TORONTO -

The supply of used vehicles in Canada will likely see a slight dip, and the resulting impact to residual values is expected to be modest, as well.

That’s according to the November/December edition of the ALG Canada Industry Report, which dissected the movement in the nation’s residual values.

Overall  —  when considering used supply adjustments and macro-economic factors — the total edition-over-edition change in 48-month residual values for the November/December report, on average, was a decline of about 1.3 percentage points. ALG's Geoff Helby said in the report that “this is in line with the expected changes (depreciation and seasonality) of -1.0 percentage point.”

ALG also broke down the impact of macro-economic factors on residuals.

Starting with housing prices, these have fallen compared to where they were in the September/October edition. The resulting impact of 48-month residuals is 0.1 percent.

Despite wages climbing modestly from the prior edition, they had no impact on average residuals. And the exchange rate did not change for this edition.

Meanwhile, there was a 0.1-percent uptick in residuals from gas prices.

As perhaps expected, vehicle size appears to play a role in the gas-price impact.

“The adjustment in the gas price has impacted the larger segments more adversely, whereas the smaller segments are positively affected,” said Helby.

As a whole, he said:  “Overall macro impact for November/December compared to September/October is -0.1 percent.”

ALG then broken down used supply and its impact. The firm suggested the “minimally” decreasing used-car supply will affect residuals for most segments somewhere between -0.2 percentage points and 0.2 percentage points.

The segment whose residuals would be most positively impacted by used supply would be the full-size pickup (up 0.4 percentage points), with the microcar segment having the heaviest decrease (1.3 percentage points).