Canada Used Car Market Size (2024 - 2029)

Canada Used Car Market Analysis

The Canada Used Car Market size is estimated at USD 16.58 billion in 2024, and is expected to reach USD 23.03 billion by 2029, growing at a CAGR of 6.80% during the forecast period (2024-2029).

Consumers' growing preference towards availing private transportation medium owing to the increase in personal disposable income and GDP per capita, the emergence of online auto platforms, and increasing new vehicle prices serve as the major determinants for the growth of the used car market in Canada. In 2022, the GDP per capita in Canada stood at USD 54,966.5, an increase of 5.0% compared with 2021. Further, the average annual salary in Canada stood at USD 59,300 in 2022.

With the increasing financial stability, consumers prefer private transportation mediums to enhance their convenience for personal mobility. However, the spike in new vehicle prices deters some of these customers from purchasing brand-new vehicles, subsequently leading to the surging demand for used cars in Canada. For instance, it was estimated that the average new vehicle price in Canada stood at USD 66,288 in June 2023, a massive Y-o-Y increase of 21.3% compared to June 2022. Consumers growing concerns about high inflation, which rose by 3.3% in June 2023 compared to the same month in 2022, is also acting as a catalyst for the falling demand for new cars in Canada.

The Canadian market witnessed used car prices cooling off in 2022 after a period of substantial surge post-pandemic. In June 2022, used sedan prices dropped by 6% compared to the prices at the beginning of 2022. This brought the price average down from USD 30,475 to USD 28,553. For used pickup trucks and sports utility vehicles (SUVs), prices have dropped by about 2% in the same period. While the average price of a used SUV was USD 35,159 at the beginning of 2022, it dropped to USD 34,303 by the end of June 2022.

One of the major challenges faced by the used car market is the presence of a large number of used car dealerships across Canada charging lesser commissions than their counterparts to gain a competitive edge, making the market highly fragmented. Coupled with that, the government's auction platform in Canada offering lower-priced used vehicles to consumers serves as a major pain point for private players operating in this space. 

Although this platform proves to be beneficial for consumers in purchasing lower-priced second-hand cars, on the other hand, revenue-generating prospect for private companies takes a hit. For instance, in November 2022, through the GCSurplus website, the Canadian government announced the auction of various used car models at a price lower than their actual value.

The government's aggressive strategy to promote the electrification of vehicle fleet and ban of petrol/diesel cars to promote the reduction in carbon emissions will aid the demand for used cars across Canada during the forecast period. Consumers who are willing to purchase cheaper alternatives to new-energy vehicles are increasingly adopting the purchase of used vehicles for convenience in mobility. For instance, in January 2023, the Canadian government released the proposed regulations mandating all new private light vehicles sold in the country by 2023 be zero emission vehicles (ZEVs) to support its plan of phasing out petrol and diesel cars by 2035. 

Further, the government announced its strategy to invest CAD 1.7 billion (USD 1.25 billion) in purchase subsidies for electric passenger cars and light commercial vehicles and additional funds of CAD 400 million (USD 294 million) in charging stations to promote electric mobility in the country. Even with the subsidies, the higher cost of electric vehicles adds to the financial burden of the consumer attributed to its high battery cost, thereby, in turn, making the consumers opt for used cars.

Canada Used Car Industry Segmentation

A used car/pre-owned vehicle, or a secondhand car, is a vehicle that previously had one or more retail owners. A certified pre-owned (CPO) vehicle, on the other hand, is a pre-owned vehicle that has been extensively inspected (pre-purchase inspection) and expertly reconditioned. The used car market consists of a wide range of companies involved in the purchasing and selling of pre-owned vehicles through online or offline sales channels.

The Canada used car market is segmented by vehicle type, vendor type, fuel type, and sales channel. By vehicle type, the market is segmented into hatchbacks, sedans, and sports utility vehicles (SUVs)/multi-purpose vehicles (MPVs). By vendor type, the market is segmented into organized and unorganized. By fuel type, the market is segmented into petrol, diesel, electric, and others (liquefied petroleum gas, compressed natural gas, etc.). By sales channel, the market is segmented into online and offline. 

The report offers market size and forecast value (USD) for all the above segments.