New Car Prices in Canada: Can You Still Find a Vehicle Under $20,000?
Finding a new vehicle in Canada for under $20,000 has become increasingly challenging, but is it still possible? Economic columnist Pierre-Olivier Zappa addressed this question, revealing a landscape dramatically changed from just a decade ago.
The Disappearance of Affordable Options
As of February 23, 2026, finding a new car for less than $20,000 in Canada is “mission impossible,” according to Zappa. The disappearance of the Mitsubishi Mirage, previously available for $19,480 in 2025, has removed the last vehicle in that price range. A decade ago, a basic Nissan Micra could be purchased for under $10,000, highlighting the significant price increases in the automotive market.
Current Most Affordable Option
Currently, the Nissan Kicks Play SUV is the most affordable vehicle available in Quebec, priced at $22,749. This represents a $2,600 discount from the manufacturer’s suggested retail price. Consumers may find similar discounts as competition intensifies among dealerships.
A Competitive Market & Flyer Wars
Competition in the automotive sector is strengthening, leading to what Zappa describes as a “real fight of flyers” at the dealership level. Manufacturers are becoming more aggressive with discounts to attract buyers. Hyundai, for example, is offering loyalty discounts, reducing the rental rate of its Tucson SUV by 2%, potentially saving consumers tens of dollars per month.
Sales Trends and Future Outlook
Despite rising prices, 2025 was a strong year for automobile sales in Canada, reaching a six-year high. This surge was likely driven by consumers making purchases before the implementation of American and Canadian tariffs. However, demand cooled in the final months of 2025, and TD Bank forecasts a 4.3% decline in new vehicle sales for 2026, to approximately 1.9 million units.
Tariffs and Supply Chain Shifts
Uncertainty surrounding tariffs, even after the American Supreme Court invalidated part of Donald Trump’s tariffs, has shaken consumer confidence. Manufacturers are adjusting their strategies to navigate these challenges. Hyundai, for instance, withdrew the Tucson (assembled in the United States) from the Canadian market, now sourcing the vehicle from Korea. By the end of 2025, only 65% of vehicles sold in Canada originated from the CUSMA zone (Canada, United States, or Mexico), a record low.
Financing Challenges: Car Payments Approaching Mortgage Levels
The average price of a new vehicle in Canada is now around $50,000. Nearly 30% of new car loans have monthly payments of $1,000 or more, and average rental payments are close to $800 per month. In some regions, like Saguenay, car payments are nearing the average mortgage payment ($886 per month vs. $547 for a vehicle). Consumers are extending loan terms to seven years to manage these costs, effectively treating a car loan like a small mortgage.