After real estate flips, now comes the time for auto flips! Used car prices are skyrocketing and more and more owners are taking advantage of them!
You’ve heard it many times before, a new car loses about 30% of its value when it leaves the dealer’s lot. Well, forget that! Today your race car is a more lucrative investment than the stock market.
Photo agency QMI, Pascale Lévesque
Denis Leclerc. President of ALBI le Geant
“An SUV like the KIA Telluride coming out of the dealership will appreciate by 5% to 10%,” ALBI le Géant President Denis Leclerc gave me as an example. In a time of parts and vehicle shortages, the return to normality is not tomorrow. “Given the supply chain issues, we anticipate disruptions for another year or two. »
Forget about the depreciation of a new car! It is now increasing in value week by week. It also affects used vehicles. According to the specialist company Canadian Black Book, their value has increased by about 50% in the past year.
My experience
Allow me to share a personal experience. In winter 2020 I rented a new Sport Utility Vehicle (SUV). Without identifying the brand, it was a base model, one of the cheapest brands.
To my surprise, a year later I received an offer I couldn’t refuse. The dealer offered to buy my vehicle back for nearly $10,000 more than I paid for it!
In short, I estimate that I got a more than 20% return on the SUV when I subtract maintenance costs like oil and tire changes. And even by calculating the price of gasoline, I made a financial profit!
So I used this cash heist to lease a new vehicle with a down payment that allowed me to cut my monthly bill by 30%. It’s not nothing!
autoflip
I’m probably far from the only one who sniffed out the bargain. More and more buyers are reserving vehicles to make resale profits.
For example, new 2022 Hyundai Ioniq 5 or Ford F-150 models will show up on resale sites for $10,000-$20,000 above dealer price. And buyers seem quick to show up to get their hands on it.
If we are witnessing such overheating, it is because the shortage of new vehicles is reaching unprecedented heights.
“This is outrageous,” confirms the CEO of ALBI le Géant. Our Mazda dealer usually presents 150 cars in the showroom. We have 15 at the moment. »
speculation
Dealers are more careful than ever not to sell new cars to speculators who only hope for one thing: profit.
“We ask more questions,” confirmed Denis Leclerc.
Some buyers even come from the United States to buy cars and resell them at a high price to our southern neighbors, where the shortage is even greater than here. This new phenomenon is contributing to rising prices.
Between restrictions in China affecting a major auto parts exporter and supply chains tested by Russia’s invasion of Ukraine, the return to normal is not anytime soon.
No resale
The situation is so crazy that several manufacturers intend to ban the resale of their vehicles altogether.
Given the huge popularity of its electric F-150 Lightning and the small number of copies produced, Ford introduced a no-resale clause in the first year. An owner could therefore face a lawsuit if he sells his van on the used market.
Who would have thought one day that a new vehicle would turn out to be a better investment than an investment in the stock market? In our time, however, this is indeed the reality!
