New, used trends as market braces for uncertainty

Used vehicle prices are up while new prices are trending downward as pre-tariff inventory thins out. A new report found that Canada’s auto market is feeling the ripple effects of trade tensions.

The latest AutoTrader Price Index showed that while demand remains strong, the landscape is shifting — and buyers are responding quickly.

In the second quarter of 2025, Canadian consumers rushed to purchase vehicles ahead of anticipated price hikes linked to tariffs. This “pull-forward” effect, as AutoTrader put it, has led to a surge in used car demand and a steady rise in prices.

By June, the average used vehicle price had reached $37,664 — a 3.6 per cent increase over the previous year. By comparison, new vehicle prices dipped 3.5 per cent year-over-year to $64,445, thanks in part to inventory buffers that helped soften the blow.

Despite a slight dip in demand compared to the first quarter, used car sales rose 1.8 per cent for the quarter and 2 per cent year-to-date. New car sales also remained strong overall, up 5.6 per cent year-to-date, though AutoTrader expects some softening in the months ahead.

Inventory levels are declining and some dealers have underestimated demand when placing 2025 orders. North American vehicle production is projected to fall by 6.1 per cent this year, adding further pressure, the report noted.

Used inventory remains tight, even with a modest boost from trade-ins and reduced exports to the U.S. The market is still grappling with the long tail of pandemic-era production slowdowns and a drop in lease returns — an estimated 1.5 million fewer vehicles were sold between 2020 and 2023, according to the report.

Body type, regional breakdown

Light trucks continue to dominate the market, with DesRosiers reporting more than 80 per cent of sales going to the segment.

A new SUV costs on average $58,439, down 5.4 per cent from last year, while used ones run $35,436, up almost 2 per cent year over year. A new pick up now costs 6 per cent more at $80,255 and used are up 10 per cent to $51,809 year over year. Minivans are also up 3 per cent on both the new ($69,005) and used ($34,875) side

New passenger cars are down 7 per cent to 61,589 and used are up 2 per cent to $35,682.

New vehicle prices fell across all regions, with the Atlantic region seeing the steepest drop at 5.6 per cent. It’s also where you’ll find the cheapest new cars, with the average price coming in at $59,834 — the only region under $60,000. Alberta has the most expensive new cars, costing on average $68,555.

Used vehicle prices, however, rose in nearly every region. The Atlantic region led the way with an 8.9 per cent increase to $35,899, followed by Quebec at 6.4 per cent. That province has the second-cheapest average used vehicle price at $35,746. Ontario was the only province to see any kind of decline in used vehicle prices, down 0.7 per cent, and has the cheapest used market with an average price of $36,663.

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