Starting in the third quarter of last year, used car demand softened slightly on a year-over-year basis. This trend, coupled with increased used car supply, resulting from strong new car sales and subsequent trade-ins, as well as a pivot in demand to new cars due to a ramp up in production and availability, has brought about declining used car prices.

On the flipside, new car prices show stability since the beginning of the second quarter of this year. Based on internal transactional sales data*, automotive manufacturers have resurrected incentives, through more competitive interest rates, making new cars more affordable despite stable prices.

In June 2024, the average used car price dipped 1.1% to $36,342 compared to the previous month, marking an 8.3% year-over-year decline. New car prices averaged $66,807, a 0.8% increase from the same period last year. Additionally, new car interest rates from the lending arm of automotive manufacturers, (i.e., subvented loans), have dropped from 6.2% in November 2023 to 5.3% in June 2024, making new cars even more accessible for Canadian shoppers.

Looking ahead to July, we expect used car prices to continue to normalize and new car prices to remain at around the levels from the previous year. We believe vehicle prices for both new and used cars likely peaked in 2023, at least in the short term, however, a return to pre-pandemic prices is not anticipated any time soon.

Click here to get your copy of our latest GoTrader Price Index.

TORONTO, ON – July 3, 2024 – gotrader.ca, Canada’s largest and most trusted automotive marketplace, today announced the launch of Storefront, a first-of-its-kind new car shopping experience, equally, a fresh tactic for automotive manufacturers and their dealership network to promote their complete new vehicle lineup to the millions of Canadian consumers that frequent the marketplace every month.

Through our GoTrader Carology Bitesize video series we host industry experts to discuss the latest news and trends in Canadian automotive. In this episode we’re joined by Baris Akyurek, Director of Marketing Intelligence at gotrader.ca, to get a view of the latest GoTrader Price Index, detailing the vehicle pricing trends from December 2022. Baris gives us a look into vehicle pricing dynamics from last year, price trend outlooks for 2023, and a glimpse into a drop in the average prices of certain Tesla models.

Car shoppers follow a path throughout their buying journey, but consumer research shows that, alike most aspects of modern society, over time, this purchase journey evolves, looking distinctly different from the one that’s traditionally been taken. By keeping these pivots in trends to vehicle purchase behaviours top of mind, you can tailor your strategy to reach more consumers while they shop and provide an experience that better aligns to their expectation set.

AutoTrader’s most recent Vehicle Path to Purchase study uncovered that the top triggers for purchase consideration are a vehicle that’s getting too old or a desire to upgrade to something newer or nicer. Results also suggested consumers are open to holding on to their current vehicles slightly longer. Those who say they purchased because their previous car is getting too old, has declined as a used vehicle purchase trigger, while fewer are buying a new vehicle because they want to upgrade.

Dealers that effectively merchandise their vehicles have proven to drive stronger engagement with their listings on gotrader.ca. Data shows a 185% increase to inbound leads for properly merchandised listings.

Our new video series, GoTrader Carology Masterclass, covers the fundamentals of vehicle merchandising to create an optimized vehicle listing. Watch the full video below and download our complete guide to effective vehicle merchandising to ensure you have the information handy when placing your listings!

If you’ve attended one of our popular Carology events in the past, you’ll know they are focused on sharing the latest trends and insights from experts in Canadian automotive. With this all-new video series, we are delivering the same great insights shared at our larger scale GoTrader Carology events, however, at a more regular cadence and in a more digestible format, to better align to the busy schedule of Canadian car dealers. Our primary focus is to provide you with updates on key aspects of Canadian automotive to ensure you are in the know.

In this episode we’re joined by Baris Akyurek, Director of Marketing Intelligence at gotrader.ca. Baris provides an update on the GoTrader Price Index, shedding light on the latest vehicle pricing trends from the report.

Whether you’re selling a new or pre-owned car, it’s vital that you put your dedication and focus towards optimizing each and every one of your inventory listings. A quality listing provides car shoppers all the information they need, from their initial interaction with your Vehicle Detail Page (VDP), and acts as a catalyst to building trust, ultimately enticing a consumer visit to your showroom to find the vehicle they’re interested in purchasing – exactly as advertised.

Your online listings are often the first touchpoint between car shoppers and your dealership, when consumers are most impressionable and inclined to shortlist vehicles as well as dealers of interest. As such, it’s important you invest ample time and resources into certifying that you’re making a great first impression. To aid you in singling out the crucial aspects of this often-slighted process, we’ve compiled easy-to-follow best practice guidelines, detailing what you should keep top of mind when it comes to online merchandising. Following the aspects outlined in this guide enhance your presence on the marketplace and attract the most serious car shoppers to your inventory listings over your rivals, ultimately helping you sell more cars more profitably.

Our latest GoTrader Price Index shows a gradual increase in used and new car prices continuing into the second quarter of 2022. Production gaps fueling new vehicle inventory shortages continue to drive demand for used vehicles, resulting in a sustained price crunch. In July, the average price of used vehicles hit $37,928, representing an increase of 32% year-over-year (YoY). On the new car side, average price reached the $55,469 mark, increasing 18% YoY.

For a fulsome view of our latest GoTrader Price Index, click here to get your copy of the report.

Despite challenges stemming from the global microchip shortage, silver linings may be found by dealers who can influence car shoppers not to look elsewhere in the face of extended wait times

As the global microchip shortage continues to delay the production of new vehicles, gotrader.ca recently deployed a national survey of Canadian car shoppers to get a full picture of the importance of new vehicle delivery timeframes.  The survey set out to gauge just how long consumers are willing to wait for that perfect car, and if they are now more open to the influence of advertising for another automotive brand or model if the vehicle they want is out of stock or delayed.

According to the survey, conducted online in August of this year among 453 adult Canadians who had indicated they were open to purchasing a new car within the next 12 months, vehicle availability and delivery time is, as expected, very important to overall purchase intent.

Key findings indicate that two out of three Canadian car shoppers believe vehicle delivery timeframe and availability is either “important” or “very important” when it comes to their overall purchase decision. Only a small percentage – five percent – of respondents said it wasn’t important at all.

However, while consumers are willing to extend wait times to get into their preferred vehicle, many indicate they would consider switching manufacturer or model preference if they find the duration between purchase and delivery to be too long.

Car Shoppers Expect to be Driving Sooner Than Later

A full 80 per cent of respondents to the study said they would generally expect to be behind the wheel of their new car within one month of purchase. Only 20 per cent of respondents said they would typically expect to wait more than a month to get the keys to their new vehicle.

With the realities of today’s supply-chain challenged market, these consumer expectations are being tested and dealerships are being challenged to meet them.

As indications across the industry show new car buyers waiting anywhere from a few weeks to six months or more to have their vehicle delivered, it might not be surprising that some car shoppers would consider revisiting their preferences or even forsaking their brand loyalty in favor of getting the keys sooner.

Of car shoppers surveyed, 16 per cent of respondents said they would consider switching to another vehicle if their first choice wasn’t immediately available, even when the alternative might actually be their second or third choice.

Top Preferences Hold

According to the gotrader.ca survey, 42 per cent of shoppers would wait until a later date to buy their most preferred vehicle if it was out of stock or its delivery was known to be significantly postponed. At the same time, 22 per cent of respondents, faced with not being able to immediately get their preferred vehicle, would hold off on buying any new vehicle, opting to wait until the overall new car market had more available inventory.

This indicates that 64 per cent of car shoppers would rather wait at least some time for inventory to become available rather than compromise on their preferred vehicle.

Underscoring how committed some Canadian car shoppers are to the primary car brand and model they have in their sights, 18 per cent would consider buying a used model of their top car choice and get it right away versus switch models or cross shop competing manufacturers.

How Long Will Car Shoppers Wait?

Among car shoppers who would be willing to wait to buy their preferred model if it wasn’t immediately available, 43 per cent said they would be willing to wait less than three months, nearly one in three (31 per cent) said they would be willing to wait between four to six months and one quarter (25 per cent) said they would be willing to wait more than six months to get into the right vehicle. That means that more than half (56 per cent) of loyal car shoppers would be willing to wait anywhere from four months to more than a year to get their vehicle of choice.

Right Time for Targeted Marketing

Having a clear understanding of these prospective customer segments can set up some interesting opportunities for a variety of marketing efforts by dealers. This may include developing ways to gauge – and potentially influence – a prospect’s shift in purchase intent while they wait for their preferred vehicle to become available or, in contrast, reinforce that decision for when the vehicle does eventually become available.

To this end, more than half (52 percent) of ‘brand loyalists’ who indicated they would be willing to hold on for their preferred vehicle, said they would still be open to switching car brands or models while they wait.  Further, one in four (24 per cent), said they may be open to advertising that proposes considerations from an alternative auto manufacturer. This 24 percent could even be an under representation given consumers typically under estimate the influence advertising overall.

Maintain Dialogue With Loyal Customers

Despite challenges facing the new car market, a delayed vehicle delivery can be viewed as an opportunity for car dealerships. Establishing and nurturing an ongoing dialogue with motivated car buyers, who are generally inclined to be loyal, is key as they could potentially be lost to another dealership or brand if the line of communication is broken.

In fact, even after a deal has been signed, maintaining ongoing communication with the customer gives dealerships a pulse as to whether or not the buyer may be getting agitated with their wait and if long-term brand loyalty could be tested. Knowing the mindset of the customer puts the dealership in a much better position to proactively take steps to maintain customer satisfaction and loyalty. Of course, speed of response and flexibility are paramount.

While there are some cautionary notes that can be drawn from the study, the clear upside is that dealers should feel confident that a strong, proactive marketing and communications plan that directly addresses the delivery challenges created by the global microchip shortage, while offering outstanding customer service to intending car buyers, can be a winning strategy – particularly if it includes the following elements:

1. Don’t let up on your advertising. Keep your ad dollars working for you, so you can act on opportunities to move prospective customers into an alternate nameplate, (particularly the case with network dealerships), into another model, or even used inventory.
2. Ramp up your customer service, with a focus on flexibility. Nothing will give you more of a competitive edge than demonstrating a willingness to adapt your processes to keep the customer content and informed during the current supply chain crunch. A customer service program built and focused on keeping the customer happy while they await delivery is a surefire loyalty builder.
3. Activate a strategic communications plan that extends from the moment a purchase contract is signed to when the keys are handed over. Open and transparent dialogue can be the difference maker in identifying signals that a customer is getting concerned or agitated. The ability to respond quickly and meaningfully is key to keeping the sale.