Pain at the pump, sticker shock forcing buyers into used car lots
· Toronto Sun
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OTTAWA — With Canada’s affordability crisis dashing dreams of home ownership for many, Canadians are now finding that owning a new car is also becoming out of reach.
Released on Tuesday, AutoTrader’s Q2 2026 automotive price index suggests that even though new car prices have eased slightly, one in seven Canadians are abandoning plans to purchase a new car off the lot, opting instead for more affordable used options.
“Our Canada-United States-Mexico Agreement (CUSMA) research reinforces that affordability remains the primary driver of vehicle purchase decisions,” reads an excerpt from the study, adding that while buyers are at least peripherally aware of the ongoing trade discussions, it isn’t influencing how they shop for vehicles.
“Instead, some shoppers are adapting their purchase choices by considering more affordable options, including switching from a new to a used vehicle (14%) in anticipation of higher new car prices.”
Alberta is Canada’s costliest place to buy a car
National average new vehicle prices hit $63,016 in the second quarter of this year, while used cars averaged $36,690.
Alberta is Canada’s most expensive place to buy a new car, averaging $67,771.
That’s followed by Saskatchewan and Manitoba ($64,226), British Columbia ($63,565), Ontario ($62,138), Quebec ($60,286), and the Atlantic provinces ($56,165).
For used cars, Alberta ranks highest at $39,719, followed by B.C. ($39,427), Saskatchewan and Manitoba ($37,417), Ontario ($35,714), Quebec ($34,985), and Atlantic Canada ($32,319).
Thanks to ongoing and persistent COVID-related supply constraints , used car prices aren’t expected to return to pre-pandemic levels anytime soon.
Broader economic uncertainty, the study continued, is also prompting some to delay buying a new car — with affordability continuing as a main driver in the Canadian vehicle market.
“The moderation in used vehicle sales has been concentrated among subprime consumers, whose purchasing power has been disproportionately affected by higher living costs,” the study said.
“Prime consumers, by contrast, purchased more used vehicles during both quarters of the first half of the year compared to the same period in 2025, indicating that market softness reflects affordability pressures rather than a broad decline in demand.”
EVs remain in demand, but supply remains concern
With the market still dealing with contracted inventory stemming from pandemic-era reductions in production volumes, these impacts are expected to be felt until at least next year.
“At the same time, reciprocal tariffs have reduced used vehicle exports, supporting domestic inventory, although anecdotal evidence suggests CUSMA-compliant vehicles continue to be exported to the U.S. in strong numbers due to robust consumer demand,” the report said.
While high gas prices and federal incentives make EVs an attractive option for car buyers, significant shortages of used electric cars and trucks lead to a 0.4% year-over-year price increase.
That being said, Statistics Canada reported a 15.8% year-over-year increase in EV sales at the beginning of this year.
“There is a slight uptick in availability, but affordable EV supply remains tight, pushing the average EV listing prices to the higher side,” the report read.