New Vehicle Sales Grow as Canadians Prepare for Tariff Impact

New car prices fell by nearly 2 per cent in the third quarter of 2026 at the same time as sales increased over 3 percent, pointing to a Canadian automotive market that remains resilient. However, the industry isn’t without its challenges, according to AutoTrader's Price Index.

Shoppers Feel a Sense of Urgency

Although the situation is good for new car shoppers, trade challenges threaten to increase new car prices in the new year. As a result, 81 per cent of Canadians who intend to purchase a vehicle in the next six months say they are aiming to buy before January, when higher prices are anticipated to come into effect because of tariffs between the U.S. and Canada, according an AutoTrader survey of more than 1,000 Canadian car shoppers.

Indeed, 85 per cent of those surveyed said they expected new vehicle prices to rise because of trade uncertainties. Meanwhile, 73 per cent of shoppers expected used car prices to increase, as well.

That all suggests that, despite half of car shoppers surveyed saying they had postponed their vehicle purchase, a sense of urgency due to impending price hikes could mean a busy fourth quarter for the automotive industry in Canada.

The Used Market Shows Weakness

Despite increasing sales and lowering prices in the new vehicle market, the used market was not as strong. Estimated used vehicles sales fell 3.5 per cent in Q3, reflecting weakness among both subprime and prime consumer transactions — a first this year.

Similarly, average monthly payments for new vehicles are at their lowest point since 2013 ($914) — down 3.7 per cent year-over-year — while monthly payments for used vehicles ($638) are up 1.8 per cent from a year ago.

Our data analysts believe that the softness in the used vehicle segment is temporary, though, and will depend on finding more clarity in the wider vehicle market. Trade uncertainty could put pressure on used vehicle pricing (which was stagnant in Q3), and consumers believe that used car prices will go up in the new year, like new car prices.

If trade relationships normalize, though, our analysts expect prices to remain with their normal seasonal fluctuations.

New Sedan Prices Falling Steeply

By body type, prices for new sedans have fallen the farthest in the last year. Down 12.9 per cent as compared to the same time last year, average prices are now at $52,726. Unfortunately, buyers of used sedans aren’t as lucky, with prices rising 1.3 per cent year-over-year to $35,239.

Similarly, average prices for new minivans were down 1.6 per cent in Q3 ($68,482), but prices for used minivans rose 2.4 per cent ($35,595). New pickup prices remained stable (down 0.4 per cent to $80,764), while used prices fell gently (down 1.1 per cent to $49,717).

SUVs bucked the trend, though, with prices for new models increasing minimally (by 0.6 per cent) to $57,064. The cost of a used SUV actually went down, though, to $33,648, which is 2.8 per cent less than a year ago.

Read the full price index here.