Canada’s used-vehicle market is drifting closer to “normal,” with wholesale prices for two- to six-year-old vehicles continuing to decline month over month, according to the Residual Value Newsletter (January 2026) from Canadian Black Book.
The report points to a cooling market backdrop: inflation held steady at 2.2 per cent in November, while food prices rose 4.2 per cent year over year, a reminder that household budgets remain under pressure even as the overall inflation rate stabilizes.
Canada also avoided a technical recession, posting 2.6 per cent annualized GDP growth in the third quarter, helped by crude oil exports and government capital spending. On the labour front, the unemployment rate fell to 6.5 per cent in November, driven by an increase in part-time work, particularly among youth.
The newsletter notes the Bank of Canada cut its policy rate to 2.25 per cent in October, then held rates steady on Dec. 10, as revised GDP data suggested the economy entered 2025 stronger than previously believed. Analysts cited in the report suggest further cuts in 2026 may be unlikely.
Looking ahead, the report flags continued uncertainty around U.S. trade talks, with CUSMA renewal negotiations expected to begin in early 2026. It also highlights that B.C. is reviewing its electric vehicle mandate, potentially delaying implementation while Ottawa rethinks the national mandate.
For dealers, the overall message may be that declining wholesale prices can squeeze trade-in values and put pressure on used margins. However, they also create opportunities to stock more competitively, sharpen reconditioning and pricing discipline, and push leasing and finance products where monthly payments matter most.
