Contents Show
In general, used cars are not necessarily more expensive to insure than new cars. However, there are several factors that can affect the cost of insurance for a used car, including:
- Age and condition of the car: Older cars or cars that have been previously damaged may have lower resale value, which can result in lower insurance premiums. However, if the car is in poor condition, it may be more expensive to insure because it poses a higher risk of accidents or breakdowns.
- Make and model of the car: Certain makes and models may be more expensive to insure due to their repair costs, safety features, or risk of theft.
- Personal driving record: Your driving history and record can affect your insurance rates regardless of whether you have a new or used car.
- Location: The location where the car will be driven and parked can also affect insurance rates. For example, if the area has a high rate of car thefts or accidents, insurance rates may be higher.
Overall, the cost of insurance for a used car depends on various factors, and it is best to shop around and compare quotes from different insurance companies to find the best rate for your specific situation.
Insurance cost new vs used car
| Province: Ontario | ||
|---|---|---|
| City | Used Car Insurance Cost | Brand New Car Insurance Cost |
| Toronto | $1,500 per year | $2,000 per year |
| Ottawa | $1,200 per year | $1,600 per year |
| Hamilton | $1,200 per year | $1,600 per year |
| London | $1,000 per year | $1,400 per year |
| Windsor | $900 per year | $1,200 per year |
| Province: Quebec | ||
|---|---|---|
| City | Used Car Insurance Cost | Brand New Car Insurance Cost |
| Montreal | $1,200 per year | $1,700 per year |
| Quebec City | $900 per year | $1,300 per year |
| Gatineau | $900 per year | $1,300 per year |
| Sherbrooke | $800 per year | $1,200 per year |
| Trois-Rivières | $800 per year | $1,200 per year |
| Province: Alberta | ||
|---|---|---|
| City | Used Car Insurance Cost | Brand New Car Insurance Cost |
| Calgary | $1,200 per year | $1,800 per year |
| Edmonton | $1,200 per year | $1,800 per year |
| Red Deer | $1,000 per year | $1,500 per year |
| Lethbridge | $900 per year | $1,300 per year |
| Medicine Hat | $800 per year | $1,200 per year |
| Province: Nova Scotia | ||
|---|---|---|
| City | Used Car Insurance Cost | Brand New Car Insurance Cost |
| Halifax | $1,000 per year | $1,500 per year |
| Sydney | $900 per year | $1,300 per year |
| Truro | $800 per year | $1,200 per year |
| New Glasgow | $800 per year | $1,200 per year |
| Kentville | $700 per year | $1,000 per year |
Does vehicle purchase price affect insurance?
Yes, the purchase price of a vehicle can affect its insurance cost. Generally, a more expensive car will cost more to insure than a less expensive car due to the higher cost of replacement or repair if the car is damaged or stolen.
Insurance companies use a variety of factors to determine the cost of insurance for a particular vehicle, including the car’s make and model, its age and condition, its safety features, and its overall value. A new car that costs $50,000, for example, will typically have a higher insurance premium than a used car that costs $10,000.
Used cars vs new car pros cons
Here are some pros and cons of buying a used car versus a new car in Canada:
Pros of buying a used car:
- Lower price: Used cars are generally less expensive than new cars, which can save you a significant amount of money.
- Less depreciation: A new car can lose a significant amount of its value in the first few years, while a used car has already gone through this initial depreciation.
- Lower insurance costs: As I mentioned earlier, used cars generally have lower insurance costs than new cars due to their lower value.
- Lower registration fees: The registration fees for a used car are typically lower than those for a new car, as they are based on the car’s value.
Cons of buying a used car:
- Higher maintenance costs: Used cars may require more maintenance and repairs than new cars, which can be more costly over time.
- Limited warranty: A used car may not have a warranty or may have a limited warranty, which means you may have to pay for repairs out of pocket.
- Limited selection: You may have to search harder to find a used car that meets your specific needs and preferences.
- Higher interest rates: If you need to finance a used car, the interest rates may be higher than those for a new car.
Pros of buying a new car:
- Peace of mind: A new car comes with a manufacturer’s warranty and is less likely to have mechanical problems in the short term.
- Latest features and technology: New cars often have the latest safety features, technology, and comfort amenities.
- Customization options: You can often choose the specific features and options you want in a new car.
- Lower interest rates: If you need to finance a new car, the interest rates may be lower than those for a used car.
Cons of buying a new car:
- Higher price: New cars are generally more expensive than used cars, which can be a major drawback for those on a tight budget.
- Higher depreciation: New cars lose a significant amount of their value in the first few years, which can make it more difficult to recoup your investment if you decide to sell the car.
- Higher insurance costs: As I mentioned earlier, new cars generally have higher insurance costs than used cars due to their higher value.
- Higher registration fees: The registration fees for a new car are typically higher than those for a used car, as they are based on the car’s value.
New vs used car calculator
There are many online calculators available that can help you compare the costs of buying a new car versus a used car. Here are a few options:
- Edmunds True Cost to Own: This tool allows you to compare the total cost of ownership for a new car and a used car over a five-year period. It takes into account factors such as depreciation, fuel costs, insurance, maintenance, and repairs.
- Bankrate Auto Loan Calculator: This calculator can help you estimate the monthly payments for a car loan based on factors such as the purchase price, down payment, interest rate, and loan term. You can use this tool to compare the costs of financing a new car versus a used car.
- Kelley Blue Book: This website offers a range of tools and calculators to help you compare the costs of new and used cars, including a total cost of ownership calculator, a car payment calculator, and a depreciation calculator.
- Carfax Used Car Listings: This tool allows you to search for used cars in your area and compare prices, mileage, and other factors to help you make an informed decision about whether to buy new or used.
About the Author: Valerie D. Hahn
Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.
