Why Are Used Vehicles with More Kilometres Selling So Well?

From Our Partners Orbit

Laurie Bauer, CAIB | Business Development Manager, Orbit Insurance Services

Why Are Used Vehicles with More Kilometres Selling So Well?

If you’re in the market for a new car or truck, you’ve likely seen how limited inventory is. This is largely due to a global shortage of semiconductors, which has caused a major slowdown for auto manufacturers. The demand for used cars is surging to record highs. With higher demand comes higher prices, and possibly higher odometer readings.

Used vehicles are selling with up to 354% more kilometres on them compared to 2020

According to a study, used vehicles are selling with more kilometres, for the same price as those sold in 2020. This trend was seen across all price categories of used vehicles.

Used cars valued under $5,000 are being listed with 40% more kilometres in 2022 than in 2020 (an average of 273,065 kilometres). High-end used vehicles valued over $45,000 saw the biggest shift, with an increase of 354% between 2020 and 2022 (an average of 16,962 kilometres).

The odometer only tells part of the story

While a vehicle’s odometer reading gives you a good indication of the amount of wear the vehicle’s endured over time, it doesn’t give you the full picture. There are other factors beyond the number of kilometres a vehicle has travelled that will affect its lifespan, such as proper maintenance.

When purchasing a pre-owned vehicle, ask for a mechanical inspection and CARFAX report. This will give you a better understanding of the overall condition, including brakes, engine, and transmission. This will help educate you on potential future repair and replacement costs.

The CARFAX report — offered for free by many dealerships — gives you important details about the vehicle’s history. This includes former ownership, province(s) in which it’s been registered and any reported collision damage.

The good news: A used vehicle might come with a lower insurance rate

Used vehicles generally cost less to repair or replace than new ones, especially those without the expensive technology of many of today’s vehicles. Lower costs to repair or replace a vehicle typically lead to lower claims costs and potentially lower insurance premiums. Ask your insurance broker for a quote before purchasing a used vehicle to understand how it fits into your budget.

Orbit Insurance Services provides ARTA Members with preferred rates and discounts on home and auto insurance. Our goal is to provide the right products at the right price with an exceptional service experience every step of the way.

If you’re getting ready to purchase a used (or new) vehicle, call Orbit at 877-976-7248 for a quote and to discuss your coverage options.