“Americans definitely have an impact because they buy a lot of Canadian vehicles and ship them across the border,” says Barrie auto dealer

The used-vehicle business may already be tough, but add an ongoing nationwide shortage of vehicles and the past two years have been even tougher to manage.

Local dealerships are struggling to maintain inventory due to a vehicle shortage that those working in the industry say began around mid-2020.

“When COVID first hit everyone thought no one would buy and it was kind of the exact opposite. All of a sudden there was this huge shortage and customers wanted to buy but no stock,” said Christian Binus, sales manager at Bayfield Auto Sales on Bradford Street. BarrieToday. “Prices on the wholesale side are exploding.”

The reason for the shortage, he said, was due to a number of different factors.

“Any new car you wanted to buy requires a wait of three to six months or more depending on what you’re looking for,” Binus says. “Manufacturers also misjudged the market, thinking no one would buy, but in reality people weren’t traveling or spending money on entertainment. … They were buying new cars. They didn’t even need a new car, they just wanted something different in their driveway.

A shortage of parts, semiconductors and fewer used vehicle trade-ins were also a big factor, added Bobby Taylor, manager of the Smart Wheels Auto Center on Dunlop Street West near Tiffin Street.

Another major factor impacting dealerships in Canada, both Taylor and Binus noted, is that dealer auction trades are quickly snapped up by businesses south of the border.

“An article I read said used vehicle prices in the United States had gone up 40.5%…and now with 25% trade to the dollar, they’re paying retail at Canadian auctions and I can’t pay retail. If I pay retail, I won’t be in business long,” Taylor says. “Americans definitely have an impact because they buy a lot of Canadian vehicles and ship them across the border.

“They have 10 times as many people there,” Binus adds. “That’s a very big part of it, it’s the Americans drying up the inventory here.”

Taylor considers himself one of the “lucky ones”, however, noting that many smaller used car dealerships simply closed until things improved, the Dunlop Street West dealership managed to maintain its inventory at about 70% of what it had before the pandemic.

“I always receive vehicles. I still move a lot of vehicles because I still believe in aggressive vehicle pricing. If someone comes to my land, the vehicle will sell I’m just here to help facilitate a deal, that’s all,” he says. “As long as I set my prices where I’m more than competitive with the majority of other dealers, people will come.”

The lack of inventory across the country and the ability to showcase what they have online has also opened the door significantly for shoppers, Taylor acknowledges, noting that he’s flown shoppers from as far away as the United States. Alberta to purchase a particular vehicle.

“People will travel for a deal. They see a car they like and they drive a good distance…because there’s not a lot of choice if you’re looking for a particular vehicle,” he says.

Taylor says that while he is confident the shortage will eventually correct itself, it will take time.

“It’s not going to go away overnight. It will probably take a year to (18 months) before the market starts to correct,” he says.

Binus has worked in the industry for almost two decades and tells BarrieToday this is the first time that he has noticed such a significant shortage.

“There have been times when there have been shortages, but certainly nowhere near where they are now,” he says. “I’ve been doing this for 17 years and I’ve never seen anything like it. We normally have 40 cars in our inventory and right now we’re down to 16. We’re lucky I think… (because) some of the other dealers I’ve spoken to are even worse.

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