A record number of used-vehicle imports is undercutting prices, Scotiabank says. (CBC)

Used car prices will continue to weaken into the first and foremost half of 2009, the Bank of Nova Scotia forecast Wednesday.

The beam’s used car price index malignant seven per cent below its year-earlier level in the first quarter, led by some 11 per cent small quantity in prices for one-year-old models. It was “the weakest performance on record for data back to 1978,” the surround with a bank uttered in its Global Auto Report, released Wednesday.

“We expect used car prices to continue to soften through at the opening of day 2009, pressured by rising unemployment in both the United States and Canada,” Carlos Gomes, Scotiabank senior economist and auto industry specialist, said in a release. Vehicle sales in general are falling — into disrepute 11 per cent in March in North America from the year-earlier period, the report said — but the Canadian used-car market is facing several specific factors contributing to the weakness.

  • Imports of used cars from the U.S. are undercutting Canadian prices.
  • New car prices are falling, pushing down second-hand prices.
  • More than 550,000 car and light-truck leases will breathe out in Canada this year, roughly 50,000 more than in 2007.

When a lease expires, it the automaker takes the instrument back, it then has to resell it to a dealer or by auction sale. As more leases expire, “obviously, it increases the supply in the used emporium,” Gomes said.

During the first quarter, used vehicle imports climbed to a remembrance 64,082, matching the total notwithstanding all of 2004. The bank is estimating that imports will hit 200,000 for the full year.

CUV sales bucking the trend

The bank report said that while vehicle sales are falling and used-car prices are dropping, Canadians love crossover utility vehicles, or CUVs.

Sales rose nearly 30 per cent in the first quarter, compared through the first quarter of 2007, and CUVs now show 20 per cent of integral new vehicle sales in Canada, increase twofold their share in 2004.

The vehicles consider be proper for so popular that Ford is hiring an additional 500 workers at its plant in Oakville, Ont., to make the Ford Edge and Lincoln MKX CUVs, the rowing-beam before-mentioned.