Canadians are shelling out more money than they used to buy used cars while buyers of new cars seem to be getting better and better deals.

That’s the findings of AutoTrader’s price index for the third quarter of 2025.

The report shows that on a year-over-year basis average new vehicle prices dropped by 4.9 per cent, but used vehicle prices went up by 3.2 per cent.

The latest report, based on average prices seen in September, suggests average new vehicle prices were $63,264 during the month, while average used vehicle prices were $36,911.

Good and bad news for new car buyers

Average new car prices were down by 0.3 per cent from a month earlier, and were more than $1,000 lower than they were just a quarter earlier.

Another positive for new car buyers is that interest rates reached their lowest rate since July 2022.

On the flip side, AutoTrader said there may be some upward pressure on new vehicle prices as some manufacturers can no longer absorb tariff-driven costs, which could lead to higher vehicle prices.

Good and bad news for used car buyers

There’s some positive news for buyers of used vehicles.

While prices were up from a year ago, they’ve actually been coming down over the last few months.

Following COVID-19-era increases, average used vehicle prices were coming down and reached their lowest in December 2024, but have been climbing after that until they peaked in June 2025. They’ve been coming down again since then.

Used vehicle prices in September were down by one per cent from just a month earlier, according to the report.

AutoTrader said the impact on used vehicle prices is “not straightforward” as it depends on whether potential new vehicle buyers shift to buying used cars if new car prices climb.

“If demand for used vehicles rises significantly and inventory remains tight, prices could climb. At the same time, the broader trend has been for used car prices to ease as supply conditions improve, and seasonal demand slows, meaning some further moderation in prices is still possible in the coming months,” the Q3 2025 price index report said.

“Much will depend on the availability of both new and used vehicles, ongoing trade policy developments, and broader economic conditions, so visibility remains limited.”

Inventory up

AutoTrader says both used and new vehicle inventory is up from a quarter earlier.

This has largely been driven by a softening in the vehicle market, as in fewer people bought cars over the last few months compared to previous quarters.

The report said there were 64 days of new vehicle inventory, which is considered “healthy.”

Used vehicle inventory is also up from a quarter earlier, but still remains tight due to lower new vehicle production and sales during the years of 2020 to 2023.

The full report is available on the AutoTrader website.

Why do we care about AutoTrader’s price index?

AutoTrader is not the only organization that provides insights into average vehicle prices in Canada, and its findings don’t always match up with those of Statistics Canada.

However, AutoTrader is the largest automotive marketplace in Canada, therefore it has access to what’s likely the largest data set in the country.

While that’s no guarantee of perfect accuracy, AutoTrader’s price index is a strong barometer of average Canadian vehicle prices.

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