost criminal, the way the used market is right now — to be asking $25,000 for a car that has 150,000 clicks — I have no idea where that even comes from, and I guess it’s just the current market,” one woman said. “It’s just been really kind of stressful as well because I’m now having to look at cars that were outside my initial budget because everything else is not spending money on, and if I’m spending that much money I want to get something that is going to last, that’s reliable and all those things. It’s really time-consuming as well — that’s the other thing — my weekends are spent searching for cars

“It’s kind of frustrating how the economy isn’t helping us with the prices,” said another person. “Hopefully later when demand goes down and more vehicles come out on the road, hopefully the prices will fluctuate, which will make it easier for the budget.”

Experts are saying more Canadians are needing loans to buy used vehicles than ever before, and many people looking at buying new vehicles are using longer leases, nearly doubling the length than in years prior.

They also say it’s hard to predict when the market could get better, and it could be years before a correction is noted in new prices,

“Prices in my crystal ball will still be high two, three, four years out from this point,” explained Ross. “We’re necessarily not out of anything, we’re actually going to get a little worse on used supply as everything sits currently.”

He adds things will likely get worse before they get better.

“Ultimately, we’re going to get in a worse scenario than we currently are on used supply and that might stagnate the new car environment and that might bring on incentives to move that new supply because now consumers are looking there,” Ross said. “But that’s yet to be seen, that’s what I’m sort of thinking of, we’re sort of thinking of as industry experts and that might be a saving grace in a few years time.”