If you’re buying your first vehicle or you don’t know a lot about cars, it can be hard to choose a car. One of the most important things to consider when purchasing one is price. However, car prices can vary greatly in Canada, from cheaper second-hand models to more expensive new ones. To ensure you’re not overpaying and landing yourself in more debt, here’s the average price of a car in Canada.
Key Takeaways
- The average new car price in Canada is $67,259, a 14% increase from the previous year.
- The average used car price in Canada is $36,863.
- Supply chain issues, low production, and high demand have contributed to rising car prices in Canada.
What Is The Average Price Of A Car In Canada?
When you buy a car, price shouldn’t be the only factor you consider. However, it is definitely an essential element for most people, so here’s a breakdown of the average prices for some of Canada’s most popular new and used cars in 2024:
Average Price Of A New Car In Canada
Even though new cars can range greatly in price depending on the make, model, and features, recent studies have shown that the average prices for them have been steadily climbing over the past few years. According to the AutoTrader Price Index report, $67,259 (Q4 2023), is the average price of a new car in Canada (that’s a 14% increase from the same time last year).
Additionally, the newer a car is these days, the more expensive repairs and even basic maintenance are likely to be, at least for issues that aren’t covered under warranty.
Average Price Of A Used Car In Canada
As of The average price of a used car in Canada sits at $36,863, according to the AutoTrader Price Index report. Depending on the make and model of the car, the average prices of used cars can vary heavily with some ranging around $20,000 and others at $80,000.
Average Price Of A Car In Canada By Car Type
| Average Used Car Price | Average New Car Price | |
| Toyota RAV4 | $42,493 | $32,927 |
| Honda Civic | $36,028 | $17,471 |
| BMW X5 | $104,579 | $50,209 |
| Ford F-150 | $74,846 | $41,140 |
| Mercedes C-Class | $$81,829 | $$38,038 |
Why Are Cars So Expensive And Increasing In Price?
Here are some reasons why cars have become so pricey in Canada:
- Supply Chain Issues – Over the last few years major delays and inflation among manufacturers has driven the average cost of a car and financing up. Although experts speculate that prices will even out over time, it could take a while, so keep your expectations realistic when buying a car.
Less Production, Increased Demand For Cars – Since a lot of manufacturers have been experiencing supply chain issues, fewer new vehicles are hitting the showroom floor. This, coupled with rising prices has prompted many buyers to enter the used vehicle market instead, which has increased prices there too.
How To Find A Low-Priced Car
Whether you’re thinking about buying a new or used car, from a dealership or a private sale. There are several things you can do to keep prices as low as possible, including:
Do Your Research And Negotiate
Start by researching car prices and market values. Many factors can change the price of a car, so it’s best to understand MSRPs (manufacturer-suggested retail prices). Some dealers and private sellers will also be open to negotiation if you offer a down payment or have good insight.
Get Pre-Approved
If you plan on financing your car with a loan, it’s smart to get pre-approved by several dealerships and lenders. Pre-approvals should be free and have no obligation. This way, you’ll have a basic idea of the terms and interest rates you’re eligible for. Shopping around can give you more negotiating power too.
Consider A Used Or Smaller Car
Most vehicles depreciate rapidly in value as soon as they leave the dealership parking lot. So, to counteract that, choosing a smaller and more economical car could be the way to go. Not only can this help you get a lower price, but you could also save money on gas, repairs, and maintenance.
Avoid These Car Add-Ons
If you buy from a dealer, they may try to sell you on additions and customizations that are unnecessary or overly expensive, such as:
- Rust Proofing & Paint Protection – Most cars come with these types of factory treatments, so your paint should last if you take care of it. Plus, there are way more affordable rustproofing services available outside of a dealership.
- Bundled Insurance – Some dealers also try to sell their own insurance to “protect” things like tires, rims, and key protection. Many people find these policies useless, especially when there are better insurers out there.
- Extended Warranties – While longer warranties can be useful in specific cases, most only cover factory-related problems. For example, defects that don’t fall under the manufacturer’s warranty. Wear-and-tear usually isn’t covered.
- Tire/Wheel Packages – Dealers may sneak upgraded tire and wheel fees into their prices. Unless you want them, be sure your car has the original wheels before you buy it. You can get better prices elsewhere if you need.
- Bull Bars, Roof Racks & Tow Bars – If you want these types of additions, you’re probably better off buying them from an aftermarket or specialized parts dealer. Unless the dealership is offering you a really big discount.
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How To Finance A Car In Canada
In Canada, you may have multiple options when it comes to financing a car, such as:
Dealership In-House Financing
Most auto dealers offer financing plans that you can arrange through their company or a third-party lender they work with. If you qualify for a good term and rate, this can be an easy way to make the average price of a car more affordable and maybe score a few perks. Remember to negotiate and compare their plans to other sources of financing.
Car Loan From A Bank, Credit Union Or Alternative Lender
Financial institutions and private lenders are two other places where you can apply for a car loan in Canada. Banks and credit unions are good options for consumers with fair to good credit. While alternative lenders are an ideal option for consumers who struggle with their credit.
Personal Loan
Personal loans are available through most lenders. While some personal loans are unsecured, making them tougher to qualify for, you can get a good term and rate by having strong finances and good credit. If you have bad credit but enough income to make payments, you may still qualify for a personal loan, only at a higher interest rate.
Don’t Know How Much Car You Can Actually Afford?
Even though cars seem to be in shorter supply these days, there are still plenty of good deals you can get if you shop around and know what you’re looking for. Owning a car is an expense, there is no way around it for most Canadians. Figure out your budget, save up for a sizeable down payment, and make sure your credit is in good shape. This is the best way to make sure you’re purchasing a vehicle you can afford.
Average Price Of A Car FAQs
How can I get the best deal on a new car?
- Negotiating with the dealer/seller
- Offering a down payment (20% or more is recommended for the best rates)
- Choosing a more economical vehicle
- Getting pre-approved with multiple lenders/dealers
- Check out special offers and incentives from manufacturers (ex: 0% financing)
