Continuing our partnership with DesRosiers Automotive Consultants (DAC), the UCDA once again reached out to Members to take the pulse of the industry in Ontario.
This time, we asked members to give their valuable input on their experience in the used vehicle market in 2024 and to look forward to 2025.
Approximately 400 of our members responded to the survey. The majority of respondents were independent used car dealers (72.8%), but a sizeable number of new franchised dealers (27.2%) also took the time to provide their feedback.
Most dealers felt that there had been no change in their ability to source used vehicles (44%), while others (41.7%) felt that supply issues had worsened. Only a small number of dealers (14.2%) felt that their ability to source used vehicles had improved.
Used car dealers in particular, 45.3%, noted that sourcing vehicles had become more difficult. By comparison, only 34.3% of new car dealers felt that way. New car dealers continue to source most of their used vehicles (70.4%) from consumers, while auctions continue to be the most important source of used vehicles (46.2%) for used car dealers.
While new and used car dealers source their used vehicles from different places, they appear to be targeting the same vehicles—and are experiencing the same difficulties in obtaining them.
Dealers appear to be experiencing the most difficulty acquiring used vehicles in the 1 to 7 year old range.
Interestingly, the responses from used car dealers closely mirrored these results with close to half (42.6%) reporting “some difficulty” and a quarter (25.7%) noting “extreme difficulty” sourcing ‘newer’ used vehicles (1 to 3 years old).
Like new car dealers, used car dealers appear to be facing the most difficulty securing ‘middle-of-life’ inventory with half of respondents (50%) reporting “some difficulty” and close to a third (31.1%) reporting “extreme difficulty” securing used vehicles in the 4 to 7 year old range.
Despite the difficulties in acquiring used vehicles, dealers remain optimistic. On average, dealers expected that they would sell more used vehicles in 2025 than they did in 2024. New car dealers expect to sell 426 used vehicles on average this year (up from 395 in 2024). Used car dealers are also looking to ‘up their numbers’ expecting to sell 182 vehicles, on average, this year (up from 150 in 2024).
The survey also provides some interesting data on how customers are paying for their vehicles. The majority of customers (69.9%) are approaching used car dealers with cash in hand, or funding from their own sources, whereas over half the customers of new car dealers (55.6%) are purchasing vehicles through loans arranged at the dealership.
Overall, customers continue to prefer to complete their deals entirely at the dealership (55.6%), with some (36.4%) contacting the dealership online first before closing the deal at the dealership. Only 8.0% complete entirely online.
The shift to electric is slow.
Approximately 33.3% of new car dealers report that a small portion (1 to 5%) of their used vehicle sales were Battery Electric Vehicles (BEVs). Used Plug-in Hybrid Vehicles (PHEVs) appear to be slightly more popular with customers of new car dealers with almost half of these dealers (45.5%) reporting that PHEVs account for between 1 to 5% of their sales and a handful (20.5%) reporting that they account for 6 to 10% of used vehicle sales. Some new car dealers (9.1%) even reported that PHEVs account for over 10% of their used vehicles sales!
Used electric vehicles appear to be a bit more popular among customers of used car dealers. Over a third of used car dealers (35.7%) reported that BEVs account for 1 to 5% of their used vehicle sales. A significant number of used car dealers (19.6%) reported that BEVs accounted for over 10% of their used vehicle sales.
By contrast, PHEVs accounted for over 10% of used vehicle sales for 12.2% of dealers. Overall, BEVs were more popular with used car dealers, whereas PHEVs were more popular with customers of new car dealers.