As wholesale prices continue to decline, CBB’s weekly auto industry update points to the impending United States-Mexico-Canada Agreement (USMCA) adding more complexity to the Canadian used vehicle market. According to the report, a considerable amount of Canadian used vehicles are exported to the U.S. every year. In 2019, that amount was close to 300,000 units. This has been a key factor in the rise of wholesale prices as well as keeping residual values high. The new rules and tariffs under USMCA could contribute to a considerable softening of exported vehicles. Of special interest to fleet operators, a 25% tariff or “chicken tax” on pickup trucks and two-seat cargo vans could apply. The report suggests the wholesale prices will remain significantly lower than pre-Covid-19 projections through 2020.
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