The imbalance in supply and demand for new vehicles caused massive price spikes. Buyers were often placed on waiting lists to purchase high-end models. This was especially true for EVs and luxury/sports vehicles. Here are some of the key reasons why vehicle prices could drop in 2023.įor the past couple of years, there has been a shortage in the number of new vehicles available. This shows that auto costs could be stabilizing and hopefully could steadily decrease over the coming year. In Canada, auto sales in January of this year were up 7.5 per cent compared to January 2022, and 2.3 per cent higher this April than last April, according to Mark Lines’ most recent auto sales volume report.Īlthough auto prices haven’t exactly dropped off a cliff, the cost of used vehicles dropped 1.9 per cent in February and rose 0.6 per cent in March, according to Statistics Canada. Over the past few months, the vehicle market seems to have stabilized, though. Unfortunately, this drove up the demand (and cost) for used vehicles as well. The cost of new vehicles skyrocketed due to several supply chain factors, inflation, and a chip shortage. If you’ve been holding off on buying a new or used vehicle, this year could be the time you’ve been waiting for. Inflation: monetary inflation can cause widespread price increasesĬonsumer and manufacturer incentives: government programs and tax credits that incentivize consumers to purchase vehicles and manufacturers to build certain types of vehicles.Shipping costs: the cost of shipping vehicles overseas can vary based on fuel costs, government tariffs, and hold-ups at international ports Supply chain: how easily auto manufacturers can source parts to build vehicles Supply and demand: the number of new vehicles available compared to the demand for them Some of the driving factors behind automotive prices include: The past few years have been marked by global political and economic uncertainty, which has caused significant price increases in everything from building materials to gaming systems and, of course, vehicles. manufacturers may source suspension components from China, and so on. For example, Japanese manufacturers may source chips from Taiwan, U.S. The majority of vehicles utilize parts that come from all around the world.

The price of new and used cars, as well as commercial vehicles such as trucks, tractors, and transport vans, can vary significantly, depending on a number of factors and economic conditions. THE DRIVING FACTORS BEHIND AUTOMOTIVE PRICES

Today, I’ll explain why vehicle prices might drop and outline some driving forces behind the current cost of vehicles in Canada. The good news is that the vehicle market seems to be finally stabilizing, which means that the cost of used and new vehicles could drop significantly in the coming months. If you’re like many would-be vehicle shoppers, you may be wondering when prices will finally drop.įor the past two years, the high cost of new and used vehicles has repelled many Canadians who may have otherwise considered trading their vehicle in or buying a new one.

New cars