Supply and Demand Shifts in Saskatchewan
In 2025, Saskatchewan’s used car market is expected to see continued easing in pricing, following the national trend, influenced by increased inventory and a shift in consumer focus toward new vehicles. Recently, Canada’s largest automotive marketplace reported that supply of used cars jumped by 28% in 2024, a significant growth in inventory levels compared to the previous years. This growth in inventory is due to supply chain recovery and increased new car availability. Consumers are more inclined to purchase new vehicles, alleviating demand pressure on used cars.
Alongside the increase in inventory boost, declined interest rates on new is also attributed to the surge in new car demands in Canada. New cars became more appealing for consumers as the average interest rate for new car loans fell from 6.2% in November 2023 to 5.3% by June 2024. This in turn, reduced consumers’ demand of used cars.
Pricing Trends
The pricing of used cars in Saskatchewan, like any other province, also saw increased affordability compared to 2023. In June 2024, the average used car price in Canada dropped by 1.1% from the previous month to $36,342, which is an 8.3% year-over-year decline.
This trend is expected to continue as supply begins to rise while demand flattens. Supplies of new cars, too, are significantly higher, rising 70% on a year-over-year basis, driving used car prices even lower. New car prices averaged $66,807 in mid-2024, up just 0.8% when compared to a year earlier. Supplies of used cars are getting better as new car pricing has flattened. Experts believe that 2025 will also be a favorable year for used car buyers and a relatively challenging one for used car dealerships.
For the pre-owned vehicle market, the biggest dive has been for luxury cars, which are down 10% compared to last year. This has made some luxury and premium models accessible to wider audiences.
Key Insights for Pre-Owned Vehicle Sellers and Buyers: For Sellers
Competitive Pricing Pressure: With declining prices, sellers need to be vigilant and work continuously towards competitive pricing adjustments
Shift in Buyer Interest: With wider range of new cars and fallen interest rates, buyers have their interest shifted towards new cars. Sellers may find it challenging to have command of premium pricing
For Buyers
Lower Prices: Buyers can expect more budget-friendly used car options, especially in case of high-end models.
Increased Availability: Greater supply will favor buyers with wider selection, including models that may have been scarce in previous years.
Interest Rate Edge: With the falling interest rates of new cars, consumers have increased options between new and used vehicles.
Village Auto Group’s Approach to Navigating a Shifting Market Landscape
Given the changing trends in the used car market, Scott Heidt, the General Manager of Village Auto Group Saskatoon, outlines a number of strategic steps sellers can take to keep a competitive edge in the market for 2025. His recommendations include Implementing competitive pricing tactics, Leveraging broader financial options, Creating a stronger online presence, through branding as well as inventory management, and Enhancing the overall customer buying experience.
Established in 1973, Village Auto Group has been premium name of quality pre-owned vehicles in Saskatchewan. With three specialized dealerships—Village Auto Sales, Budget Auto Centre, and Platinum Autosport—they have built a reputation for trust and quality, serving thousands of customers throughout Saskatchewan and neighboring provinces.
The decline in sales is particularly noticeable among lower-income consumers, who are more sensitive to borrowing costs and have less disposable income due to spending on basic essentials like housing and food.
Potential Market Revival
However, with the first rate cut in June 2024, some industry analysts also expect possibility of resurgence in used car sales around the end of 2024 and beginning of 2025. This recovery is contingent upon further rate reductions, as major Canadian banks forecast 2 to 3 additional cuts by the end of 2024, with further drops in 2025.
The overall trend signals that the market may regain momentum when the rates normalize and can bring them back to life to benefit both the buyers and the sellers in the Canadian automotive industry.
Conclusion
Moving into 2025, the used car market in Saskatchewan will be shaped by growing supply and reduced prices, especially in the luxury models. While better inventories and lower costs will favor buyers, for sellers, this means increased competition. Staying informed and strategic will be essential for both parties navigating these shifting market dynamics.
