Many Canadians worry tariffs will put new cars out of reach, survey finds

Many Canadians are worried they won’t be able to afford their next vehicle as trade tensions and tariffs continue to cloud the automotive industry.

A new survey from KPMG Canada suggests uncertainty around cross-border trade is becoming a growing concern for consumers already facing high prices in the new-vehicle market.

The survey found that three-quarters of Canadians fear ongoing trade tensions will push vehicle prices sharply higher, potentially pricing many buyers out altogether. That concern is emerging even as 61% say they expect to be in the market for a new vehicle within the next five years, highlighting a widening gap between demand and what households believe they can realistically afford.

“With U.S. tariffs disrupting the industry, Canadians in the market for a new vehicle are looking to the brands they trust at prices they can afford,” said Dave Power, Partner and National Automotive Sector Leader at KPMG in Canada, in a statement (1). “Affordability remains critical, and consumers are increasingly paying attention to where vehicles are built.”

Price anxiety is reshaping how Canadians think about buying new

Affordability continues to dominate vehicle buying decisions in Canada. According to the survey, 80% of Canadians say price is the most important factor when purchasing a new vehicle, followed closely by brand trust and reputation (71%).

Nearly 4 in 10 Canadians plan to spend between $30,000 and $50,000 on their next vehicle, while 23% say they won’t spend more than $30,000 — a price point that has become increasingly difficult to find in today’s new-vehicle market.

And invariably, U.S. and Canadian tariffs are adding to that pressure. Nearly a quarter of respondents say trade-related costs have already priced them out of buying new, and another 38% say a further 10% to 15% price increase would push them out of the market entirely. For many households, even modest increases could be enough to change purchase plans.

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Where vehicles are built is starting to matter to buyers

Beyond sticker price, Canadians are paying closer attention to where vehicles are made. Seventy-two percent say it’s important that their vehicle is assembled or built in Canada, reflecting growing concern about domestic jobs, supply chains and economic resilience.

"Car buyers are looking for vehicles that meet their lifestyle, are affordable and have a positive economic impact on the country,” said Power. “It's not surprising that Toyota and Honda, which each have a large manufacturing presence in Ontario, resonate most with Canadian consumers.”

Meanwhile, 72% of Canadians worry vehicle prices will rise if Canada loses protection under the Canada–U.S.–Mexico Agreement (CUSMA), which is set for review next year. Any disruption to long-standing supply chains, the survey suggests, could quickly translate into higher prices at dealerships.

For consumers, this adds another layer of uncertainty: Even if interest rates stabilize, vehicle prices may remain under pressure from trade policy decisions beyond buyers’ control.

One option is to skip dealership-financing — known for higher interest rates — and use a lower-interest loan. Spring Financial offers loans from $500 to $35,000. Apply and get approved for a loan in just 3 minutes.

EV interest is growing — but affordability is the deciding factor

Interest in electrified vehicles (EVs) continues to rise, but affordability remains the clear limiting factor. More than half of Canadians (55%) say they plan to purchase an environmentally friendly vehicle next, led by hybrids, followed by plug-in hybrids and fully electric vehicles.

That interest, however, is highly conditional. Respondents consistently pointed to the need for lower prices and more reliable charging infrastructure before EVs can become a realistic option for a broader share of buyers.

The survey also shows growing caution toward newer market entrants: Only 25% would consider buying an EV from a major technology company, down sharply from 2022.

Overall, the findings point to a market under strain not because Canadians lack interest in new vehicles, but because many fear the economics are no longer working in their favour.

While price sensitivity is rising and budgets are tighter, trade policy is also now firmly part of the affordability conversation. Until there is more clarity, many buyers appear to be bracing for higher costs — and questioning whether buying new will remain viable at all.

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