Experts say U.S. tariffs on Canadian auto imports will drive prices higher for both new and used cars.
Sean Mactavish, CEO of used-car marketplace Autozen, says prices are already rising on some used cars as sellers anticipate buyers looking for a better deal compared to a new vehicle.
“New car prices go up. People (look) into the used cars, and then that increase in demand drives the prices up for used vehicles,” he said.
Mactavish says consumers are likely to trade down to used cars or even delay major vehicle purchases as they grapple with uncertainty and higher prices.
Once the tariffs start rolling through the supply chain, prices on new cars are expected to go up too, said Baris Akyurek, vice-president of insights and intelligence at Autotrader.ca.
“It’s inevitable that there’s going to be an increase in new car prices,” said Akyurek.
He added that demand for used cars was rising for weeks before the new tariffs were enacted as consumers anticipated what could be coming.
“We believe that some of those consumers who wanted to get ahead of these potential increases, they’ve already pulled the trigger,” he said.
U.S. President Donald Trump has enacted 25 percent duties on imported vehicles, with temporary reprieve for some parts compliant with the Canada-U.S.-Mexico free trade agreement.
Prime Minister Mark Carney has announced retaliatory tariffs on automobiles coming in from the U.S.
Auto industry leaders have warned the tariffs will lead to plant shutdowns. Stellantis has already temporarily paused operations at its plant in Windsor, Ont.
Shutdowns will add further pressure to the supply of cars, which also means higher prices, said Mactavish.
During the COVID-19 supply crunch for vehicles, a similar rise in used-car prices happened, noted Mactavish. This time, it’s likely to be particularly concentrated on certain makes and models depending on where they are made, he said.
