February, in some ways, unfolded as anticipated, with improvements in both new and used inventory. However, those gains in inventory didn’t transfer over to other key metrics, highlighting that the road to a new normal will remain a winding one.
The CarGurus New Vehicle Availability Index for Canada increased 2.9% compared to January – even with those gains, though, it remained down 47.4% compared to last year. Used inventory had an even larger month-over-month increase, rising 5%, while the year-over-year figure was still down 12%. And though monthly gains in inventory are a welcome shift in trends, we didn’t see any relief in vehicle pricing in February.
The average new vehicle listing price in Canada rose 0.8% to Can$61.1k, and that figure is up 33.7% compared to the same period last year. Used prices accelerated with the average listing price rising 2.9% from January to Can$35.8k, which is up an eye-watering 48.9% compared to last year. Another data point that didn’t shift as expected with rising inventory was days-on-market.
The average days-on-market for new fell 0.2% in February to around 68 days, a decline of 26.2% year-over-year. Used average days-on-market saw an even larger decline of 4.3% compared to January to around 72 days and is similarly down 26.4% compared to last year.
While improving inventory levels are welcome, the combination of higher average prices and shrinking days-on-market shows that demand for private vehicles remains high. We’ll likely need to see a larger shift in vehicle inventory to begin the process of flattening out and then reducing vehicle prices.