Canada’s used-vehicle market is facing an unusual contradiction. Despite tariffs, trade tensions, and uncertainty surrounding the automotive industry, substantial numbers of used vehicles continue moving south into the United States, placing additional pressure on a Canadian market already struggling with inventory shortages.
New findings from DesRosiers Automotive Consultants indicate that U.S. used-vehicle imports remained near their 2024 levels throughout 2025, even as trade restrictions complicated cross-border transactions.
However, more recent dealer reports suggest exports have begun slowing in 2026, creating a complicated picture for Canadian dealerships and consumers. With affordable vehicles difficult to source, prices remaining elevated in several segments, and American buyers continuing to compete for Canadian inventory, the consequences extend beyond the border.
Cross-Border Used-Vehicle Trade Remained Resilient in 2025
The latest findings from DesRosiers Automotive Consultants show that U.S. imports of used vehicles in 2025 remained broadly comparable to 2024, despite the introduction of American automotive tariffs. The findings, reported on November 6, 2026, suggest that trade restrictions did not eliminate the financial incentives supporting cross-border transactions. DesRosiers has previously indicated that the great majority of this import stream originates in Canada. However, its publicly reported figures do not provide an exact Canada-only export total for 2025 or establish how many vehicles have crossed the border so far in 2026.
For Canadian dealerships, the consequences are practical. A low-mileage SUV arriving as a trade-in at an Ontario dealership might attract interest from both Canadian retailers and American wholesalers. If the vehicle is sold to a U.S. buyer, it disappears from the domestic inventory pool. Canadian dealerships then compete to replace it through auctions, private purchases, and other trade-ins. That competition can maintain pressure on acquisition costs, even when overall consumer demand begins to soften.
Newer Used Vehicles Account for a Significant Share of U.S. Imports
One of the most revealing findings involves vehicle age. DesRosiers reported that 2023-model-year vehicles represented 20.7% of U.S. used-vehicle imports in 2025, making them the largest individual model-year category. Vehicles from the 2024 and 2022 model years were also prominent. Earlier research examining 2024 imports found that 40.1% were no more than two years old, while another 34.7% were between three and five years old. Although these figures cover different reporting periods, they demonstrate the importance of relatively recent vehicles in cross-border trade.
That concentration matters because newer used vehicles often provide a practical alternative to buying new. A three-year-old crossover may offer modern driver-assistance technology, updated connectivity features, and years of remaining service life at a lower purchase price than its newest equivalent. These are precisely the qualities families and commuters often prioritize. When American buyers compete for the same inventory, Canadian dealerships can face additional difficulty finding vehicles that meet customers’ expectations for age, condition, mileage, and affordability.
Trump’s Automotive Tariffs Have Not Completely Stopped Used-Vehicle Imports
The Trump administration introduced a 25% tariff on covered imported passenger vehicles and light trucks beginning April 3, 2025, under Section 232 of the Trade Expansion Act. U.S. Customs and Border Protection confirmed that the measure also applies to used vehicles, with an exception for vehicles manufactured at least 25 years before their year of entry. This means relatively new vehicles crossing from Canada into the United States are not automatically protected simply because they have already been owned or registered in North America.
However, tariff treatment can vary significantly. Qualifying vehicles under the Canada-United States-Mexico Agreement may receive special treatment allowing the 25% duty to apply only to the value of their non-U.S. content, subject to required approval. Consequently, the effective import cost depends on a vehicle’s origin, its qualifying status, and applicable customs procedures. American buyers must weigh those costs against potential resale margins. The continued movement of vehicles suggests that some transactions remain commercially viable despite these additional barriers, rather than proving that tariffs have had no effect.
The Canadian Dollar Continues to Influence American Buying Decisions
Currency movements have historically played an important role in determining how attractive Canadian used vehicles are to American buyers. AutoTrader has documented an inverse relationship between the Canadian dollar’s strength and used-vehicle exports: a weaker dollar generally makes Canadian inventory more affordable for buyers operating in U.S. currency. The Bank of Canada also identified significant depreciation of the Canadian dollar beginning in late 2024, partly driven by trade uncertainty. Although tariffs reduce the financial advantages of importing vehicles, exchange rates remain an important part of the transaction.
For example, an American wholesaler evaluating a Canadian pickup truck must calculate its purchase price after currency conversion, transportation expenses, applicable tariffs, and resale costs. If the anticipated selling price in the United States still leaves a sufficient profit margin, exporting can remain attractive. Specialized businesses continue supporting this trade. In July 2025, Tricor Automotive Group announced a partnership with Signal Technologies to help Canadian dealerships access American wholesale buyers through a platform handling logistics, regulatory compliance, and remarketing. These services illustrate how established export operations have adapted to increasingly complicated trade conditions.
Pickup Trucks, Luxury Models, and Lease Returns Remain Important
Not every used vehicle has the same appeal in the American market. DesRosiers’ research examining 2024 import patterns found that luxury vehicles, pickup trucks, and off-lease models were disproportionately represented among vehicles entering the United States. Its subsequent analysis of 2025 imports also identified substantial differences between manufacturers, even though overall import volumes remained relatively stable. This suggests that cross-border demand is concentrated in particular brands and vehicle categories rather than being evenly distributed across the entire used-vehicle market.
For Canadian dealerships, this distinction matters considerably. A retailer specializing in compact passenger cars may experience very different inventory conditions from one focused on premium SUVs or full-size trucks. The latter may compete with American wholesalers for certain vehicles, particularly when a desirable model becomes available at auction. However, these patterns are not permanent. Canadian Black Book reported in November 2026 that full-size crossovers and pickups were experiencing downward pressure partly because American buying interest had weakened. The changing demand demonstrates why individual vehicle segments can move in different directions even when broader cross-border trade remains substantial.
Canadian Dealerships Are Still Struggling to Secure Desirable Inventory
Inventory shortages remain one of the most persistent challenges facing Canadian used-vehicle retailers. A DesRosiers and Used Car Dealers Association survey published early in 2026 found that approximately 52% of franchised dealerships and 48.2% of independent dealers reported worsening sourcing conditions during the preceding six months. Independent dealerships were particularly exposed to auction-market conditions, while franchised retailers obtained much of their used inventory directly from consumers. These differences influence how quickly changes in wholesale supply reach individual businesses.
The pressure continued into 2026, although experiences varied. In the association’s summer survey of Ontario dealers, 52.1% of independent retailers reported that sourcing had become more difficult, compared with 48.6% of franchised dealers. Some independent dealerships also reported improvement in securing vehicles between one and seven years old. For a smaller retailer, difficulty replacing a popular model can mean longer gaps between sales and additional money tied up in inventory. Those operational pressures matter because dealerships cannot offer customers vehicles they cannot obtain, regardless of how much demand exists for a particular model.
Pandemic-Era Sales Shortfalls Continue to Limit Used-Vehicle Supply
Canada’s used-vehicle supply problem began well before the latest trade dispute. AutoTrader estimated that approximately 1.5 million fewer new vehicles were sold between 2020 and 2023 than would otherwise have been expected, reflecting pandemic-related production and supply-chain disruptions. Those missing sales are now affecting the second-hand market. Vehicles purchased or leased during that period would ordinarily be returning through trade-ins, lease maturities, and wholesale auctions. Because fewer vehicles entered circulation, the potential supply of relatively young used vehicles is smaller than it would have been under normal conditions.
Canadian Black Book’s February 2026 outlook reinforced those concerns, forecasting a further 2.6% decline in the supply of vehicles aged zero to eight years during 2026. The shortage is particularly difficult to address because it cannot be resolved simply by producing more new vehicles today. Recently manufactured vehicles take time to enter the second-hand market. AutoTrader has warned that these structural constraints could persist into 2027. Continued exports add another consideration: every suitable vehicle leaving Canada further reduces the available domestic inventory within that particular model and age category.
Canadian Used-Vehicle Prices Are Softening, but Affordability Remains Difficult
Despite ongoing supply challenges, recent pricing data suggests the Canadian used-vehicle market is gradually becoming more balanced. CARFAX Canada’s October 15, 2026, market update reported that available inventory reached 228,788 listings in August, an 18.9% increase from the previous month. However, inventory was still 4.6% below August 2025 levels. The national average used-vehicle listing price was $30,776, down 2.7% year over year. Meanwhile, used-vehicle transactions declined 6.6% from the previous August, suggesting softer demand was developing alongside improvements in available inventory.
These findings complicate the idea that exports are necessarily pushing all Canadian used-vehicle prices higher. Cross-border demand can contribute to tight supply without causing national prices to increase every month. Much depends on vehicle type, condition, and consumer demand. SUVs accounted for approximately 56% of used listings in CARFAX Canada’s August data, while used electric-vehicle prices were 5.4% lower than a year earlier. For consumers, lower average prices are encouraging, but they do not guarantee that a particular affordable SUV, reliable sedan, or low-mileage pickup will be easy to find. The availability of desirable vehicles remains uneven across the market.
New Dealer Data Suggests Exports Are Slowing in 2026
Although the DesRosiers findings indicate that cross-border used-vehicle imports remained resilient in 2025, more recent evidence suggests conditions changed during 2026. In a survey covering the first half of 2026, the Used Car Dealers Association reported that 69.7% of franchised new-vehicle dealers and 50% of independent used-vehicle dealers observed a decline in exports to the United States. These figures reflect the experiences of surveyed Ontario businesses rather than verified national export volumes. Nevertheless, they suggest that tariffs and changing market conditions are beginning to reduce the attraction of some Canadian vehicles to American buyers.
Canadian Black Book’s November 4, 2026, report adds further evidence of changing conditions. Its Used Vehicle Retention Index fell to 126.4 points in October, down 7.8% from a year earlier. The company identified weakening U.S. buyer interest as one factor affecting certain vehicle segments, particularly full-size pickups and crossovers. Together, these findings suggest that cross-border trade remains active but is no longer exerting the same pressure across every category. Canadian dealers may be benefiting from reduced American competition in some wholesale markets, even as structural inventory shortages continue.
What Continued Cross-Border Trade Means for Canada’s Used-Vehicle Market
The direction of Canada’s used-vehicle market will depend on several interconnected factors, including American import policies, currency movements, U.S. wholesale demand, and the number of vehicles becoming available domestically. If tariffs continue discouraging American buyers, more Canadian vehicles could remain available for local resale, potentially improving selection and easing pricing pressure. Conversely, renewed American purchasing activity or more favourable exchange-rate conditions could strengthen the export market again. Canadian Black Book has emphasized that the market is becoming increasingly fragmented, with different price trends across vehicle ages, body styles, and powertrains.
For Canadian consumers, the central concern is whether improving market conditions will translate into more affordable and reliable transportation. Additional domestic inventory could give families greater flexibility when replacing aging vehicles, but improved availability does not automatically mean a return to pre-pandemic prices. Dealerships must also contend with the lasting effects of reduced vehicle sales and lease returns. The evidence points toward gradual adjustment rather than an immediate resolution. Tariffs may be slowing the movement of Canadian vehicles south, but the country’s used-vehicle market remains influenced by buyers on both sides of the border.
