Used-car retail sales in Canada have been “more resilient than expected” this year, with the softness largely attributable to lack of affordability, not weak demand.

That’s according to the latest AutoTrader Price Index report, which said used-car sales are down 1% through six months and fell 2.5% in the second quarter.

“Affordability continues to be the dominant market driver. The moderation in used-vehicle sales has been concentrated among subprime consumers, whose purchasing power has been disproportionately affected by higher living costs,” AutoTrader said in the report.

“Prime consumers, by contrast, purchased more used vehicles during both quarters of the first half of the year compared to the same period in 2025, indicating that market softness reflects affordability pressures rather than a broad decline in demand.”

Average used-car prices were at $36,690 in June, which was down 0.1% from May and 2.6% lower than a year ago, according to the report.

Despite the declines, these are “historically high” prices, leading to affordability issues for many consumers, AutoTrader said.

And those affordability challenges are outweighing concerns over Canada-United States-Mexico Agreement discussions.

“While consumers are aware of ongoing trade discussions, CUSMA renegotiations are not materially influencing overall purchase intentions. Instead, some shoppers are adapting their purchase choices by considering more affordable options, including switching from a new to a used vehicle (14%) in anticipation of higher new car prices,” AutoTrader said.

“Broader economic uncertainty is also leading some consumers to delay purchases, but CUSMA itself has had limited influence on current shopping behavior.”

AutoTrader noted that COVID and the tariff saga of 2025 illustrated that a changing new-car market can affect used-car prices “more rapidly and more significantly.”

And used-car prices are not immune from challenges around trade.

“If trade uncertainty persists, used prices could face further pressure,” AutoTrader said. “Conversely, a normalization in trade relations with the U.S. would likely lead to a gradual price decline following typical seasonal patterns.”

They added, “More broadly, used-car prices are unlikely to return to pre pandemic levels due to tighter supply, sustained demand, and structural factors such as population growth and electrification.”

As of June, monthly payments on used cars were up 0.9% year-over-year at $640, AutoTrader said, noting that it doesn’t anticipate much turbulence the rest of 2026.

“Vehicle prices are likely to remain relatively stable are there is limited room for further interest rate cuts and consumer demand is expected to hold up,” the company said. “Consequently, monthly payments should stay elevated but broadly steady throughout the remainder of the year.”

On the wholesale side of the market, prices have slowed as the second half of the year gets underway.

For the week that ended Saturday, wholesale used-vehicle values dropped 0.48%, following a 0.51% decline the prior week, according to the latest Market Insights report from Canadian Black Book.

These declines are higher than the 0.33% average decline observed for this week during 2017-2019, CBB said.

The drop in car segment values steepened from 0.29% to 0.39%, while the drop in truck/SUV segments moved from 0.58% to 0.51%, the data shows.

The declines were “broadening across most segments and accelerating for compact cars, full-size pickups, and mainstream full-size crossovers/SUVs,” CBB said in the report.

“Auction activity remained healthy, with strong sell-through rates and active online bidding, but pricing was increasingly selective.”

The sales conversion rate at auction last week was 57%, same as the week before, CBB said. This points to stable participation among buyers at auction, even with pricing pressure.

“Auction activity reflected a healthy but increasingly selective wholesale environment, with demand remaining strongest for retail-ready SUVs, pickups, and well-equipped late-model vehicles,” CBB said.

“Softer performance was concentrated among less desirable configurations, average-condition vehicles, and select EV models. Buyers remained active but disciplined, placing greater emphasis on vehicle condition, trim level, equipment, and expected retail demand when bidding.”