Starting in the third quarter of last year, used car demand softened slightly on a year-over-year basis. This trend, coupled with increased used car supply, resulting from strong new car sales and subsequent trade-ins, as well as a pivot in demand to new cars due to a ramp up in production and availability, has brought about declining used car prices.

On the flipside, new car prices show stability since the beginning of the second quarter of this year. Based on internal transactional sales data*, automotive manufacturers have resurrected incentives, through more competitive interest rates, making new cars more affordable despite stable prices.

In June 2024, the average used car price dipped 1.1% to $36,342 compared to the previous month, marking an 8.3% year-over-year decline. New car prices averaged $66,807, a 0.8% increase from the same period last year. Additionally, new car interest rates from the lending arm of automotive manufacturers, (i.e., subvented loans), have dropped from 6.2% in November 2023 to 5.3% in June 2024, making new cars even more accessible for Canadian shoppers.

Looking ahead to July, we expect used car prices to continue to normalize and new car prices to remain at around the levels from the previous year. We believe vehicle prices for both new and used cars likely peaked in 2023, at least in the short term, however, a return to pre-pandemic prices is not anticipated any time soon.

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