When buying a car in Canada, resale value is a critical factor to consider. It’s not just about the sticker price - it’s about how much of that investment you’ll recover when it’s time to sell. Here’s the key takeaway: vehicles with higher resale value can save you thousands over time by reducing ownership costs.
Key Points:
- Resale value refers to the percentage of a car’s original price retained after a set period (e.g., 3–5 years). For example, a $40,000 car sold for $20,000 after 5 years has a 50% resale value.
- Cars like the Toyota Tacoma (64.1% after 5 years) hold their value better than others, such as the Tesla Model 3 (37.3%).
- Depreciation is the main reason cars lose value. Most cars lose 15–20% in the first year and 50–60% over five years. However, recent supply shortages have slowed this to around 45% for many models.
- Trucks, SUVs, and hybrids generally perform better in resale markets due to their utility and reliability. For example, the Toyota Tundra retains 75.9% of its value after 4 years.
- Maintenance and usage play a significant role. Regular servicing, low mileage, and winter protection (like rust-proofing) can boost resale value.
Quick Tips:
- Research depreciation rates before buying. Tools like Canadian Black Book can help.
- Choose high-retention brands like Toyota, Honda, or Subaru.
- Factor in total ownership costs, including depreciation, fuel, insurance, and maintenance.
- Protect your car’s condition with regular maintenance and rust-proofing.
- Buy smart: Negotiate close to dealer cost to minimize depreciation losses.
Why it matters: In 2025, the average used car price in Canada is $37,590, reflecting tight supply and high demand. By prioritizing resale value, you can make smarter financial decisions and reduce long-term costs.
Used Car Market in Canada I Best Cars under $20,000 I Toyota, Honda or Hyundai??
How Car Depreciation Works in Canada
Getting a handle on how depreciation plays out over time can help you make smarter decisions when buying a car and prepare for the financial realities of vehicle ownership.
The Depreciation Timeline
New cars lose value quickly at first, followed by a slower decline. For example, a CA$40,000 car might drop to CA$32,000–CA$34,000 after just one year and settle around CA$22,000 after five years under current conditions.
However, recent supply chain issues have shaken up these patterns. Many cars now lose closer to 45% of their value over five years, compared to the historical range of 50–60%. After the five-year mark, depreciation slows significantly. Vehicles known for their reliability tend to hold their value better, making them appealing for buyers planning to keep their cars long-term.
Now, let’s dive into how different types of vehicles experience depreciation.
Depreciation Rates by Vehicle Type
Not all vehicles lose value at the same pace. Knowing these differences can save Canadian buyers thousands of dollars over the life of their car.
SUVs and trucks tend to hold their value better than sedans. For example, the Toyota Tundra has a projected four-year retained value of 75.9%, earning it recognition from Canadian Black Book as a top full-size pickup in 2025. Similarly, the Toyota RAV4 leads in both sales and resale value among compact crossovers, making it a top pick for buyers focused on long-term value.
Electric vehicles (EVs) show mixed results in the Canadian market. While some electric cars are starting to retain value better, electric crossovers still face challenges with resale value. On the other hand, hybrids and plug-in models often perform better, as consumer trust in these technologies grows.
Premium sports cars can surprise buyers with their resilience. Take the Chevrolet Corvette - it loses only about 27% of its value over five years and regularly appears in "best resale value" lists.
Here’s a breakdown of depreciation trends across key vehicle types in Canada:
| Vehicle Type | First-Year Loss | Estimated Five-Year Retention | Top Canadian Examples |
|---|---|---|---|
| Full-Size Trucks | 15–20% | Approximately 55% (75.9% for Tundra) | Toyota Tundra, Ford F-150 |
| Compact SUVs | 15–20% | Approximately 55% | Toyota RAV4, Honda CR-V |
| Midsize Sedans | 15–20% | Around 50% | Toyota Camry, Honda Accord |
| Premium Sports Cars | 15–20% | About 73% (e.g., Corvette retains ~73%) | Chevrolet Corvette |
Market Trends Affecting Depreciation in 2025
Several factors are shaping how vehicles depreciate in Canada, creating both challenges and opportunities for buyers.
Economic influences like rising interest rates, inflation, and lingering supply chain issues continue to impact car values. For instance, the average listing price for used vehicles hit CA$37,590 in October 2025, reflecting these broader pressures.
Shifts in consumer preferences are also creating clear winners and losers. Prestige luxury cars, compact cars, and premium sports cars have seen some of the sharpest value declines. Meanwhile, full-size cars and full-size luxury crossovers have gained a slight edge, reflecting Canadians’ preference for larger, versatile vehicles that handle a variety of driving conditions.
Currently, the average retained value for 2025 models sits at 67.5% after four years - an improvement from the previous year but still below the 80% peak seen in 2022 during the height of supply shortages. This stabilizing trend suggests the market is normalizing, but buyers can still benefit from slower depreciation compared to pre-pandemic times.
For Canadian car buyers, these trends highlight the importance of choosing vehicles that align with current market dynamics. It’s also worth keeping an eye on policy changes, such as EV incentives and emissions regulations, which could influence future resale values. Factoring depreciation into your overall car-buying strategy remains a smart move.
What Affects Your Car's Resale Value
Understanding the factors that influence your car's resale value can help you protect your investment. These elements build on the depreciation trends discussed earlier.
Brand Reputation and Reliability
The reputation of a car brand plays a big role in its resale value. Buyers often look for vehicles known for reliability and low ownership costs over time. Take Toyota, for instance - it’s a standout in Canada's resale value market. In fact, Toyota earned the most awards in the Canadian Black Book's 2025 Best Retained Value Awards, thanks to its proven track record for long-term reliability. Honda also benefits from a similar reputation, with models like the Civic and Accord holding an impressive 51.5% of their original value after five years.
Luxury brands, however, show mixed results in Canada. For example, the Lexus UX retains 47.8% of its value, while the Lexus NX holds onto just 43.5%. On the other hand, brands with weaker reliability or limited service networks tend to depreciate more quickly. For Canadian buyers, choosing a brand with a strong reputation for dependability can make a big difference.
Vehicle Type and Features
The type of vehicle and the features it offers also impact resale value. Trucks and SUVs typically perform better in resale markets, largely because Canadians favour their utility and ability to handle winter conditions. For example, as previously noted, midsize pickups and compact SUVs often show strong resale performance.
Specific features like all-wheel drive (AWD) and hybrid powertrains can further increase a vehicle's value. AWD vehicles are especially desirable in Canada, given the challenges of winter driving. They tend to retain 5–10% more value than front-wheel-drive models. Subaru’s AWD vehicles, for instance, are particularly popular in harsher climates. Hybrid systems can also enhance resale value - take the Toyota RAV4 Plug-in Hybrid, which retains 54.0% of its value.
However, fully electric vehicles currently lag behind hybrids and gas-powered options in resale value. For example, the Tesla Model 3 retains only 37.3% of its value, and the Porsche Taycan fares slightly better at 39.4%.
| Vehicle Type | 5-Year Resale Value | Top Canadian Example |
|---|---|---|
| Midsize Pickup | 64.1% | Toyota Tacoma |
| Compact SUV | 54.4% | Honda CR‑V |
| Plug-in Hybrid SUV | 54.0% | Toyota RAV4 Plug‑in Hybrid |
| Electric Sedan | 37.3% | Tesla Model 3 |
Additionally, certain trim options and winter-ready features - like heated seats, remote start, and winter tire packages - make vehicles more appealing in the Canadian market. However, overly expensive or highly specialized features may not yield a strong return on investment.
Maintenance and Ownership History
How well a vehicle has been maintained is one of the most controllable factors affecting its resale value. Cars with a complete maintenance history tend to hold their value better. Regular oil changes, timely brake and tire replacements, and addressing recalls promptly all contribute to a higher resale price. Keeping detailed service records, repair receipts, and documentation of any accidents can make a big difference when it's time to sell.
Low annual mileage and an accident-free history are also key. Vehicles driven fewer than 20,000 kilometres per year generally command higher prices. However, winter driving in Canada introduces unique challenges. Signs of rust, undercarriage damage, or corrosion from road salt can significantly reduce resale value. To protect your car’s worth, consider rust-proofing treatments and regular undercarriage cleanings.
For maximum resale value, it’s a good idea to have your vehicle serviced at an authorized dealership. Official service records provide buyers with extra confidence about the car’s upkeep.
Lastly, using tools like Price Driven can help you access transparent pricing and market data to identify vehicles with strong resale potential.
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How to Include Resale Value in Your Car Purchase
Making resale value a part of your car-buying strategy can lead to significant long-term savings. Here's how you can factor it into your decision-making process.
Research Depreciation Rates
Before buying, explore depreciation trends using tools like Canadian Black Book and CARFAX Canada. These resources provide accurate data on how vehicles retain their value over time. For instance, the Toyota Tundra has demonstrated an impressive retention rate of approximately 75.9% after four years.
You can input details like the make, model, year, and anticipated mileage to get a clear picture of expected depreciation. To make a well-informed decision, examine trends over several years to identify whether a vehicle's resale value is improving or declining.
Calculate Total Cost of Ownership
Understanding the total cost of owning a vehicle goes beyond just its purchase price. Start by calculating depreciation. For example, a CA$40,000 car retaining 70% of its value after four years would have an estimated resale value of CA$28,000, resulting in a depreciation cost of CA$12,000.
Next, factor in operating expenses. Suppose annual costs include CA$1,500 for insurance, CA$1,800 for fuel, and CA$1,000 for maintenance - totalling CA$4,300 per year. Over four years, these costs add up to CA$17,200. Combined with depreciation, the total cost of ownership for this vehicle would be CA$29,200.
Don't forget to include additional Canadian-specific expenses like financing costs, registration fees, winter tires, and rust protection treatments. This comprehensive approach ensures you have a clear understanding of your overall investment.
Use Price Driven for Market Data
Price Driven is a valuable tool for accessing transparent invoice pricing and pre-negotiated deals, helping you minimize the portion of your purchase price exposed to depreciation. Their free discount reports reveal dealer costs and factory incentives, making it easier to compare purchase prices and assess resale potential.
By negotiating closer to the dealer's cost instead of paying the full MSRP, you can significantly reduce your long-term depreciation expenses. According to user reports, Price Driven has helped buyers save an average of over CA$700 on new car purchases.
Take a look at this comparison of two vehicles with different retention rates:
| Calculation Step | Example Vehicle A (65% retention) | Example Vehicle B (70% retention) |
|---|---|---|
| Purchase Price | CA$35,000 | CA$40,000 |
| 4-Year Resale Value | CA$22,750 | CA$28,000 |
| Depreciation Cost | CA$12,250 | CA$12,000 |
| Annual Operating Costs | CA$4,200 | CA$4,500 |
| Total 4-Year Cost | CA$29,050 | CA$30,000 |
This table highlights how resale value and operating costs can impact your overall expenses, helping you make a more informed choice.
Canadian Car Market Trends for 2025
The Canadian automotive market is undergoing significant shifts, and these changes are directly impacting vehicle resale values. Building on earlier discussions about depreciation, it’s clear that staying informed about market dynamics is essential for making smart decisions.
Changes in Consumer Preferences
In Canada, there’s a growing preference for SUVs, hybrids, and electric vehicles, while traditional passenger cars are steadily losing popularity. This shift has created a noticeable effect on resale values. Utility vehicles and electrified options are now fetching higher prices in the used car market.
Models like the Ford F-150 and Toyota RAV4 continue to dominate the used vehicle market. These vehicles reflect Canadians’ love for trucks and SUVs, which tend to hold their value better than sedans.
The story of electrification is a bit more complex. Hybrid vehicles are showing strong performance in terms of resale value, but fully electric vehicles are experiencing different depreciation trends. For example, changes to provincial programs like Québec's Roulez vert have encouraged some buyers to opt for nearly-new electric vehicles instead of brand-new ones. This shift has increased demand - and prices - for used EVs.
Economic and Policy Factors
Economic conditions and government policies are playing a big role in shaping the market. Rising interest rates, inflation, and regional economic differences are all contributing to higher used car values. In provinces like Alberta and British Columbia, where trucks and SUVs dominate, the average price for used vehicles has climbed above $37,000. Higher borrowing costs have also pushed more buyers into the used car market, keeping resale values robust across most vehicle categories.
Supply chain issues continue to affect prices nationwide. By June 2025, the average price for a used car in Canada had reached $33,868. This marks a recovery from the market correction seen in 2024 and signals a return to the higher pricing trends of the post-pandemic period.
On the other hand, Atlantic Canada and Québec offer more budget-friendly options, with a higher proportion of used cars and SUVs priced under $15,000 and $20,000, respectively.
Environmental policies and stricter emissions standards are also influencing resale values. Hybrids and electric vehicles are benefiting from these changes, as their long-term resale prospects improve. However, older and less fuel-efficient models may face declining demand due to these regulations.
Supply and Demand Changes
Production cuts from the pandemic era are still affecting the market in 2025. Fewer new vehicles and lease returns from 2020 to 2022 have led to a scarcity of late-model used cars. This limited supply is keeping depreciation rates lower than historical averages.
Currently, the average retained value for vehicles after four years is 67.5%, a drop from the pandemic peak but still higher than pre-pandemic norms, which sometimes reached 80%. While the market shows signs of stabilizing, well-maintained vehicles in popular categories are holding their value better than before.
The shortage is most noticeable in the nearly-new vehicle segment. Reduced lease returns and lower production volumes have made late-model used cars scarce and expensive. This trend is sustaining higher prices and lower depreciation rates, particularly for high-demand models like SUVs and electric vehicles, which bodes well for current owners.
However, the supply situation varies across different vehicle types. While some segments are starting to see inventory levels return to normal, trucks and SUVs remain in short supply. This tight inventory keeps resale values high for these categories.
Making Resale Value Work for You
Resale value isn't just a buzzword; it’s a powerful tool to reduce your overall ownership costs. By understanding how resale value works, you can turn car buying into a smart, long-term investment rather than just a one-time expense. Here’s how.
A vehicle that holds onto more of its original price lowers your total cost of ownership. Think of it this way: when you consider how much your car will be worth a few years down the road, you're planning for future savings instead of focusing solely on the sticker price today.
Start by making informed decisions. Vehicles from brands like Toyota, Honda, and Subaru are known for their strong resale values. On average, models from these brands retain 67.5% of their original MSRP after four years. Take the Toyota Tundra, for instance - it boasts an impressive 75.9% retained value after four years. Services like Price Driven can also help Canadian buyers save big, offering transparent invoice pricing and pre-negotiated deals that save customers over CA$700 on average. A lower upfront cost means less money lost to depreciation, which improves your financial outcome over time.
Choose a vehicle that fits your needs and suits the Canadian market. Features like all-wheel drive and advanced safety systems tend to hold their value better, especially given Canada’s climate and road conditions. SUVs and trucks remain top choices in the resale market. To maximize resale value, keep up with regular maintenance and ensure you have detailed service records. Buyers are often willing to pay more for well-maintained vehicles with a documented history. Opting for popular colours and avoiding overly niche features can also make your car more appealing to a wider audience when it’s time to sell.
In today’s market, resale value matters more than ever. With the average price of used vehicles hitting CA$37,590 in October 2025, making smart initial choices can pay off significantly. Supply chain issues and economic uncertainties further highlight the importance of planning ahead. By focusing on resale value from the start, you can protect your investment and come out ahead when it’s time to upgrade.
FAQs
How does a vehicle's resale value influence the total cost of ownership?
A car's resale value is a key factor in calculating its total cost of ownership. Cars that hold their value well allow you to recoup a larger portion of your initial investment when you decide to sell or trade them in. Over time, this can translate into noticeable savings.
When you're in the market for a new car in Canada, it's worth paying attention to what influences resale value. Things like the brand's reputation, the vehicle's reliability, how fuel-efficient it is, and overall market demand can all play a role. Focusing on resale value can help you make a financially sound choice and keep your ownership costs in check.
Why do trucks and SUVs tend to hold their value better than sedans in Canada?
Trucks and SUVs tend to hold their value better than sedans in Canada, largely because they align so well with Canadian lifestyles. With features like towing capacity and spacious cargo areas, they’re perfect for activities like camping, hauling gear, or tackling snowy winters.
Another key factor is demand. Trucks and SUVs are consistently popular in the Canadian market, which helps maintain their resale value. Plus, their durability and capability to handle a range of terrains make them a lasting favourite among buyers.
How can I ensure my car retains the highest resale value over time?
To get the best resale value for your car, prioritizing regular upkeep and maintaining thorough service records is key. Simple tasks like routine oil changes, tire rotations, and scheduled inspections not only keep your car in top shape but also show potential buyers that it’s been consistently cared for.
Take steps to protect both the exterior and interior of your vehicle. Parking in covered areas, washing it frequently, and promptly fixing minor issues like scratches or dents can go a long way in preserving its condition. Be cautious with customizations - while they might suit your taste, they may not attract future buyers.
When buying a car, think ahead about its resale value. Look for models known for their reliability and slower depreciation. If you’re shopping in Canada, platforms like Price Driven can help you find vehicles at competitive prices, setting you up for a smart purchase right from the start.
