DEVELOPING Person on fire outside Trump's hush money trial rushed away on a stretcher
A person who was on fire in a park outside the New York courthouse where Donald Trump’s hush money trial is taking place has been rushed away on a stretcher.
If you’re like many would-be vehicle shoppers, you may be wondering when prices will finally drop.
For 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.
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.
Today, I’ll explain why vehicle prices might drop and outline some driving forces behind the current cost of vehicles in Canada.
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 majority of vehicles utilize parts that come from all around the world. For example, Japanese manufacturers may source chips from Taiwan, U.S. manufacturers may source suspension components from China, and so on.
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.
Some of the driving factors behind automotive prices include:
If you’ve been holding off on buying a new or used vehicle, this year could be the time you’ve been waiting for.
The cost of new vehicles skyrocketed due to several supply chain factors, inflation, and a chip shortage. Unfortunately, this drove up the demand (and cost) for used vehicles as well.
Over the past few months, the vehicle market seems to have stabilized, though. 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.
Although 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. This shows that auto costs could be stabilizing and hopefully could steadily decrease over the coming year.
Here are some of the key reasons why vehicle prices could drop in 2023.
For the past couple of years, there has been a shortage in the number of new vehicles available. This was especially true for EVs and luxury/sports vehicles. Buyers were often placed on waiting lists to purchase high-end models.
The imbalance in supply and demand for new vehicles caused massive price spikes.
This year, automotive inventories seem to be improving. Total inventory increased in Canada from 2.38 million in November 2022 to 2.57 million vehicles in March 2023, according to Statistics Canada. With reduced consumer competition for new vehicles, costs are finally normalizing, and waiting lists are shortening.
Throughout 2021 and 2022, the shortage of semiconductor chips squeezed the new vehicle market, resulting in higher demand and higher prices. Manufacturers had warehouses full of ready-to-deliver vehicles that lacked the vital chips needed to power onboard computers and electronics, rendering them all but undrivable.
Although there’s still an ongoing chip shortage, analysts at JP Morgan have indicated that supply is increasing, allowing auto manufacturers to potentially increase production worldwide.
The global automotive market relies on vehicles and parts being shipped overseas. Ships rely on diesel fuel to power their massive engines. In 2022, crude oil prices spiked from an average of US$68.17 to $94.53 per barrel, a 38.7 per cent increase.
As fuel costs increased, so did international shipping costs, which led to higher automotive costs across the board.
Currently, the average price sits at $73.81 per barrel as of May 23, 2023, a significant decrease from last year. This has made shipping and transportation more affordable for auto manufacturers and dealers alike, who rely on ground freight deliveries.
Auto prices are stabilizing, so it could be a good time to shop for a new vehicle. However, you should also remember that interest rates and inflation are still high, which could lead to an unfavourable auto loan.
If you plan on purchasing a new vehicle this year, look into trading in a vehicle with a high trade-in value or making a larger down payment to reduce your financing and interest costs.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
A person who was on fire in a park outside the New York courthouse where Donald Trump’s hush money trial is taking place has been rushed away on a stretcher.
Soulful gospel artist Mandisa, a Grammy-winning singer who got her start as a contestant on 'American Idol' in 2006, has died, according to a statement on her verified social media. She was 47.
The Senate legal affairs committee has rejected a motion calling for members to take a $50,000 field trip to the African Lion Safari in southern Ontario to see the zoo's elephant exhibit.
The Canadian Food Inspection Agency is encouraging veterinarians to keep an eye out for signs of avian influenza in dairy cattle following recent discoveries of cases of the disease in U.S. cow herds.
Scottish comedian Samantha Hannah was working on a comedy show about finding a husband when Toby Hunter came into her life. What happened next surprised them both.
Group of Seven foreign ministers warned of new sanctions against Iran on Friday for its drone and missile attack on Israel, and urged both sides to avoid an escalation of the conflict.
A Manitoba woman thought she found a miracle natural supplement, but said a hidden ingredient wreaked havoc on her health.
Hospital chaplain J.S. Park opens up about death, grief and hearing thousands of last words, and shares his advice for the living.
A family trip took a frightening turn for Christopher Won when he was diagnosed with flesh-eating disease while in Hong Kong and now, after weeks of treatment overseas, the Vancouver firefighter is back home recovering.
At 6'8" and 350 pounds, there is nothing typical about UBC offensive lineman Giovanni Manu, who was born in Tonga and went to high school in Pitt Meadows.
Kevin the cat has been reunited with his family after enduring a harrowing three-day ordeal while lost at Toronto Pearson International Airport earlier this week.
Molly Knight, a grade four student in Nova Scotia, noticed her school library did not have many books on female athletes, so she started her own book drive in hopes of changing that.
Almost 7,000 bars of pure gold were stolen from Pearson International Airport exactly one year ago during an elaborate heist, but so far only a tiny fraction of that stolen loot has been found.
When Les Robertson was walking home from the gym in North Vancouver's Lower Lonsdale neighbourhood three weeks ago, he did a double take. Standing near a burrow it had dug in a vacant lot near East 1st Street and St. Georges Avenue was a yellow-bellied marmot.
A moulting seal who was relocated after drawing daily crowds of onlookers in Greater Victoria has made a surprise return, after what officials described as an 'astonishing' six-day journey.
Just steps from Parliament Hill is a barber shop that for the last 100 years has catered to everyone from prime ministers to tourists.
A high score on a Foo Fighters pinball machine has Edmonton player Dave Formenti on a high.
A compound used to treat sour gas that's been linked to fertility issues in cattle has been found throughout groundwater in the Prairies, according to a new study.