According to data from Canada’s largest automotive marketplace, 2021 closed with continued price growth for new and used vehicles in Canada amid stronger than ever consumer demand. In the final month of 2021, the average price of a used vehicle increased 34.5 per cent year-over-year to $33,240, the highest recorded price of a used vehicle to date. The average price of a new vehicle increased 12.7 per cent year-over-year to $50,758, for the first time surpassing $50,000.
Here are a few top takeaways from AutoTrader.ca's latest Price Index that reveals the car shopping and pricing trends that wrapped up the final quarter of 2021, a year marked by unprecedented change in the market and ending with record-high prices:
Pandemic allowed some Canadians to save more, drives up demand for car ownership
• The Bank of Canada estimates that Canadians saved an additional $100 billion during the pandemic.
• A variety of factors related to the pandemic including declining interest in public transportation had Canadians opting for vehicle ownership at the onset of the pandemic and this desire continued throughout 2021.
• AutoTrader.ca’s research suggests 63 [er cent of the respondents who were able to save during the pandemic, plan to use these extra savings to purchase a vehicle; 34 per cent of those who plan to buy a vehicle are planning to buy a more expensive vehicle than originally planned.
Canada’s affinity for larger vehicles grows despite rising prices
• Price increases across new and used vehicle segments rose more prominently in larger vehicles such as SUVs and trucks.
• A recent study by AutoTrader.ca found that 30 per cent of car shoppers intend to upsize to a larger vehicle from their current car. Among those who plan to upsize, nearly half (48 per cent) intend to upsize to a SUV, while a third (32 per cent) said they would pivot to a truck.
Microchip shortage impacts manufacturers across the globe
• Despite the manufacturer of origin, all used vehicles experienced a double-digit year-over-year increase in pricing, ranging from 24.6 per cent for European vehicles to 45.1 per cent for North American vehicles.
• For new cars, the increase in prices for domestic manufacturers is up 24 per cent, while prices for Asian and European manufacturers increased at a more subdued rate of 5.8 per cent and 6.3 per cent year-over-year.
Prices up across Canada with Alberta leading for priciest new vehicles
• Used vehicle prices experienced double-digit growth in all regions across Canada at the close of 2021. British Columbia recorded the lowest, yet still notable increase of 29.7 per cent year-over-year, while Ontario saw the highest growth nationally, as the average used vehicle price rose 35.9 per cent year-over-year.
• Prices also increased nationwide for new vehicles, ranging from 10.9 per cent in British Columbia to 15.4 per cent in Manitoba and Saskatchewan. The highest new vehicle prices belong to Alberta at $54,859, which could be attributed to higher than average interest in trucks that tend to skew higher than other segments.
This story has been updated to change the headline from used cars to new cars.