Canada’s new car market continues to recover from past supply chain disruptions, with Q4 2024 showing strong year-over-year sales growth, partly driven by increased EV sales in Quebec ahead of the province’s incentive phase-out. A shift from luxury to mainstream vehicles continues, and while sales are still below pre-pandemic levels, further growth is expected. The used car market remains strong, with rising demand, lower prices, and declining interest rates, supporting continued growth into 2025. While overall new vehicle inventory in Canada has rebounded, some Asian manufacturers still face shortages.

Affordability for new vehicles has improved with lower prices and interest rates, while used vehicle affordability has remained stable. Battery Electric Vehicle (BEV) prices have declined significantly, especially for used models. However, the suspension of Canada’s federal ZEV program has introduced uncertainty in the EV market. Luxury vehicle prices have dropped more sharply than mainstream brands, reflecting Canadian consumers’ sensitivity to inflation and interest rates.