ADESA Canada Price Index
ADESA Canada is the largest provider of wholesale used vehicle auctions in Canada. The Index is calculated from millions of pieces of sales data from ADESA Canada’s live open bidding auctions.
The ADESA Canada Used Vehicle Price Index has been updated through April 2021. The index increased after being adjusted for seasonality. Wholesale prices increased on average by 3.2% M-o-M.
April 2021 had nowhere to go but up. By all accounts, April 2021 was a resounding success if you compare year over year, but perhaps a better gauge is April 2019. In that case, the auto industry was off ~10% in April 2021 vs April 2019, which all things considered is quite a feat. The industry is still contending with a micro chip shortage that will not be likely to see resolution until later in 2021 and Canada is still in the midst of the Covid 19 pandemic with some of the most populous provinces being virtually, if not completely, shut down except in the case of essential services.
Spring brings positivity and as we head into the summer, we are seeing consumer confidence steadily improving, approximately 1/3 of Canadians have received their first vaccines and with limited ability to travel consumers are spending money on their homes and vehicles. Cautious optimism hopes that May continues to be one of the strongest selling months of the year but overall, we are not likely to see sales back to pre-pandemic levels.
Price movements by segment were mostly positive in April. Fullsize Pickups showed the most drastic increase at 7.8% ($2,833), followed by Compact SUVs at 5.5% ($887), Midsize SUVs at 2.5% ($542), Midsize vehicles at .7% ($91), and Minivans at .3% ($40). Mid Compact vehicles showed the only decrease at -1.6% ($176).
How ADESA calculates the UVPI
ADESA Canada is the largest provider of wholesale used vehicle auctions in Canada. The Index is calculated from millions of pieces of sales data from ADESA Canada’s live open bidding auctions with the addition of used vehicle auction sales data purchased through the National Auto Auction Association [NAAA]. The data is adjusted for a large number of variables, including type of vehicle, mileage, age and season. A two-step statistical filtering process excludes extreme values in the raw data. The resulting Index provides a picture of the Canadian used vehicle market and depicts the trend of used vehicle prices in Canada.
ADESA Canada notes that the index provides insight into the economy as a whole and consumer spending patterns. It also points to the direction of the used vehicle market and, by implication, of the new vehicle market, as there is a complex relationship between the prices of used and new vehicles which is reflected in the adage ‘Today’s new vehicle is tomorrow’s used vehicle’. Typically, used vehicle prices respond to many macro variables, such as the health of the overall economy, financing available to new versus used vehicles; the volume of vehicles in the pipeline, the age of vehicles on the road, the U.S. dollar exchange rate, incentives and the number of vehicles coming off lease.