Why Canadians are delaying car purchases
Used car prices have shot to record highs and wait times for new vehicles can now take months as chip shortages have slowed down production. All of that has Canadians rethinking their car buying plans, according to a new survey.
The latest BNN Bloomberg RATESDOTCA survey, conducted by Leger, found that four-in-10 Canadians said they have made changes to their purchasing plans, with 13 per cent saying they were delaying their purchase as a result of high prices. The online survey of 1,538 Canadians was conducted between April 8 and 10.
The price of cars has been an issue in Canada since last year. The COVID-19 pandemic has led to a trend of more Canadians opting to drive over taking public transit, which has increased demand and prices for vehicles. Supply chain shortages have also contributed to long wait times for new vehicles to be shipped to consumers.
The survey shows that Canadians are aware the current auto market requires making concessions. About 12 per cent of respondents said they changed or are expecting to change their choice of vehicle as a result of cost, while another nine per cent said they will change their choice because of availability. Another 25 per cent of respondents said they were planning to delay their purchase entirely due to cost or availability.
On the other hand, according to the survey, Canadian consumers are researching the vehicles they buy extensively before getting into the driver’s seat.
Two-thirds (68 per cent) of respondents said they factor in the cost of replacing and repairing a vehicle when they buy it, and how that impacts the insurance premium they pay on the car. The make and model of a vehicle can have a large impact on your monthly insurance costs — that’s because insurers look at how expensive a car will be to fix if it gets into a collision, as well as how often certain models tend to be involved in accidents. So, if your car is favoured by young people who love to speed, you’ll be paying higher insurance premiums.
Six-in-10 (61 per cent) respondents said that they consider a vehicle’s safety record or crash rating when they purchase a car, while half of respondents said they also consider the likelihood of accidents or theft.
While the majority of respondents were well informed about how the vehicle they buy impacts their car insurance rate, two-in-10 said they were not aware that factors like the cost of repairing a vehicle and its likelihood of getting stolen affected their insurance rate.