Even with unresolved tariff tension between Canada and the U.S., the overall impact on consumer buying behaviours is increased hesitance and uncertainty. 

Canadians are continuing to spend, but how and where they spend will shape various sectors, including Canada’s auto market. Clutch, Canada’s leading used car retailer, has a few predictions for the used car market this year, including:

• Used prices expected to edge higher — driven by mix, not sticker shock: Average selling prices are expected to rise modestly as buyers continue to gravitate toward newer, larger, and more premium vehicles, even as normal depreciation persists within individual segments.
• SUVs and crossovers continue to crowd out cars: The long-running shift away from sedans will accelerate, further reshaping Canada’s used-vehicle landscape in favour of utility-style vehicles.
• Hybrids and EVs gain more share — but policy will set the pace: Electrified vehicles are poised for another year of growth, with momentum tied closely to the outcome of the federal EV strategy review and how quickly provinces align incentives and charging infrastructure.
• Affordability challenges persist at the low end: The sub-$20,000 used-car market will remain supply-constrained, dominated by older vehicles, with newer models largely priced out of reach.
• Consumer confidence becomes the key swing factor: If sentiment weakens, depreciation could accelerate; if confidence holds, used prices may prove more resilient than expected.
• 2026 tests the durability of post-pandemic trends: Rather than a sharp reset, the year will reveal whether the structural shifts seen in 2025 are temporary or the new normal for Canada’s used-car market.