Agile Auto Canadian Auto Market Update 7-24-2026

Canada Economic Conditions

• Canada’s economy is gradually improving after a slow first half of the year, but growth remains modest as businesses continue to navigate trade uncertainty and slower population growth.
• The Bank of Canada held its policy interest rate at 2.25%, signaling confidence that the current rate is appropriate while continuing to monitor inflation and economic growth.
• Inflation is easing toward the Bank of Canada’s 2% target, with June CPI declining to 2.8% and core inflation remaining near target.
• Consumer spending remains resilient, helping support economic growth despite softer business investment and continued trade uncertainty.
• The labor market remains soft, with unemployment holding between 6.5% and 7.0%, creating excess capacity across the economy.
• Housing activity remains below normal but is beginning to stabilize, while business investment is expected to improve gradually through the second half of the year.
• Ongoing U.S. trade policy uncertainty and annual CUSMA reviews remain the largest macroeconomic risks, although Canadian businesses are increasingly adapting to the environment.

Canada Used Vehicle Market Conditions

Retail Market

• • • Used vehicle demand remains healthy, with sales softness driven primarily by affordability rather than a lack of consumer demand.
    • Prime buyers continue purchasing at strong levels, while affordability is limiting activity from subprime customers.
    • Average used vehicle prices remain historically high despite modest year over year declines, keeping monthly payments elevated.
  • Some consumers are shifting from new to used vehicles due to higher new vehicle pricing.

Wholesale Market

• • • Wholesale values are beginning their normal seasonal decline, with price softening accelerating across most vehicle segments.
    • Auction participation remains healthy, but buyers are becoming increasingly selective.
    • Retail ready, well equipped late model SUVs and pickups continue to generate the strongest demand.
    • Average condition vehicles, less desirable configurations, and many EVs are experiencing the greatest pricing pressure.

Dealer Strategy

• Continue prioritizing acquisition quality over acquisition volume.
• Focus on inventory that delivers affordability while maintaining strong retail demand.
• Expect increased wholesale risk on average condition and lower demand vehicles.
• Price vehicles aggressively to market and closely monitor aging inventory as wholesale values soften.
• Use data driven acquisition strategies to identify vehicles with the highest retail demand and lowest ownership risk.