As originally appeared in Authosphere, April 22, 2026.
Author: Huw Evans
Dealers are facing a unique environment today when it comes to used vehicles
There’s no question that the 2020s are so far, turning out to be a highly unpredictable decade. For dealers, trying to navigate through the uncertainty of the COVID-19 pandemic, the rapid rise in interest rates to combat inflation, and then the issue with tariffs and trade disputes—plus most recently. the erupting conflict in the Middle East that’s again impacting oil prices and global supply chains—has resulted in an operating environment that can best be described as challenging.
Sourcing inventory
When we look at used cars, traditionally an area of dealer operations that can serve them well in both good times and bad, this decade has also witnessed its fair share of unpredictability. Today, a key issue for many dealers is sourcing used inventory.
Brent Ravelle, President of the Ravelle Group of Companies which owns multiple rooftops in Ontario, says that in his case, lack of available inventory from trade ins, and strong competition, is making it harder to source good quality used vehicles. With multiple stores in one municipality, Ravelle says he’s been focused on consolidating used car operations from different dealerships into a combined group.
Additionally he’s created a new role within this combined used car group to handle pre-owned inventory. This means managing the flow of used vehicles coming in, including what’s purchased, what is wholesaled and how quickly these vehicles can be reconditioned and prepared for resale on the lot.
Ravelle says that by focusing on having a specific group among his stores tasked with the responsibility for used vehicles, it prevents internal competition for used cars between dealerships within the group, which could limit choice and purchase options for consumers.
Competition
Additionally, Ravelle says that some Canadian dealers are finding it hard to source good inventory, particularly for vehicles manufactured in North America that are subject to the terms of the CUSMA agreement, because they are still competing with U.S. buyers for a relatively small pool of used cars. Additionally, there are still low volumes of lease returns, which were decimated during the COVID-19 pandemic when OEMs idled production, stunting sales for new cars from 2020 through 2023.
Yet there are signs that the market is beginning to stabilize. Data from AutoTrader is showing that in 2025, both the new and used vehicle segments performed relatively well. “We saw growth in both segments,” explains Baris Akyurek, Vice President, Insights and Intelligence at AutoTrader, “particularly in the first half of the year as consumers sought to take advantage of buying new vehicles before tariffs began impacting prices.”
On the used side, while prices have been trending downward overall since the early part of the decade (around 10% since 2023 to an average of $36,816),in 2025 the announcement of U.S. trade tariffs impacted pricing, bumping used car values up by approximately $800 during the course of the year. This represented a reversing of the typical 12-month trend in which used prices tend to start at higher levels and trend downward during the course of the year.
As we enter further into 2026, Akyurek says that there are indicators to show that used car prices are likely to remain relatively flat, at least through the end of 2027. “We don’t forecast a significant decline in prices because inventory is scarce,” he says. “Yes, there is inventory out there but still, compared to what it was pre-pandemic it is much less, because there were fewer new cars sold between 2020 and 2023 and we expect that dynamic to continue at least through until next year.”
We don’t forecast a significant decline in prices because inventory is scarce. – Baris Akyurek, Vice President, Insights and Intelligence, AutoTrader
Stabilizing depreciation
At LGM Financial Services, Jake Stacey, Executive Vice President, OEM Sales and Performance, concurs, noting that prices have and will continued to be constrained by used inventory levels. That said, she expects depreciation to stabilize, so the sky high used prices we saw during the COVID-era aren’t likely to return. Nevertheless, she urges franchised dealers to exercise caution when buying inventory and should focus on “streamlining and closing the gap between their new and used vehicle operations.”
Additionally, depending on where they are located, dealers can experience different scenarios related to used vehicles, driven not only by consumer preferences but taxation and regulatory requirements. “More than ever, dealers need to adjust their buying habits, not only to regional differences in consumer demand but what’s going on [specifically] in their market.” Stacey also notes that an additional challenge is that an entire generation highly experienced in purchasing vehicles for dealers retired during the pandemic and that’s expertise that has been lost.
That’s why, she says, sourcing the right inventory is critical.”You have to price it dynamically. You have to turn your vehicles quickly. You have to have a good staff, and you have to have a great customer experience—meaning it can’t be any different than it is on the new car side.”
Hybrids and EVs
A big question for many Canadian dealers is the used market surrounding EVs and hybrids. At AutoTrader, Baris Akyurek notes that interest on EVs has been particularly focused around incentives, and now with the Government of Canada announcing a new round of incentives, consumer interest in battery electric vehicles is trending upwards again.
On the used side however, Akyurek says he’s seen notable declines in pricing on battery electric vehicles, since range anxiety and infrastructure challenges still remain. Hybrids on the other hand, continue to see strong demand. “Pricing has been pretty stable,” he says, acknowledging for a good deal of the consumer base in Canada, hybrids represent the best of both worlds, offering electric propulsion in urban settings, and then having the advantage of ICE combustion engine power and range when needed.
Plus with the recent crisis in the Middle East impacting oil prices, traction and interest around hybrids ( both new and used) is only like to grow in the coming months. At LGM Financial Services, Jake Stacey agrees. “Consumers are saying they want to save at the pump, but many aren’t ready to make the switch to full battery electric. They want a vehicle that represents the best of both worlds and I would say, that family-oriented hybrids, such as small and mid-size SUVs are where the market is likely going to be.”