Used vs new cars: Which market is offering the better deal?

globalnews.ca:

Canadians shopping for a new vehicle this spring and summer might find a bit of relief from recent years of tight supply and high prices.

Experts say there are signs of “normality” on dealership lots after pandemic-era disruptions to automotive supply chains left some buyers waiting months for new vehicles or competing for scarce stock at high prices in the normally affordable used vehicle market.

However, those who spoke to Global News say inventories are not equal across models and automakers. While there are some cases where buyers could secure a discount, some vehicles are still facing fierce competition.

Here’s what to know if you’re searching for a new or used vehicle in 2024.

Supply chain issues such as a shortage of semiconductors, a critical input for modern vehicle manufacturing, snarled the production of new cars during the COVID-19 pandemic.

That short supply of cars sent shockwaves through the new and used car markets, as would-be buyers competed for the precious few cars available. That would send prices soaring on the high-demand models, and upset long-standing dynamics in the used and new vehicle markets.

“At points in the pandemic, you could drive off the lot with a new vehicle and turn around and sell it in the used market for sometimes more than you bought it for, which is … a wild thing to think about,” says Erik Johnson, senior economist at BMO Capital Markets.

Johnson tells Global News the automotive industry had to absorb a series of supply shocks over the past three and a half years, but the shortages and disruptions that stymied production have largely shown signs of resolving over the past year.

“I think we’re actually finally at a point now where we’re seeing supply levels, both in North