What Canadians need to know about the used car market

What Canadians need to know about the used car market

Posted on May 20, 2022

The used car market has been experiencing tremendous growth since the onset of the pandemic. That makes now a great time to sell a car!

Prior to Covid-19 becoming a household term, the used car market did not get much attention, but a perfect storm of events has caused demand too far to outpace supply.

What is causing used car prices to skyrocket?

• Canadians who would trade in their current vehicle and purchase a new one have postponed this transaction due to the pandemic. No one was sure what was going to happen, so major decisions like buying a car were put on the backburner. This lack of trade-in vehicles is one of the reasons there is a limited supply of used cars in the market, but it is not the only reason.
• Buyers from around the world have entered the Canadian used car market. In the past, your used car would be purchased by a Canadian or perhaps end up in the U.S. or Mexico, thanks to NAFTA. There are buyers now from developing nations in Eastern Europe and Africa that are entering the middle class and want to buy a car. They cannot afford brand new vehicles but can afford to buy Canadian used cars and have the vehicle shipped via container to their home country. Websites like Copart allow buyers from abroad to purchase vehicles and ship them without having to leave the comfort of their home country.
• Easy access to cash is another under-reported reason why there is a shortage of used cars in the global market. Central banks lowered their prime interest rates to ultra-low levels to spur economic activity; people were able to borrow money at cheap rates and use that cash to buy massive inventories of used cars.

As you can see, the demand for used cars is a complex subject, but you do not need to be an expert to capitalize on this opportunity.

What you will need to do is follow some best practices, so you can get a fair price for your used car.

Where to list your used car for sale

While your first inclination may be to sell your used car on platforms like Facebook marketplace, do not list your used car there.

These marketplaces do not attract serious car buyers; most of the people who frequent these marketplaces are just looking for a bargain, nothing else.

Scammers tend to congregate on these social media platforms, so just do yourself a favor and avoid them.

The best place to sell your used car is through a local car dealership. The dealerships are always looking for new vehicles to add to their inventory.

To get the process going, you just need to drive your used car over to the dealership; they will conduct an appraisal to determine what the car is worth. Once the appraisal is over, you will receive an all-cash offer for the vehicle.

This happens in a matter of minutes; if you take the all-cash offer then you will be paid for the car right away; if you are looking for a safe and easy way to sell your vehicle, this is it.

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