The Canadian automotive market started 2025 strong, with both new and used vehicle sales boosted in March by consumer anticipation of tariffs.

New car inventory has mostly recovered to pre-pandemic levels, but uncertainty around tariffs has made long-term forecasts difficult, with outcomes ranging from stable sales to a potential 25% decline.

Used vehicle demand remains high due to buyers shifting from new cars and attempting to avoid future price hikes, though inventory is still tight and likely to stay constrained until 2027. Affordability has improved from pandemic peaks but remains above pre-COVID levels.

Tariffs are already impacting market behavior—pushing some buyers to used vehicles, affecting pricing, and potentially reducing exports to the U.S., which could help local supply.