Used Car Prices Showing Signs of Easing in Canada: AutoTrader Price Index September 2025
Used Car Prices May Have Peaked
If you’ve been waiting for used car prices to peak before buying or for that younger used vehicle, now may be your moment.
What’s Happening with Used Car Prices in Canada?
After a notable increase that began in March, used car prices are finally showing signs of easing. In August, the average used car price fell by 0.9 per cent on a month-over-month basis to $37,280, but remains 3.5 per cent higher than last year.
Have Tariffs Impacted Car Prices in Canada?
As AutoTrader’s February consumer research predicted, prices increased in March as buyers anticipated new tariffs. Many Canadians still remember the dramatic 21.7 per cent spike in 2021, prompting some to purchase earlier than usual, while others shifted from new to used cars to get ahead of possible price hikes. This move has proven unnecessary so far, given the robust new inventory in early 2025 (the picture is more nuanced at the make and model level, but that's a subject for another column — follow AutoTrader’s Quarterly Price Index for a more detailed overview). Used inventory has been tight for over a year, a result of 1.5 million fewer new vehicles sold from 2020 to 2023. Low supply and high demand always tend to drive prices up, whether for cars, watches, or otherwise.
New car sales have been strong throughout 2025, as buyers moved quickly to lock in purchases ahead of anticipated tariffs and price adjustments. After a robust start to the year, August saw a brief slowdown in demand, influenced in part by fewer selling days this past month.
Record-Breaking Home Sales in August Coincide with Car Market Slowdown
Notably, August also recorded the highest level of home sales in Canada for the month in the past four years, with 40,257 homes sold nationwide — up 1.9 per cent from August 2024 (Source: Canadian Real Estate Association, August 2025). Both homes and cars are among the largest purchases most Canadians ever make, and strong activity in one market can influence the other. Renewed confidence in the housing sector, along with more households relocating or upgrading, may have spillover effects on car buying — driving decision-making for big-ticket items as consumers reassess their needs and financial priorities.
The early surge in new car sales resulted in more trade-ins, bringing a fresh wave of younger vehicles to the used market. Today, nearly half of new car sales come with a trade-in attached, reshaping the inventory landscape. On AutoTrader, 43 per cent of all used car inventory is less than three years old, as opposed to 39 per cent at the same time last year.
If you have the financial means and have been waiting for prices to start coming down or for that nice, low-mileage, young vehicle, this may be your time to buy.
