Used car prices on the rise, herald­ing broader re­cov­ery

The Guardian (Charlottetown) - - Business -

TORONTO — Used car prices are on the rise, herald­ing a broader re­cov­ery in de­mand for ve­hi­cles in both Canada and the United States, ac­cord­ing to a new re­port by Sco­tia Eco­nomics.

The re­port, re­leased Fri­day, found that used car prices bot­tomed in both Canada and the United States in early 2009.

Nor­mally, a re­bound in de­mand for used cars pre­cedes im­proved de­mand for new cars by three to six months.

“(This re­in­forces) our view that the out­look for new ve­hi­cles sales has im­proved sig­nif­i­cantly and that a sus­tained cycli­cal re­cov­ery is un­der­way,” wrote Car­los Gomes, au­thor of the bank’s monthly Global Auto Re­port.

Gomes found that used car prices in the U.S. hit a bot­tom in Novem­ber 2008, when they were 12.2 per cent lower than a year ear­lier.

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