The Canadian used vehicle market is gaining momentum, according to AutoTrader.ca. That statement is specifically based on its Price Index Q2 2025 report, which covers only the second quarter of the year. They said prices climbed 3.6% year-over-year to reach an average of $37,664 during that period.
The company also said inventory has tightened and consumer demand has accelerated. They described the “urgency” among consumers to purchase a vehicle as the “pull-forward” effect, where buyers act quickly ahead of anticipated market shifts.
“The memory of pandemic-related price hikes remains fresh (used car prices rose by 21.7% in 2021 alone), and it’s clear that consumers are still influenced by those experiences,” said AutoTrader.ca in its report. “Although there was a slight drop in demand in Q2 vs Q1, estimated used car sales rose by 1.8% for the quarter and 2% on a year-to-date basis.”
They said provincial data showed all major provinces have experienced year-over-year growth, with the exception of Quebec. The province instead experienced a softening in demand in recent months. However, AutoTrader.ca does not anticipate any major changes to used car prices.
On the new vehicle front, the average interest rate remains steady on the new vehicle front, while prices have declined slightly to $64,445. As inventory levels decrease, some upward pressure on new vehicle prices is anticipated in the near future. However, AutoTrader.ca said the shift in pricing will depend on things like availability, demand, and the impact of tariffs at the make and model level.
“If Canada and the U.S. manage to reach a trade deal by the end of July, as targeted by both governments, the anticipated new car price increases may not materialize,” said AutoTrader.ca prior to the August deadline. However, as that deadline has passed with no trade deal in sight, prices may continue to increase even as the outlook likely remains uncertain.
