TORONTO, April 30 (UPI) -- Times will be tough for used car dealers in North America, with car prices predicted to fall through this year and into next, an industry report indicates.
Scotia Economics' latest Global Auto Reports says used car prices are likely to continue a decline that began in 2006 and picked up momentum this year. The Toronto firm, a subsidiary of Scotiabank, said Wednesday its Used Car Price Index -- which tracks prices in Canada's used-vehicle market -- dropped 7 percent in the first quarter of this year.
"Used car prices have been declining across North America since late 2006, but the weakness accelerated in early 2008 alongside deteriorating economic conditions -- especially in the United States," said Carlos Gomes, a senior economist with Scotiabank. "We expect used-car prices to continue to soften through early 2009, pressured by rising unemployment in both the United States and Canada."
Gomes said the origin of the current weakness began in Canada and was triggered by rising imports of used cars from the United States. That, in turn, undercut pricing for all North American previously owned vehicles, including those in the United States.
