Why do used cars feel shockingly expensive—is this the new normal?

For this week’s top story, we’re comparing the costs of buying a used versus new car. Can you really save money by not buying new?

By Lisa Jackson

If you’ve recently walked onto a car dealership lot, you’ve probably had the same thought as other Canadians shopping for a car: why do used cars seem more expensive than they used to be?

The short answer: they are more expensive, but they’re still not catching up to new car prices.

The longer answer: The gap between new and used vehicles has tightened dramatically, and no, you’re not imagining it. In October 2025, the average new car price hit $63,928, while the average used vehicle sat at $36,187. Not equal; but definitely closer than in the glory days when used car prices were several rungs lower on the price ladder.

“Used car prices are much higher than what they used to be compared to 2019,” says Baris Akyurek, the vice-president of insights and intelligence at AutoTrader. “There’s still a big gap between new and used, but it’s definitely closer than it used to be.” Data backs that up: a used car that averaged $25,447 in 2019 averaged $36,187 in 2025. That’s a 42% jump.

So, how did we get here? Buckle up. It’s a wild and twisty tale involving pandemic lockdowns, supply-chain chaos, beefed-up bank accounts, U.S. tariffs and a shifting consumer psychology.

Why the auto supply drove up used car prices

To understand today’s auto prices, we have to rewind to early 2020. COVID-19 arrived, lockdowns shut down factories, microchips vanished and global supply chains folded like a cheap camping chair.

“We estimated that between 2020 and 2023, 1.5 million fewer new cars were sold,” says Akyurek. “That created a gap.” A big one. And because most Canadians lease or finance their cars rather than buy outright, it created a time bomb for the used market, too. Normally, when a four-year lease ends, that vehicle heads back to the dealership and resurfaces as used inventory. “After four years, many people go back to the dealership and say, ‘OK, give me the new model’,” says Akyurek. “They pay a bit more, take home a new car, and the old car becomes a used vehicle on the lot.” 

But what if 1.5 million cars never existed? (Thanks, COVID.) There are no lease returns four years later. No replenishment.

The result: a used market trying to function without an entire generation of cars. There’s another side to this story.

A pandemic savings boom fueled the fire

During the lockdowns, Canadians saved money just like they hoarded toilet paper. The household savings rate jumped from 2.8% pre-pandemic to a whopping 28% at one point. With travel, restaurants, commuting, gas, childcare, and recreational spending, all on pause, bank accounts quietly fattened. “There was a lot of accumulation of money,” says Akyurek. 

With the auto industry disrupted, many cash-flush buyers pivoted to used vehicles. “Back in 2020, many Canadians couldn’t find the new vehicles that they wanted because of the low supply,” he says. “Some of these consumers, intending to buy new, switched to a used vehicle instead.”

An AutoTrader.ca survey found that 31% of shoppers who couldn’t buy new were willing to make the jump to used. Add all of that to a shrinking supply, and prices reacted. “Starting around mid-2024, we started to see a decline in used inventory,” says Akyurek. “It’s economics 101: supply is low, demand is high. What happens to prices? They go up.”

What happened to car prices in 2025?

By early 2024, the auto market (finally!) started to calm down. Used car prices, which had nearly hit $40,000 in 2023, fell by 12% between December 2024 and January 2025 as supply trickled back.

“There was normalization happening—prices were coming down, and that was good for affordability,” says Akyurek. “But what happened in 2025? Tariffs.”

When Donald Trump took the U.S. presidential office and tariff talk exploded on both sides of the border, buyers panicked again. Canadians who were just browsing in February 2025 suddenly started closing deals in March, April and May. “Because COVID was still fresh in people’s minds, some consumers accelerated their car purchases,” he says.

Prices ticked up—briefly. The panic has cooled since, but don’t get your hopes up about prices plummeting anytime soon. “Used cars are never going back to pre-COVID price levels,” says Akyurek. “Those $25,000 days are over.”

The new normal—with exceptions

Used car prices aren’t set to rocket endlessly upward, but they’re also not returning to pre-pandemic levels. Structural changes—the missing 1.5 million cars, inflation, shifting demand patterns—have reset the market baseline. But not all brands and segments behave the same way.

“If you look at the new car market and compare our new car volumes to last year, everything’s normal at the aggregate level,” says Akyurek. “We have slightly more inventory on the site, more new cars. But if you look at it by Original Equipment Manufacturer (OEM) or by brand, there are vast differences in prices.”

AutoTrader.ca uses an industry metric called “days’ supply”—which is essentially how long it would take to sell every car on the market if no new ones arrived. “Sixty days is generally considered to be healthy, and we are currently at 60 to 62 days,” he says. “But if you look at it by OEM, certain OEMs have lots of inventory.”

Domestic and luxury brands often have plenty of stock. But what about mainstream car brands, like the Hondas, Fords, Nissans and Toyotas on the road? Not so much, especially those brands originating from Asia. “If you’re looking for a domestic or a luxury brand, there might be some opportunities to negotiate a deal,” Aykurek says. “But for a Toyota Corolla, that might be a different story.”

Are EVs and hybrids more affordable now?

The electric vehicle (EV) market is also shifting. The federal government suspended its EV incentive program last January, removing a major financial boost for buyers. Without those rebates, EV demand dropped quickly. “New EV sales have been coming down in double digits — around 40% year over year,” Akyurek says. And that will likely continue, since Prime Minister Mark Carney announced a trade deal with China an its EVs.

Meanwhile, used hybrids are red hot, offering fuel efficiency minus the range anxiety. Demand is high, supply is tight, and prices remain firm. “Hybrid vehicles are the best-of-both-worlds cars,” he says. “Demand has been very strong, and prices are stickier because they sell quickly.”

What does this mean for buyers 

The biggest takeaway: Today’s used vehicle pricing landscape is the new normal. But it comes with nuance. There is also no single “used car” market across Canada. There are micro-markets, where prices and availability vary by region, vehicle type, brand, and so forth. Some are cooling, some are overheated, and all are shaped by quirky supply gaps and shifting consumer behaviour. 

What you’ll pay largely depends on what you want to drive. And being armed with the right info puts you in a better position as a knowledgeable buyer rather than panic-purchasing your next ride.

“Do your research. Know your budget,” says Akyurek. “And when you find the right car for the right price—pull the trigger.”

Lisa Jackson is a personal finance journalist and editor based in Hamilton, Ont. Her writing has appeared in Canadian and international outlets, including Al Jazeera, The Globe & Mail, Toronto Star and other publications.

Read more from this issue of The Get:

1. MVP: ​​Drew Scott on debt, success and that SNL skit 
2. Why isn’t fast food cheap any more?
3. 5 fees you’re unknowingly paying
4. True or False: You must own your home to become financially secure

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