Impact of the trade war on used car prices in Quebec

The impact of trade policies on the used vehicle market in Quebec is less about a widespread price surge and more about a shift in the average value of available vehicles.

The trade war between the United States and other countries has led to tariff hikes that directly affect the price of sedans, SUVs, and electric vehicles. Automakers are facing significant consequences, and these increases are affecting the market, making vehicles more expensive for consumers. This article explores how the trade war is reshaping the automotive industry, vehicle pricing, and market forecasts.

Why are vehicle prices increasing?

Vehicle prices are primarily rising due to tariffs and customs duties triggered by the trade war, which have a direct impact on production and importation costs. These taxes make auto parts and the vehicles themselves more expensive to manufacture and import, and the cost is ultimately passed on to the consumer.

Additionally, the pandemic and previous disruptions in supply chains have worsened the situation by limiting vehicle availability and creating a long-lasting supply shortage in the market.

According to an analysis by Les Affaires (2025), tariff increases  on imported vehicles have driven up the average price of used cars by 6.4% in just one year. In other words, this isn’t a “voluntary” price hike by dealerships. Acquisition costs (tariffs, auctions, transportation, currency fluctuations, reconditioning) have risen, increasing the value of inventory vehicles, a trend reflected at the retail level.

In parallel, the average price of new vehicles has climbed by 4.7%, pushing more consumers to turn to the used car market. This heightened demand, combined with limited supply, naturally intensifies pricing pressure in the used vehicle segment.

What types of used vehicles are affected by the price increase?

Recent, well-equipped, and higher-end used vehicles are the most affected by the rise in average prices in Quebec’s market.

The trade war has changed the composition of the used car inventory: the models now available for resale tend to be newer, more expensive, and more sought-after. As a result, the price increase is not uniform across the board, it reflects a growing scarcity of affordable vehicles and a general shift toward higher-value inventory.

Used vehicles with stable prices

The least affected used vehicles are typically those less reliant on imported parts or those with a high proportion of domestic production. For example, older American vehicles from brands like Chevrolet or Ford are less impacted by tariff increases, since a large part of their manufacturing remains domestic.

Similarly, some Korean vehicles, notably from Hyundai or Kia,  have seen more moderate price hikes due to more modest demand. Compact cars and sedans over five years old, like the Toyota Corolla or Honda Civic, continue to offer excellent value and help stabilize the used car market.

Used vehicle prices on the increase

SUVs remain among the most impacted by rising prices due to their sustained popularity and higher import costs. Key models like the Honda CR-V, Toyota RAV4, and Ford Escape have all seen price increases, as have certain electric and hybrid vehicles (e.g., Tesla Model 3, Chevrolet Bolt).

These models, often manufactured abroad, are especially affected by tariffs at the new vehicle level. While used versions may still require imported parts for maintenance, they tend to offer better value for money.

Buying a used car in 2025 still represents a smart choice. Consumers benefit from a lower purchase price compared to new vehicles while accessing reliable, popular models that have already depreciated. Despite the trade war and tariff barriers, purchasing a used vehicle remains a rational and cost-effective option for Quebec families.

How is the trade war affecting the automotive industry and its players?

The trade war launched by the United States under Donald Trump has profoundly reshaped the North American automotive landscape, impacting manufacturers, consumers, and both new and used car dealers.

Rather than causing across-the-board price increases, it has primarily altered supply structures, making the production and importation of entry-level vehicles more expensive.

According to a JP Morgan study, tariffs have led to an average increase of $4,000 in the price of new vehicles. This pricing pressure is driving many buyers toward the used car market, seen as a more affordable alternative.

However, used car prices are also rising, not directly because of tariffs, but because the available inventory consists of newer, better-equipped models, which naturally pushes up average market value.

Impact of the auto market by stakeholder 

Manufacturers : Tariffs imposed by the U.S. and other countries directly raise production costs. In response, automakers are shifting production toward more profitable, better-equipped models, often at the expense of lower-priced compact vehicles. This reduces overall supply diversity and contributes to a higher average market price, without increasing the price of every model.

Consumers: With fewer affordable models on the market, purchasing a new or recent vehicle has become more challenging. Quebec consumers are either extending the lifespan of their current vehicles or shifting to the used market, where vehicles remain more accessible, albeit newer and more expensive to begin with.

A notable example is the declining availability of small economical cars like the Toyota Corolla. If you find one at a good price, now is the time to act, the full impact of rising prices is yet to be felt and will likely become more pronounced over the coming years as affordable inventory continues to shrink.

Even among new vehicles, those already built are seeing moderate price increases. But it’s the 2026 models that will feel the greatest impact, as they will fully absorb the new tariff-related production costs.

New car dealers : Tariffs and rising import costs are dampening demand for new vehicles. Dealerships must adapt, by absorbing part of the cost in their margins, relying on promotional incentives, or shifting their product mix toward more desirable models, particularly hybrids and EVs.

Used car dealers: Demand for used vehicles remains strong, as they offer a more rational alternative to expensive new models. However, the available inventory often consists of newer, better-equipped models, pushing average stock values higher. Buyers are becoming more selective, negotiating harder, and favoring compact or hybrid vehicles that offer a solid value proposition.

What are the consequences for Quebec consumers?

Beyond the numbers, the trade war is reshaping vehicle accessibility for many Quebec families. A car is no longer just a means of transportation, it represents independence, mobility, and financial stability.

Tariffs imposed by US President Donald Trump are undermining that accessibility, particularly for middle-income households. The used market, once considered a budget-friendly option, is now more competitive: affordable models are increasingly rare, and the available vehicles tend to be newer (and therefore more expensive) to begin with.

This shift is forcing consumers to reassess their priorities, consider trade-offs in vehicle type, or keep their current cars longer, sometimes at the expense of comfort or safety.

Why opt for Automobile En Direct during this period of Canada-US tariff barriers?

In a climate where the trade war is creating new tariff barriers, every dealership must manage a reduced inventory. Automobile En Direct stands out by offering Quebec consumers concrete and accessible solutions.

The new and used car sectors are going through a difficult period marked by higher importation costs, plant closures, and job losses in both Canada and the United States. Thanks to our experience and financial stability, we maintain a large inventory of used car adapted to every situation, even during economic uncertainty.

We support you from your initial purchase to auto financing, with solutions that fit your budget (2nd and 3rd chance financing). Each used vehicle is inspected and certified to guarantee a reliable and durable product, despite pressure on supply chains.

With Automobile En Direct, you avoid unpleasant surprises and enjoy a safe car at a good price, even in the face of fluctuations in the North American dollar and increased tariffs at the U.S. border. It is this combination of transparency, rigor, and customer support that makes all the difference in these tense times.