Vehicle market in flux over new car issues

Driving past the Regina Motor Products car lot at the southern edge of the city, one could be forgiven for wondering if the dealership had moved – the lot, normally thick with shiny new vehicles, has only a few dozen taking up the space.

Daniel Levis is a sales manager there. He said there aren’t a lot of vehicles coming in. Levis explained that all the new vehicles normally on the lots are still at the manufacturer waiting for microchips from factories overseas.

And when it comes to used cars, Levis said most of those come in from trade-ins for new vehicles.

“And when you don’t have the new cars to go out you don’t have the trades to come in,” said Levis.

Normally, Levis said, the lot has about 300 new vehicles and 150 used, but when he spoke there were only five new vehicles and about 50 used.

He explained the dealership is pre-selling inventory, both new and used, so even when they do get a shipment they’re gone quickly.

“We had five come in this morning and three are gone,” said Levis.

For Wheat Country Motors in Regina, it’s a different side of the same coin as it deals in used vehicles.

“You don’t have new vehicles to trade your vehicles on, so, creates a bit of a short side in the used vehicles as well,” explained Bob Ramsay, a sales manager at Wheat Country Motors.

Ramsay said inventory levels are low, but the lot there isn’t empty. He explained the dealership has a rental side but also goes to auctions so it can get inventory that way.

People looking to pick up a vehicle will be seeing higher prices these days.

The price increase depends on the vehicle – Ramsay said it’s not as high for SUVs and cars but the increase is at least 10 per cent for trucks in Saskatchewan.

“It’s supply and demand right, so, the less supply and the demand is strong, prices are generally going to increase, but that also works on the trade side as well,” said Ramsay.

That means that those trying to trade in their vehicle will get a higher price, too.

Vehicle auctions play a part in the demand side of used cars. Ramsay said there’s a strong U.S. market right now – American dealers are shelling out for Canadian used cars and then taking them back south of the border.

Part of the shortage comes from new cars not getting to the lots. Levis said inventory has been slow coming this month but it will increase in August and September. That won’t fix everything though.

“We figure this will stay like this for, gosh, another six months,” said Levis.