The Canadian used vehicle marketplace is showing signs of stabilization, defined by plateauing retail prices and inventory accumulation heading into the summer season. 

According to the latest Used Vehicle Market Insights report from CARFAX Canada, while secondary market valuations remain elevated compared to pre-pandemic benchmarks, national average listing prices have decreased by 3.8% compared to the same period last year.

Used vehicle listings experienced a substantial 21.6% month-over-month increase. However, this clip has not fully alleviated long-term supply pressures, with overall inventory levels remaining flat year-over-year. CARFAX Canada attributes this ongoing constraint to reduced new-vehicle manufacturing volumes earlier in the decade, which has generated a trailing reduction in off-lease vehicle turn-ins.

On the transaction side, Canada recorded 254,881 used vehicle sales—a modest 1.2% gain month-over-month, but a 7.2% decline year-over-year. Buyers remain cautious amid broader economic headwinds and affordability constraints, further influenced by the Bank of Canada holding its key policy interest rate at 2.25%. From a segment standpoint, SUVs continue to capture consumer preference, accounting for a record 56% share of all active used vehicle listings.

Used EVs: High Demand Meets Premium Pricing Barriers

A critical takeaway from the report is the rising consumer interest in vehicle electrification, accelerated by expanding charging infrastructure and high retail fuel costs, which averaged 178.8 cents per litre—the highest level recorded since July 2022. Consequently, 22% of Canadians planning a used vehicle purchase within the next 12 months are actively considering a Battery Electric Vehicle (BEV).

Despite this demand, supply channels remain exceptionally narrow, with BEVs representing just 4% of total used market listings. Furthermore, current inventory is heavily weighted toward high-tier models; Tesla configurations dominate the pre-owned EV space, commanding 60.4% of total available EV inventory (led by the Model 3 and Model Y). This structural imbalance pushed the average used EV listing price to $40,893 (a 4.7% month-over-month increase). However, market dynamics are expected to shift as new, lower-priced entries from Chinese automakers, such as BYD, arrive on Canadian soil and introduce more competitive price points.

Regional Disparities and the Cost of Vehicle Damage

Geographically, British Columbia retains its status as the most expensive used vehicle market in the country, with Vancouver posting the highest average listing prices, up 14.3% year-over-year. Conversely, Quebec and the Atlantic provinces continue to register as the most affordable regions nationwide.

The report also factored in the economic impact of vehicle history on retail valuations, noting that 30.9% of all listed used vehicles carried reported damage histories. On average, these vehicles were listed at prices $7,464 lower than their undamaged counterparts, reflecting a significant valuation gap based on structural and cosmetic history.