SOURCE: Scotiabank

Scotiabank

October 31, 2014 08:00 ET

Canadian Used Car Prices Begin to Soften: Scotiabank Economics

TORONTO, ON--(Marketwired - October 31, 2014) - After several years of solid increases, used car prices have started to soften across North America, according to the Scotiabank Global Auto Report released today. The U.S. is leading the way lower, but prices in Canada also appear to have peaked and have started to edge down alongside a rising supply of vehicles coming off-lease.

"This comes on the heels of the lowest lease returns in more than a decade last year and represents a positive for an industry that has faced a shortage of pre-owned vehicles for some time," said Carlos Gomes, Senior Economist and Auto Industry Specialist at Scotiabank. "However, we expect the supply response and the price correction to be modest as off-lease volumes will remain well below pre-recession levels for an extended period."

Other highlights from the report include:

  • Global car sales re-gained momentum in September, with volumes advancing 3.5% last month, up from only a 1% increase in August. Developed markets led the improvement, with gains accelerating in both North America and Western Europe.
  • In Canada, passenger vehicle sales soared 13% above a year earlier in September, lifting purchases to an all-time record annual rate of 2 million units. This surpasses the previous peak set in July and guarantees that full-year 2014 sales will exceed 1.8 million units for the first time on record. Purchases accelerated across all regions, led by a 16% year-over-year surge in Ontario and a 15% gain in Alberta.

Read the full Scotiabank Global Auto Report online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 86,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $792 billion (as at July 31, 2014), Scotiabank trades on the Toronto (TSX: BNS) and New York (NYSE: BNS) Exchanges. Scotiabank distributes the Bank's media releases using Marketwired. For more information please visit scotiabank.com.

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