How pricing balance is coming back to used vehicles

While still high, prices for used vehicles trended downward over the last year.

AutoTrader reported that January 2025 prices for used vehicles hit $36,899, down 5.7 per cent year-over-year. That’s in comparison to new vehicle prices coming in at $65,317 that month, a drop of 2.9 per cent from the same time last year.

The used vehicle market in 2024 was a rollercoaster, influenced by a mix of factors, according to DesRosiers Automotive Consultants.

“A growing shortage of off-lease vehicles, improved new vehicle availability, declining interest rates and a falling Canadian dollar were just some of the factors shaping the market in 2024,” said Andrew King, managing partner at DesRosiers. “Overall, however, some balance in pricing is returning as the market stabilizes after a turbulent four years.”

A survey of Used Car Dealers Association members highlighted a stark contrast between independent used vehicle dealers and franchised new vehicle dealers.

Franchised dealers reported an average of 395 units sold, while independents averaged 150 units. Looking ahead to 2025, franchised dealers are optimistic, forecasting sales to rise to 426 units, with independents expecting an increase to 182 units.

Despite easing pressures in pricing and financing, the broader challenges facing the Canadian economy leave some uncertainty, DesRosiers reported.

Sourcing remains a significant concern. Among independent dealers, 45.3 per cent reported worsening sourcing conditions over the last six months, while 40.5 per cent saw no change. For franchised dealers, 51.4 per cent saw no change, but 34.3 per cent noted growing issues. Only 14.3 per cent of franchised dealers and 14.2 per cent of independents saw improvements in sourcing.

Dealers are split on their primary sources of vehicles. Franchised dealers sourced 70.4 per cent of their vehicles from consumers and 14.6 per cent from auctions. Independents leaned more on auctions, sourcing 46.2 per cent from there, 25.6 per cent from consumers, and 15.8 per cent from wholesale.

The market’s future remains uncertain, but dealers are hopeful for a more stable 2025, according to DesRosiers.

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