Buyers on P.E.I. still leaning toward trucks despite spiking gas prices
‘People are being a little more flexible...because there's a lack of inventory’
Four out of five vehicles purchased on P.E.I. in March and April were trucks, SUVs or minivans, despite rapidly increasing gas prices.
The percentage of new vehicles bought on the Island during those two months that Statistics Canada considers trucks (a category that includes SUVs and minivans) was 80 per cent, compared to 20 per cent for all other types of vehicles.
That was virtually unchanged from the year before, when trucks made up 79 per cent of all buys. But the percentage this March and April was up 10 percentage points over the same months 2019, according to a recent report on vehicle sales from Statistics Canada.
The situation was much the same nationally.
Troy Leard, general sales manager of Centennial Nissan in Charlottetown, said the sales may not represent customer preference as much as they might in a regular year. Continuing supply chain issues mean there are not as many vehicles available when buyers go looking.
"It seems that people are being a little more flexible with their purchase decisions because there's a lack of inventory," said Leard.
"The demand is basically higher than supply in all product lines."
Everything that comes onto the lot is selling, said Leard. The sales figures don't necessarily represent what people want, though — just what they are able to buy.
So there may be people out there looking for a small sedan, but when they can't find one, they end up buying the SUV or pickup that is available. With today's technology, that SUV may also represent improved fuel efficiency over the buyer's previous vehicle.
"We've seen a lot of half-ton trucks being traded in for either four-cylinder SUVs [or] smaller cars, that type of thing," said Leard.
One thing people want that Leard can't get right now is electric vehicles. He said if he had 25 EVs on the lot right now, he could sell them all this month — but he has not been able to get any in all year.
Patience being advised
The move toward larger vehicles is part of a decade-long trend, said Werner Antweiler, an economics professor at the University of British Columbia.
"That trend is still present," said Antweiler. "They are considered safer, they have more space inside [and] more amenities."
They have also been relatively affordable in recent years given how low interest rates have been, he said.
Supply may be part of what is leaving relative sales figures unchanged, he said, but he also thinks some people may not be convinced fuel prices will stay high. Vehicle purchases are made for the long term, and a buyer who believes the price of gas will come down again may still opt for the larger vehicle.
If you are thinking about an electric or more fuel-efficient vehicle, Antweiler counselled patience.
"Buy the vehicle you want and not what is sitting on the lot, unless you really have to," he said. "This is an important signal to the manufacturers."
If people keep buying trucks and SUVs, manufacturers will keep producing them, he said. If consumers are willing to wait for a greener vehicle, he thinks manufacturers will eventually respond to that demand.