Used cars are difficult to procure and cost much more if they can be found, says a lot of local independent cars.
Today, it’s a different world for independent used car dealers.
And, depending on who you ask, the trickle-down effect from problems that hinder the automotive industry is felt in a big way.
Brian Cox, owner of Troy toys in Victoria Road South, said:
“Currently, there are about 500 cars (vehicles, and dealers) across Ontario, perhaps even Canada, trying to buy from a Toronto auto auction.”
It’s also a changing world when it comes to how car dealers get their cars.
At first glance, the era of face-to-face auctions is over. Currently, dealers nationwide are bidding online.
Frank Lucchese, owner of York Auto Sales on York Street, said he would take one day a week to participate in a face-to-face auction in Kitchiner, Milton, or Brampton and spend the rest of his time in his parcel.
“Now I’m stabilizing my computer from morning till night,” he said.
The types of cars that can be auctioned also tend to be prominent: more pickup trucks.
“Everyone is throwing away their pickup trucks,” Cox said, attributed it to the price of gas.
They say there are also risk factors in buying a vehicle without looking directly at it.
“You take it home, open the door, and (you want) they smoke cigars (do not),” Cox said.
“They took a picture at an angle where they couldn’t see the dent, eventually bought it back and thought it was shining, but it wasn’t, I understand it was a dent,” Tony added. .. McDonald’s Assistant Manager and Buyer at Troy’s Toys.
“It adds cost and it drops little by little. Everything becomes more expensive.”
“I’m an old school,” Lucchese said. “I used to touch, feel, and smell the car. If you have a scratch, you’ll have to buff it or send it to the body shop, which costs $ 500. .. “Here (online auction), it’s hard to see (problem) with photos alone.”
Low inventory and delays in bringing new cars to market due to a global shortage of microchips — “I had to wait three months for a computer for Chrysler, it was backordered,” McDonald’s said — more. Buyers and more risks, and the average price of used cars, have reached dollar numbers that the people we talked to have never seen.
In Ontario, the average car price rose 37.4% between April 2021 and April this year, according to the latest data from the online car market AutoTrader.
That’s a surge of just over $ 10,000 per vehicle, averaging $ 38,013.
Nationally, this trend is about the same, up 38% year-on-year to an average of $ 37,768.
“One of my customers bought a brand new Electric Mustang. I think it was $ 60,000,” Lucchese said. She said, “It took six to eight months to wait for her car to come, and then they tried to sell her a year or two ago. It was the same price.”
“They said,’Okay, I can buy this used car, it’s $ 60,000. But if you want to wait 6-8 months, a new one, otherwise this will be available tomorrow, It’s the same price, “so the used car went up.”
When it comes to customer habits, Luckese feels that pandemics also play a big role in people who buy cars online rather than directly.
“Be careful that you don’t have much in stock, but there aren’t that many people around,” he said.
“They just look online and then they either raise it or they call you and say,” You ask for $ 30,000, can you take $ 25,000? ” Or you’re sending an email, not from person to person. “
“We are still alive,” McDonald added about Troy. “We sell a lot of products, a lot of customers, but you have to advertise a lot more.”
“Inventory is starting to become available,” said Gautam Sharma, owner of Royal City Fine Cars. “It’s mostly new car dealers who have a lot of problems. They have more problems than used car people.”
Rising interest rates are also attracting attention.
“The car business will slow dramatically as interest rates rise last month or so,” Cox said. “People need to raise money at 2% (or) 3%, so they can’t raise money again. (In some cases) it can reach 6, 7 or 8%.
“People who aren’t very creditworthy will be up to 30 percent.”
He added that it is a spillover that goes beyond the automotive industry.
“I just sold the Highlander Hybrid (model) in 2016. I sat here for a week,” he said. “I bought another one this morning. I already have customers because I had a lot of customers looking for the last one.”
“This is a guaranteed sale,” Cox added. “Everyone wants electricity.”
Parts can be electric and expensive, but McDonald’s said most of them are covered by a 10-year warranty from the dealer, including batteries.
“Electric vehicle parts are certainly falling,” he said.