Canadian used-car market steadies in Q3 — but the road ahead is still hazy

Canada’s used-vehicle market has cooled into a more seasonal rhythm after an overheated first half, with wholesale values easing gently and retail prices still sitting above last year. That mix creates a window to trade a touch of gross for speed and spread—if you price dynamically, source selectively, and desk deals around payments.

The market, in three lenses

Retail pulse (AutoTrader). AutoTrader’s Q3 2025 Price Index shows three straight MoM declines in used prices, yet September’s average used price was $36,911, up 3.2% YoY. New-vehicle prices fell 4.9% YoY in Q3 as availability improved, and nearly half of new purchases involved a trade-in—both dynamics that help replenish late-model used supply. Tariff-driven cross-border flows also cooled, keeping more units in Canada. Net: the initial “tariff-rush” has faded and conditions look steadier, though normalization of structural supply gaps isn’t expected before 2027. AutoTrader.ca+1

Wholesale barometer (CBB). Canadian Black Book’s Used Vehicle Retention Index for August 2025 edged down to 138.1 (-0.4 points MoM; +1.5% YoY), signaling mild, orderly depreciation after a resilient summer. Canadian Black Book

Auction & macro color (OPENLANE). OPENLANE Canada reports its used price index decreased by 0.4 (seasonally adjusted) in September, even as national auto sales ran ~4% higher YoY for the month and sat just over +4% YTD through Q3—supportive of trade-in flow into the used channel. OPENLANE Canada+1

Retail cross-check (Clutch). Clutch’s September snapshot pegs average used price at $34,188 (+0.59% MoM, +7.28% YoY). Methodology differs from AutoTrader, but both confirm retail tags remain higher than 2024 even as wholesale eases—classic margin-compression setup if you’re not adjusting quickly. Clutch+1

What to do this month (November 2025)

1) Price like a market maker (not a historian).
Start close to live market on replaceable bread-and-butter trims (e.g., 98–100% of comp) and defend scarcity units with demonstrated click velocity. Trigger reductions by time-at-price (3/7/14-day cadence), not feelings. This aligns with AutoTrader’s MoM drift and CBB’s gentle depreciation. AutoTrader.ca+1

2) Exploit the late-model window.
OPENLANE’s sales backdrop implies more trade-ins feeding 1–4-year-old inventory. Pre-write appraisals for those cores, set firmer floors on clean history/low recon units, and avoid overpaying for average condition vehicles as lanes soften. OPENLANE Canada

3) Merchandise to the payment.
With retail prices still up YoY, win the affordability conversation on VDPs and at the desk. Lead with payment bands and total monthly ownership (finance + fuel + insurance). AutoTrader’s data shows softening new prices but lingering budget pressure—use side-by-side payment storytelling to tilt shoppers toward nearly new used. AutoTrader.ca

4) Tighten turn policy > chase last dollar.
In a soft-drift tape, aging risk compounds. Codify a 45-day exit: if a VIN misses two price-drop checkpoints and falls below median VDP views for its segment, move it (wholesale or retail with spiffed closeout) and recycle capital.

5) Recon that photographs.
Prioritize “visual recon” (tires, paint correction, odour remediation, glass) that boosts SRP→VDP and first-lead—especially on mainstream CUVs and small cars where buyers compare dozens of near-substitutes.

6) F&I menu: protection + convenience.
When customers stretch to a payment, they’ll still pay a few dollars for risk transfer (warranty/GAP) and convenience (prepaid maintenance). Build two menus: a value “keep-you-driving” and a longer-term “keep-you-covered.”

Segment notes we’re watching

Mainstream CUVs & small cars: liquidity leaders; price to move and backfill quickly as trade-ins rise. OPENLANE Canada
EVs: pricing and demand remain choppy; favor well-optioned, warranty-heavy units. Use local SRP/VDP to size stocking bets (policies and incentives remain a swing factor, per broader Q3 narrative). AutoTrader.ca
Full-size trucks: selective bidding at auction; do cosmetics/tires first to preserve search rank before cutting price.

The takeaway

Across sources, the theme is consistent: wholesale steady-to-softer; retail still elevated YoY; supply gradually improving. Dealers who refresh price ladders weekly, appraise with discipline, and desk around payments can convert velocity into gross dollars per day, not just front-end per copy.