Limited availability price adjustment for Car shopping

It's a volatile market out there right now (December 2021)...

Across the world, there are shortages because supplies have been disrupted. Our boxes shipped from Hong Kong took 3.5 months to reach us because of the lack of containers for shipping. And well, even most produces are made in Canada, yet, even moving things inland is not as easy as it used to. 

That applies to cars. In fact, those ones made in the US of A and from overseas are becoming scarce in the whole of Canada as disrupted supplies, for some spare parts or for whatever, are now putting pressure on the supply of first hand cars and extending to second hand ones.

Nowadays, car dealers have mostly empty garages as people compete to get any second hand cars around and even older cars are being snatched at (based on our experience of checking a few dealers in Calgary where most cars were sold or slapped with a deposit already). After comparing even some of the cars on Autotrader.ca and Kijiji.ca, some second hand cars are selling at prices close to their new equivalent (in terms of the manufacturer's suggested retail price, MRSP). 

A quick look on Autotrader.ca for used Kia Sorento's lowest trim (MSRP at CA$36k for 2021 and for the 2022 Sorento, it's a bit higher by $300):



So, we could not buy a second hand car yet and we had explored the factory builds where even some of the dealers are putting a CA$3000 premium + value package (extras that add tot he markup), aka "limited availability price adjustment":


That email above depicts the current seller's market where dealers can impose a markup on their limited stock, which is understandable, ie laws of supply vs demand. However, for us buyers, it's not great to pay extra when last year, before all this covid madness came, it would be cheaper. Granted we were not even in Canada back then...

We are not overpaying for a car and must wait. Even if we manage to find a car that is being sold at MRSP, the manufacturer itself has already increased the car price, due to covid. That Kia Hybrid 'build to sell' in the email, is at ~CA$39k and a few months ago, it was at ~CA$37k (based on checking reddit and other forums for prices). 

So, car shopping fail here. Given how expensive this is and even the financing is at ~2-3%, either we look at a smaller relatively new car or find an older car, and probably with better financing offers or keep saving up until the market becomes sane. 

Comments