"Prices dropped, so isn't now the time to buy?"
I've been seeing a lot of headlines lately about used car prices finally coming down in Canada.
And honestly, as someone who's been refreshing AutoTrader way too many times a day, that news hits different.
I've had my eye on a used Tesla Model Y for a while now.
The range works for me, the practicality is there, and the long-term savings on gas make the math feel reasonable. A decent used one is sitting around CA$40,000 right now — which, compared to where things were a couple years ago, finally feels like it's in realistic territory.
But I haven't pulled the trigger.
And it's not just gut feeling. The more I look at what's actually happening in the market,
the more I think waiting is the right call — not just for me, but for a lot of buyers right now.
Here's why.
Let's Look At The Numbers First
The "prices are down" narrative is technically true. But the context matters a lot.
Used car prices in Canada peaked at around $38,097 in June 2022, driven by pandemic-era supply shortages and a surge in demand.
By the end of 2025, AutoTrader's official Q4 Price Index puts the average used vehicle price at $35,201 .
So yes, prices have come down from the peak.
But here's the framing I keep coming back to:
before the pandemic, in February 2020, the average asking price on AutoTrader Canada was around $27,000.
Even accounting for general inflation since then, a reasonable "normal" price range would land somewhere around $31,000–$34,000. We're still sitting noticeably above that.
So the more accurate way to read the market isn't "prices are down." It's that prices that were abnormally inflated are slowly correcting — and that correction isn't finished yet.
The Real Reason I'm Not Buying Yet
Pandemic-era prices got pushed to artificial highs, and they've been coming back down — but that process isn't complete. Which means the same make, model, year, and mileage can show up at very different prices depending on the seller, the timing, and how quickly they've adjusted to where the market actually is right now. That kind of spread doesn't happen in a settled market.
Tesla is a good example of why this matters.
Over the past few years, Tesla has made multiple price adjustments to the Model Y, significantly lowering prices from their peak levels.
When new car prices move aggressively like this, used prices tend to follow — but not immediately.That adjustment ripples through the used market over several months. Which means if you bought a used Model Y before one of these pricing shifts fully worked its way through the market, you likely paid more than someone buying the same car a bit later.
This isn't just a Tesla story. It's the dynamic playing out across the whole used car market right now.
New car pricing keeps shifting the baseline, and every time it does, the used market has to recalibrate.
AutoTrader's own analysis notes that the structural supply challenges from COVID-era manufacturing disruptions are unlikely to resolve before 2027.
So the honest answer to "is this the floor?" is:
nobody really knows.
And buying a $40,000 car when you can't answer that question confidently is a tough spot to be in.
Three Reasons To Wait If You Can
Supply is still catching up
Used inventory has been tight for over a year, largely because 1.5 million fewer new vehicles were sold between 2020 and 2023.Those missing vehicles are now slowly making their way into the used market.
More supply means more options, more negotiating leverage, and generally better conditions for buyers. That process takes six months to a year to fully show up in prices — and we're in the middle of it.
Q4 is consistently the best time to buy
This one is just a reliable pattern.Dealers have annual targets. When October hits and they're behind, that pressure turns into real incentives for buyers.
I'd rather be sitting across from a dealer who needs to move a car in November than one who's comfortable in April. Same car, same condition — completely different leverage.
The tariff situation is still unsettled
The "tariff rush" that pushed buyers to accelerate purchases earlier in 2025 has wound down, leaving the market in a stabilizing phase.But the broader trade environment is still shifting. A few months from now, the picture could look meaningfully different.
I watched a few people around me panic-buy during that tariff rush in early 2025.
Looking back, most of them paid more than they needed to.
That's a lesson I'd rather learn from watching someone else than from my own bank account.
If you have the flexibility, waiting for the market to settle a little more — and timing a Q4 purchase — is a genuinely smart play.
That's what I'm doing. And I think the data backs it up.