Used car prices across Canada are falling, and for anyone financing a used vehicle in Ontario, that shift matters more than the headline number suggests. According to Clutch’s June 2026 Used Car Pricing Report, 39 of the 50 most popular used vehicles sold in Canada carried lower prices in June than they did a year earlier. There is one clear exception to the trend: used electric vehicles, which are now selling faster than any other vehicle type in the country.

Here is what the current data shows, and what it means for used car buyers and dealerships across Southern Ontario.

Are used car prices going down in Canada in 2026?

For most vehicles, yes. Clutch found that comparable used vehicles, meaning the same model at the same age, cost about 1.3 percent less in June 2026 than they did in June 2025. Prices have held essentially flat since September 2025.

The individual model numbers show the pattern clearly. The Honda CR-V, Canada’s second best-selling used vehicle, dropped 1.9 percent year over year in June. The Honda Civic, fourth by volume, fell 3.8 percent. The Ford F-150, the top seller overall, rose just 0.2 percent from a year ago and slipped 0.4 percent from the previous month.

Clutch chief executive Dan Park described the current stretch as unusual. “This is the first time in a while we’ve enjoyed this kind of price stability for a six-month stretch, so that’s encouraging,” he said. “It’s a good news story for consumers.”

CARFAX Canada’s June 2026 Used Vehicle Market Insights report found a similar plateau. The national average used vehicle listing price reached $31,619 in April, up 0.8 percent from March but down 3.8 percent from a year earlier. CARFAX described prices as having largely leveled off since February after coming down significantly from 2025 levels.

Why are used car prices falling?

The short answer is the economy. Canada recorded two consecutive quarters of negative GDP growth, and that pressure is changing both what Canadians buy and how much they are willing to spend.

Park pointed to the shift directly. “You can see economic softness that is creating less demand overall, and that demand is actually moving towards used vehicles,” he said.

The sales figures show that movement. According to Statistics Canada, used vehicle sales rose 5.8 percent year over year in the first half of 2026, while new vehicle sales fell 5.1 percent over the same period. DesRosiers Automotive Consultants, measuring the full first half, found new vehicle sales down 2.6 percent and used vehicle sales down just 1 percent.

Buyers are also stepping away from premium brands. DesRosiers data shows luxury vehicle market share fell to 12.5 percent in the first half of 2026, down from 14.4 percent in 2024. That shift toward mainstream vehicles is part of what is pulling average prices down.

What falling used car prices mean for financing in Ontario

For anyone financing a used vehicle, a lower purchase price affects the deal in a direct way. The amount financed is the starting point for every calculation that follows. When vehicle prices come down, the principal comes down with them, which reduces both the monthly payment and the total interest paid across the life of the loan. Think of it the same way as a mortgage: the rate gets most of the attention, but the size of the loan does just as much work.

Interest rates are the other half of that equation, and they have been holding steady. CARFAX Canada noted that the Bank of Canada has maintained its key interest rate at 2.25 percent, which means the recent movement in affordability is coming from vehicle prices rather than from borrowing costs.

For used car dealerships across Southern Ontario, in Toronto, Mississauga, Brampton, Hamilton, London, Kitchener, Windsor, Oshawa, Barrie, Guelph and the surrounding markets, this creates a specific situation. Buyer traffic is holding up, since used vehicle sales are growing while new vehicle sales decline, but those buyers are more price-sensitive than they were a year ago. Deals are being decided on affordability, which puts the financing conversation at the centre of the transaction rather than at the end of it.

Consumer sentiment supports that read. A CARFAX Canada survey found 75 percent of Canadians who purchased a used vehicle in the past year believed they received good or excellent value for money, and 65 percent said used vehicle prices were at least somewhat reasonable.

Why are used EVs the exception?

While gasoline vehicles get cheaper, used electric vehicles are moving in the opposite direction. They are selling faster than anything else on the market, and the reason comes down to what Canadians are paying at the pump.

After gas prices surged at the end of February, tied to the conflict between the United States and Iran, Clutch saw EV demand roughly double. “As soon as those gas prices started creeping up, we almost saw a twofold increase in EV demand as a result of that,” Park said.

On Clutch’s own platform, EVs eventually began selling in a median of 11 days, the fastest pace the company has recorded and two and a half times quicker than its gasoline vehicles. Across the used market more broadly, EVs sold in a median of 24 days, six days faster than used gas vehicles and faster than every other vehicle type.

Pricing is part of the appeal. The average price of a used Tesla Model 3 rose 0.3 percent month over month to $28,164 in June, but that figure was down 11.7 percent from a year earlier and roughly $6,000 below the average used vehicle price overall. Nearly 48 percent of used EVs are now selling for under $35,000, and about 60 percent go for under $40,000.

Supply has grown as well. Park pointed to a Tesla production ramp-up in 2022 and 2023 that has significantly increased used EV inventory over the past two years, along with vehicles coming off lease contracts and flowing into the used market.

New EV sales have climbed too. Statistics Canada figures cited by Clutch show new EV sales jumped 74.7 percent year over year in March and 21.2 percent in April, reaching 12.2 percent of new vehicle sales at the spring peak, likely helped by the federal purchase incentive.

Even so, EVs remain a small slice of the used market. On Clutch, EV sales settled at 3.9 percent in June after peaking at 5.7 percent in April. Hybrids accounted for nearly 7 percent, while SUVs made up 63.8 percent of sales.

CARFAX Canada’s data points to the same tension between demand and supply. Among Canadians planning to buy a used vehicle within the next year, 22 percent said they are considering a battery electric vehicle, yet battery electric vehicles made up just 4 percent of used listings in April, and the average used EV listing price rose 4.7 percent month over month to $40,893.

What the wholesale market shows

The trend at auction lines up with what is happening at retail. Canadian Black Book’s Market Insights report for the week ending August 1 found overall wholesale values declined 0.16 percent, an improvement over the 0.32 percent drop recorded the week before. Car segments fell 0.17 percent and truck and SUV segments slipped 0.15 percent, with both outperforming their pre-pandemic seasonal averages for the same week.

Just over 45 percent of segments saw average value movements greater than $100 that week. Auction sale rates ranged from 10.8 percent to 86.9 percent, averaging 46.6 percent. Canadian Black Book noted that auction inventory has returned to typical seasonal levels, though upstream channels continue to get priority access, and demand for high-quality vehicles remains strong on both sides of the border. On the retail side, the average asking price for a used vehicle slipped slightly to $36,900 across approximately 169,000 vehicles listed on Canadian dealer lots.

Is used vehicle supply improving?

Partly. CARFAX Canada reported that used inventory rose 21.6 percent month over month in April as dealers stocked up for the summer selling season. That build did not resolve the underlying shortage, though. Inventory remained essentially flat year over year, a reflection of reduced new vehicle production and lower lease returns earlier in the decade that continue to limit how many vehicles reach the used market.

Transaction volume tells a similar story. There were 254,881 used vehicle transactions in April 2026, up 1.2 percent from March but down 7.2 percent from April 2025.

What to watch through the rest of 2026

Park was clear that the used EV surge is tied to conditions that could change. Consumer demand for EVs is highly elastic to gas prices, and if fuel falls back into the $1.10 to $1.20 per litre range, he expects EV demand to cool with it.

CARFAX Canada also flagged several factors that could shape consumer confidence in the months ahead: ongoing economic uncertainty, the Bank of Canada’s decision to hold its key rate at 2.25 percent, and the upcoming review of the Canada-United States-Mexico Agreement.

For Ontario’s used vehicle market, the practical picture is this. Prices for most vehicles are easing, buyer demand is shifting from new to used, affordability is deciding which deals close, and the one category running against the price trend, used EVs, is being carried by fuel costs rather than by anything structural.

Sources: Clutch June 2026 Used Car Pricing Report via Financial Post (July 23, 2026); The Globe and Mail (August 2026); CARFAX Canada June 2026 Used Vehicle Market Insights via Canadian Auto Dealer (June 17, 2026); Canadian Black Book Market Insights via Canadian Auto Dealer (August 5, 2026).