The evolving nature of U.S. tariffs and Canadian counter-tariffs on vehicles and components to make vehicles is making it difficult to predict how the automotive market will evolve, AutoTrader said in its latest quarterly price index.

The online automotive marketplace released its price index for the first quarter of 2025, which is showing new vehicle inventory rising but used vehicle inventory shrinking – and a lessening of inventory is resulting in increasing prices.

“While new car inventory has largely recovered to pre-pandemic levels, ongoing uncertainty around tariffs is making long-term forecasting difficult, with potential outcomes ranging from flat sales to a 25 per cent decline this year,” the report said.

The first-quarter report looks at prices and inventory up to the end of March, prior to the U.S. introducing tariffs on Canadian- and Mexican-made vehicles, and Canada introducing counter-tariffs on U.S.-made vehicles.

AutoTrader points out the used vehicle market was hot in the first quarter, partly due to buyers trying to get ahead of the tariff-induced price increases.

Let’s take a look at vehicle prices.

Average new vehicle prices

Average new vehicle prices in the first quarter of 2025 were $65,564, according to AutoTrader.

That is a year-over-year decline of 2.8 per cent and a month-over-month decline of 0.4 per cent.

The report said pricing impacts, due to tariffs, are inevitable, but the timing, scale and which manufacturers will be affected is uncertain.

Average used vehicle prices

Average used vehicle prices in the first quarter of 2025 were $36,823.

That is a year-over-year decline of 2.2 per cent, but a month-over-month increase of 0.3 per cent.

New vehicle inventory

The AutoTrader report shows new vehicle inventory was mostly up in the first quarter of 2025.

Here’s the breakdown by segment:

• SUVs – year-over-year up 14 per cent; quarter-over-quarter up 4 per cent
• Trucks – year-over-year down 24.7 per cent; quarter-over-quarter down 10.9 per cent
• Cars – year-over-year up 37 per cent; quarter-over-quarter up 5 per cent
• Minivans – year-over-year up 141.7 per cent; quarter-over-quarter up 1.7 per cent

Used vehicle inventory

On the used vehicle side, the report shows inventory is mostly down.

Here’s the breakdown by segment:

• SUVs – year-over-year down 8.5 per cent; quarter-over-quarter down 5.3 per cent
• Cars – year-over-year down 13.8 per cent; quarter-over-quarter down 6.8 per cent
• Trucks – year-over-year down 15.6 per cent; quarter-over-quarter down 10.2 per cent
• Minivans – year-over-year up 6.7 per cent; quarter-over-quarter down 4.7 per cent

AutoTrader anticipates used vehicle inventory to remain constrained until 2027, which it said may keep prices elevated.

The full report is available at autotrader.ca.

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