Used Car Prices in Canada Rise as New Vehicle Costs Fall
Used Car Prices in Canada Rise as New Vehicle Costs Fall
Canadians shopping for cars in 2025 are facing opposite trends in the new and used markets. A new AutoTrader report shows that new car prices dropped in June, while used car prices climbed, marking four straight months of increases.
Used Car Prices in Canada Hit $37,664
The average used vehicle price in June 2025 was $37,664, up 3.6% year-over-year. That follows a steep 12% decline in 2024, showing the market has now reversed direction.
The main reason is a shortage of supply. AutoTrader data shows used car inventory fell 16.8% compared with June 2024.
“Usually, used car prices start higher and come down over the year. But this year we’ve seen the reverse,” said Baris Akyurek, vice-president of insights and intelligence at AutoTrader.
New Car Prices Fall to $64,445
In contrast, the average new vehicle price fell to $64,445 in June 2025, down 3.5% from a year earlier.
At the start of the year, dealers had a surplus of new cars, with 87 days of supply compared with the industry norm of 60. This was the result of post-COVID production recovery and softer demand earlier in the winter.
Dealers have also been working through older stock before the possibility of U.S. tariffs affects incoming shipments.
Tariff Fears Push Buyers Toward Used Vehicles
Concerns about potential American car tariffs have changed Canadian buying habits.
A February AutoTrader survey found that 47% of Canadians believed tariffs would affect their decisions, while 31% said they would switch from new to used vehicles.
“Talk of tariffs spooked a lot of buyers,” said Mr. Akyurek. “That drove more demand into the used market, where supply was already tight.”
Ontario Car Prices: A Slight Dip in June 2025
Ontario was the only province where used vehicle prices fell slightly in June. In all other regions, used car prices increased.
Electric Vehicle Prices Continue to Decline
AutoTrader also found that new and used electric vehicle (EV) prices have been falling. With government EV incentives reduced, demand has weakened.
Zero-emission vehicle sales dropped 45% in March and nearly 30% in April 2025, compared with the previous year.
What This Means for Canadian Car Buyers
Experts say the current market favours new car purchases. Financing incentives and lower interest rates are helping keep new vehicles affordable.
Average new car loan rates fell to 5.4% in June 2025, down from 6.6% in June 2024. Many automakers are also offering discounts to move inventory.
“It’s a better time to buy a new vehicle,” said Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book.
For used vehicles, the outlook is less positive. Prices have risen for four consecutive months and may continue to rise before softening later in the year.
“Used vehicle prices could ease toward the end of 2025, but for now, it’s not the best time to buy,” Ross said.