ADESA Canada to Provide Used-Vehicle Price Index for Canadian Automotive Remarketing Industry
ADESA Canada announced the launch of the ADESA Canada Used-Vehicle Price Index, the first economic indicator to be developed specifically for the Canadian vehicle remarketing industry. The Index, which is based on used-vehicle sales figures of between 90-100 percent of the Canadian market, was developed by ADESA Canada in partnership with ALG Canada, an industry benchmark for residual values in North America.
The Index is calculated from millions of pieces of sales data from ADESA Canada’s live open bidding auctions with the addition of used-vehicle auction sales data purchased through the National Auto Auction Association (NAAA). The data is adjusted for a large number of variables, including type of vehicle, mileage, age, and season. A two-step statistical filtering process excludes extreme values in the raw data. The resulting Index provides a picture of the Canadian used-vehicle market and depicts the trend of used-vehicle prices in Canada.
The Canadian used-vehicle market is approximately two-and-a-half times larger than the new-vehicle market in both Canada and the U.S. In North America, approximately 45 million used vehicles are sold annually. In Canada, leasing comprises a significant percentage of total new vehicle sales – far larger than in the U.S. The large leasing volumes in Canada heighten the industry’s focus on residual and resale values. However, until now, an Index based exclusively on Canadian sales data from a statistically significant number of Canadian vehicle sales did not exist. According to ADESA Canada, the Used-Vehicle Price Index will enable the industry to better forecast residual and resale values and to better forecast the effect of new-vehicle sales incentives, exchange rate fluctuations, interest rate changes, changes in supply, and other variables on used-vehicle prices.