The situation with the pandemic and the ongoing microchip shortage is creating intense pressure on the auto market, with dealers and consumers alike scrambling for vehicles on both sides of the Canada-U.S. border.
In fact, if the current trend continues, J.D. Power estimates that 25 percent of pickups, up to 15 percent of large, mainstream and premium SUVs, and 10-25 percent of mainstream small and midsize cars that were sold new here will eventually wind up in the U.S. as used vehicles.
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In most cases, the inventory is coming from traditional auctions, but J.D. Power says some Canadian dealerships are selling used cars directly to their American counterparts. These are often lower-mileage, better-equipped units in superior condition, leaving Canadian buyers with fewer attractive choices.
Want some stats? The number of vehicles being exported to the U.S. from Canada rose 4.3 percent to 309,505 units in 2020, according to Canadian Black Book data. During the first five months of 2021, 151,952 vehicles moved south of the border.
The stronger Canadian dollar hasn't slowed the movement of vehicles, either, a sign that U.S. dealers are desperate for inventory. Our currency is now worth $0.82 USD, up 3 cents from the start of 2021 and 9 cents from the same time last year.