The used car market in Canada has emerged to become a major player in Canada’s automotive industry. With economic factors, buyer behavior, target audiences and fast-changing technology; this market offers both exciting opportunities and some challenges. In this post, we explore the Canadian used car market, and data shaping the used car market trends in Canada.
Key Trends in the Canadian Used Car Market
Market Growth and Dynamics
The preowned or used car market in Canada has been growing incredibly over the past few years. Report released by Canadian Automobile Dealers Association (CADA) states that the used car market in Canada has increased considerably. This rise is largely attributed to the increasing prices of new cars, shifting target markets and their preferences respectively. Used car sales accounted for 57% of the total sold in 2022, which increased to 60% in 2023.
This rising trend points out that Canadian consumers are looking more and more at preowned/used cars as affordable alternatives to pricey new vehicles.
Consumer Preferences
Consumer preferences play very important role in shaping the used car market in Canada. Recent survey indicates an increasing trend of Canadian buyers toward SUVs and trucks, which proves to be a change in lifestyle and practical needs. Statistics Canada suggests that in 2023, more than 70% of used vehicle sales were SUVs/trucks, compared to 65% in 2022. Another rising trend in the auto industry is growing demand of fuel-efficient vehicles and hybrids due to environmental concerns and higher fuel-prices.
Digital Transformation
The advent of digitization has altered the way in which the auto market used to work in respect to how Canadians sell and buy used vehicles. The existence of online platforms and tools have made it a lot easier for consumers to do research and make comparisons for buying vehicles. A report by AutoTrader in 2024 states that nearly 80% of Canadians now rely on online resources while searching for used vehicle listings and 60% of transactions start online. This shift underlines how imperative online presence has become for car dealers in Canada and the increasing reliance on digital tools by buyers and sellers alike.
Environmental Considerations
Canadians are becoming more conscious of their “carbon footprint” and opting for used cars as a less resource-intensive alternative to new cars. Hybrid and electric vehicle options are also increasingly available in the used market. This relates to the broader trend toward eco-friendly solutions in transportation. The percentage of hybrid and electric vehicles in the used car market grew by 15% in 2023 alone, according to the Canadian Vehicle Manufacturers’ Association.
Economic Factors
Canada’s automotive industry is driven mainly by economic conditions, interest rates, and fuel prices. According to the Bank of Canada’s latest reports, changes in interest rates may impact consumer purchasing power. Consequently, when interest rates climb, consumers will be inclined toward relatively cheap used cars. The price of fuel also affects the used car market. If fuel costs are high, demand is found to shift towards the fuel-efficient used car segment.
Data-Driven Insights
Market Segmentation
A Customer Success Moment captured at Village Auto Sales Saskatoon
According to a 2023 survey by J.D. Power:
SUVs: 45% of used vehicle buyers preferred SUVs because of their space and versatility.
Trucks: 25% of buyers chose trucks due to their durability and utility.
Sedans: 20% preferred sedans for their fuel efficiency and comfort.
Hybrids and EVs: 10% opted for hybrid or electric vehicles, reflecting growing environmental awareness.
Pricing Trends
Vehicle condition, age, and market demand are key factors influencing the used car market in Canada. Indeed, data from Kelley Blue Book revealed that the average price of a used vehicle in Canada surged by 8% in 2023, reaching a substantial CAD 30,000. This increase was primarily attributed to the ongoing escalation of new vehicle prices, exacerbated by supply chain disruptions in the aftermath of the COVID-19 pandemic and the Russia-Ukraine war.
Regional Variations
Regional variations also influence the used car market in Canada. For instance, there is a greater demand for SUVs/trucks in rural and suburban areas compared to urban areas. Data from the Canadian Auto Dealers Association shows that:
Rural Areas: SUVs/Trucks compose 60% of used vehicle sales.
Urban Areas: 55% of sales are SUVs and trucks, while there is also greater demand for smaller, more fuel-efficient vehicles.
The used vehicle market in Canada is experiencing explosive growth. Driven by shifting consumer preferences, technological advancements, and economic factors, this market is evolving rapidly. Consequently, demand for SUVs, trucks, and fuel-efficient vehicles is on the rise. Moreover, more used car buyers are embracing digital platforms. Therefore, understanding these trends and data is essential for buyers and sellers to navigate the market effectively and make informed decisions.
To thrive in Canada’s dynamic used car market, including the Saskatoon area, it is crucial to stay updated on market trends and leverage digital tools.
Staying updated with changing trends in the automotive industry and relevant data can help both buyers and sellers. These insights allow them to navigate the market and make informed decisions.
As the market continues to evolve, it’s essential to stay informed. Keeping up-to-date with the latest trends and utilizing digital tools will be crucial for success in the Canadian used car market, and for Auto dealers in Saskatoon and beyond.
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