A new survey of Ontario used auto dealerships shows the market is already under pressure with more pain likely to come.
The survey conducted by DesRosiers Automotive Consultants Inc. and the Used Car Dealers Association of Ontario found that almost a third of dealers saw prices decline between 11 and 20 per cent from March to April, while more than 15 per cent perceive prices down at least 21 per cent.
Of the roughly 1,300 dealers who responded, around 80 per cent expect total sales to decline at least 26 per cent this year and around 30 per cent expect sales to decline by more than half.
The immediate pressure on the market came after the province ordered dealerships closed as part of preventative measures around COVID-19, though as of last week they were allowed to fully reopen with some restrictions.
The effects of the pandemic however are expected to linger as people drive far less, creating less demand for new vehicles, while issues in the rental market, as been by Hertz Global Holdings Inc. filing for bankruptcy, threaten to increase the supply.
New vehicle sales have also taken a hit during the outbreak. DesRosiers said in early May that new vehicle sales fell an estimated 74.6 per cent in April for a record monthly fall, coming in at the lowest total for the month since 1951.