Why used car prices are still high in Canada

2 minute read Published on Oct 24, 2025 by BrokerLink Communications

Heap of toy cars of different brands and colors

In the past five years, used care prices have nearly doubled, reaching a median of $34,445 in the latter half of 2024, whereas in 2019, the average was just $18,900. Although there was a slight 4.5% drop year-over-year in June of last year, prices remain substantially more expensive compared to pre-pandemic levels.

Top 3 reasons used car prices have increased

Higher prices in the used car market can be attributed to the following three causes:

Supply chain issues and disruptions

2020 not only marked the beginning of the COVID-19 Pandemic, but also a global chip shortage that severely impacted vehicle production. Due to this shortage, auto industry leaders were unable to meet the new car market demand. Shipping delays and the shortage of other materials further impacted the market, which caused the used car market to skyrocket.

High demand and low inventory

Throughout the pandemic, many Canadians held onto their new and used cars due to reduced driving needs throughout lockdowns and other uncertainties. Once the delay of major vehicle purchases regained popularity, car dealerships were able to keep up with the demand increase, which increased new car prices.

Shortages of new cars

During lockdown, car companies prioritized manufacturing high-end, luxury vehicles over standard models like Toyota or Honda, which limited how much inventory there was. This shortfall initially shifted buyer focus to the used vehicle market. However, Statistics Canada reports that New car dealer sales fell by 0.7% in September 2024, but recovered with a 2.5% spike the following month.

How used car prices set the tone for insurance premiums

Higher car prices can directly impact your premiums. For example, in the event you get into an accident and your vehicle is a total loss, your insurance company will need to reimburse you more, which leads to more expensive costs.

With more cost pressure, in July and September 2024, auto insurance prices increased 9.6% year over year. This underscores the importance of having an insurance policy customized to the true cost of your vehicle's value. As a Canadian citizen, here’s what you can do:

What Canadians can do

Despite used car prices increasing, there are ways Canadians can shop smartly for their next vehicle:

  • Consider purchasing certified pre-owned SUVs, electric cars, trucks, or standard cars from dealerships.

  • Get multiple quotes from dealerships and private sellers.

  • Compare financing and insurance coverage options before committing to either, as prices will vary depending on where you go.

  • Be patient regardless of whether you're in the market to buy a new or used car. The best time to buy a car can shift as the market does.

Contact BrokerLink for help navigating the insurance market

With the price of new and used cars higher than ever, along with increased premiums, it's essential that you find the right insurance for your needs. BrokerLink can help you secure affordable coverage, including:

To work with us, contact BrokerLink over the phone or use our online quote tool today!

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