Did you know that, in 2023, pre-owned vehicles are starting to show a significant increase in their odometers on average than cars from 2020 and earlier? Amid the global vehicle shortage, kilometers on used vehicle listings are higher than ever before.
In short, pre-owned vehicles, or “used vehicles,” are starting to see a significant spike in their odometers when compared with used vehicles from 2020 and earlier. Higher-end vehicles, i.e. vehicles costing more than $45,000, are seeing a 300% spike in their kilometers over the last two years.
However, Excalibur’s here to tell you that a car’s odometer reading is just one part of its story. It’s sort of like the old saying “don’t judge a book by its cover!” But, instead, we’re looking at how not to judge a vehicle by its odometer reading. While odometer reading used to be a big indicator of how much a car was used and probably how good its condition was, cars nowadays are built much better than they were back “in the day.”
The production of vehicles has slowed, leaving buyers little choice
Cars were in far higher demand in 2019, but as 2023 begins, the number of cars purchased in Canada has been reduced by 5-7 million. And by the way, this is despite the demand for new cars – because prices have reached a record high to keep in pace with the low supply and high demand. Production of new vehicles has slowed, and there’s a lot of reasons for that.
Funny enough, it’s not actually the production of your average “car parts,” like your engines, your doors, windshields, etc. – it’s the tiny microprocessors inside of cars nowadays that control everything inside the vehicle from cabin temperature to traction control. Some higher-end vehicles can contain hundreds of these tiny chips, but because of COVID-19 and travel restrictions, the demand for vehicles has plummeted – and so has the production of these chips.
This is rather interesting news since, a few decades ago, only the most high-end cars would have contained these chips. But even your lowest tech cars that cost around $14,000 contain these chips. With the low supply and high demand, many people have very little choice but to go with used cars – and those used cars are selling with more kilometers on them now than two years ago.
Used cars have more kilometers on them now, but the odometer reading isn’t everything
Used cars in 2023 are being listed with far more kilometers on them than three years ago with roughly the same price range. For used vehicles listed in the most affordable category that are priced just below $5,000, there’s roughly a 40% increase in their odometer readings (on average) from between 2020 to 2022. Higher-end vehicles are no exception to this change and may actually be seeing even higher increases in their odometer readings. The supply shortage is, in part, responsible for this.
Many people shirk away when they see a higher odometer reading on a used vehicle. But with newer cars no longer being as much of an option, people are starting to turn their sights to older vehicles.
But remember – cars nowadays retain their value for much longer. The number of kilometers on a vehicle can help to estimate the potential wear and tear that has been sustained over time (with fewer kilometers being better) but that’s not always the whole story.
Cars today, even cars with 100,000km on them, still have a lot of life left. For a pre-owned vehicle, or any vehicle (for that matter), it’s the wear-and-tear that’s the biggest issue – but an odometer reading isn’t as significant anymore. Proper maintenance can seriously prolong a vehicle’s lifespan. So, if you’re in the market for a used car, you can do more than simply look at the car’s odometer reading.
Get a proper mechanical inspection, for one. It could cost you a little more, but these simple steps will ensure you’re getting a good deal. Many dealers offer free CARFAX Reports to show buyers what the vehicle’s history is, such as its former ownership, what provinces it was registered in, and any collision damage that was reported. Professional inspections can also assess the vehicle’s condition based on its transmission, engine, and brakes.
Does my odometer reading affect my insurance costs?
Technically your car’s existing odometer reading may not factor into your insurance rates but how much you drive per year will. The more you’re on the road and the further you drive, the more your insurance is likely to cost you. This is just due to statistics suggesting that being on the road more means you’re more likely to get into a collision.
But what about purchasing a used car? Used cars can save you money on your insurance!
Nowadays, it may cost you a little more upfront to buy a used car than you would have paid a few years ago. Unfortunately that’s the reality of today’s market and we’ll have to wait a few years before things start to settle back down to normal. It technically varies based on the individual car how much you’ll pay for your insurance but it also boils down to the claims cost (such as replacement costs, potential repairs, and injuries) as well as the optional insurance coverage you buy.
Vehicles with a slighter propensity for claims tend to have lower insurance payouts and therefore cheaper premiums. Because used vehicles are older, they don’t have the same level of tech as a newer vehicle and replacement costs are therefore lower. Some older vehicles – 10 years and older – may not need additional comprehensive and collision coverage, because there’s a certain threshold where these vehicles just aren’t worth the money they would take to repair. Dropping these optional coverages can also save you money on your insurance.
Ultimately, your best bet for saving money is to consult with an Excalibur Defender. If you’ve recently purchased a used car (after doing your necessary inspections!) come to us to get the best insurance rates on your new (used) vehicle!