Canadian Wholesale Used Vehicle Market: Turning the Corner as Tariffs Cool

Canadian Wholesale Market Experiences a Turning Point Amid Tariff Easing

The Canadian wholesale used-vehicle market has reached a notable inflection point, demonstrating signs of stability after a tumultuous period dominated by tariffs. The latest data from Canadian Black Book indicates that the Used Vehicle Retention Index rose slightly to 140.4, reflecting a modest 2% improvement over the previous year. According to David Robins, the senior manager and head of Canadian vehicle valuations at Canadian Black Book, the market is returning to typical seasonal trends as it navigates out of the tariff frenzy.

Understanding the Changing Landscape of Used Vehicle Values

The Used Vehicle Retention Index is vital as it gauges the wholesale average value of 2-6-year-old vehicles as a percentage of their original MSRP. This index has shown a steady increase since July, with exceptions following announcements of tariffs, notably when they surged in January 2021. As of now, the wholesale values are decreasing at expected seasonal rates, indicating a return to normalcy.

The Auction Market and Its Implications for Dealers

Recent reports noted that Canadian auction rates have dropped to their lowest levels of 2025, with an average sale rate of 37.4% as of June 3. This decline, coupled with stable supply levels, points toward navigating adjustments in the market that adversely affect dealers. With the auction sale rates fluctuating significantly, ranging from 23.5% to 69.3%, it indicates a potential opportunity for dealers to acquire vehicles at more favorable prices.

Trends in Vehicle Categories: What to Keep an Eye On

Delving into the specifics, trucks and SUVs experienced an overall decrease of 0.21% in value, while a few segments, such as midsize crossover SUVs, managed minor gains. This highlights a shift in consumer preference that may offer insights for dealership inventory strategies. Additionally, the average retail listing price of used vehicles rose to $38,300, up $200 for the week, showcasing the potential for profit if pricing strategies align with consumer demands.

Market Stability Reflected in U.S. Trends

Interestingly, the U.S. market is also experiencing a cooling trend, with used vehicle values dropping by 0.25%, aligning with typical seasonal patterns. This synchronization between the Canadian and U.S. markets could suggest a collective easing as it relates to tariff pressures. Dealerships should observe these trends to adapt their sales approaches and inventory management strategies.

The Road Ahead: Preparing for a Transformed Market Landscape

As the market continues to stabilize, dealers will need to adopt flexible strategies to navigate the evolving landscape. Understanding these dynamics will be crucial, especially with auction sale rates and wholesale values shifting. The return to normalcy offers an opportunity for dealerships to recalibrate their approaches in order to optimize sales and marketing efforts.

For dealership owners and GMs, staying informed about these trends provides the necessary foundation to make strategic decisions about inventory procurement and pricing. As the Canadian used vehicle market turns a corner, the ability to leverage data and trends into actionable strategies will be key to success.