Are you planning on buying a car in the not-so-distant future? If so, you’re plagued with the same decision that countless drivers have faced before you: should you buy a brand new car or a used model?

Making this decision is difficult enough as it is, but it becomes even more of a challenge when you factor in additional expenses, like car insurance. Car insurance is legally required in Canada, regardless of if you drive a new or used vehicle. We suggest that you take a moment to familiarize yourself with how it works and why it’s important.

Feel free to continue reading if you’d like to learn more about the ins and outs of finding and purchasing new or used car insurance in Canada.

New cars vs used cars — which option is the right choice for you?

Both new and used cars offer their fair share of pros and cons, some of which include the following:

Pros and cons of buying a new car in Canada

Here are some of the pros of buying a new car:

• New cars are reliable and generally need less maintenance
• Brand new cars are visually appealing and fun to drive (don’t forget that new car smell!)
• Drivers get access to modern technology and safety features (Bluetooth connectivity, backup cameras, lane sensors, etc.)

Some of the cons of buying a new car include:

• New vehicles cost more to purchase upfront (compared to used cars)
• Fast deprecation value (new cars can lose up to 60% of their value after five years)
• Easier to steal through the use of fobs and other modern technology

Drivers should keep both the pros and cons in mind before making a final decision.

Bonus — Want to learn more about the most popular stolen vehicles in Canada? Click this link to find out more.

Pros and cons of buying a used car in Canada

There are a handful of cons that come with buying a used vehicle, some of which include:

• Used cars cost less to purchase upfront (compared to new vehicles)
• Slower depreciation rate, allowing the driver to incur less of a loss if they choose to sell
• Access to models that are no longer available at private dealerships

However, you can’t forget about the cons of buying a used car:

• The new owner never knows the exact history of the vehicle
• Used vehicles generally require more maintenance, and some old parts can be difficult to find (this is less of an issue if the used car is only a few years old)
• Shorter life span

Drivers in Canada should consider all of the factors mentioned above.

Bonus — Click here to learn about the pros and cons of purchasing a demo car.

Getting car insurance for new vehicles vs insurance for used cars in Canada

More often than not, drivers pay more for car insurance if they own a new vehicle. Although this may seem strange (due to the fact that many drivers feel modern vehicles are safer), once you understand the process, it starts to make sense.

The safety level of a vehicle is far from the only factor that determines your car insurance rates — one of the primary influencers is the replacement value of your vehicle. In general, vehicles with a high replacement value cost more to insure, which means that car insurance companies have to pay out more when they are damaged.

Feeling confused? The following examples should help clear things up:

Example #1 — A driver with a brand new sedan, which costs $35,000, gets into a serious accident for which they are not deemed at fault. The accident results in a total loss, which means that the driver’s insurance company needs to cover the value of the vehicle ($35,000).

Example #2 — A driver with a five-year-old used sedan, which costs $14,000, gets into an equally severe collision for which they are not deemed at fault. The accident results in a total loss, which means that the driver’s insurance company needs to cover the value of the vehicle ($14,000).

The insurance company needs to cover the driver’s loss in both examples. However, the driver’s insurance company has to cover a significantly smaller amount in the second example. Because the insurance company will pay less in the event of a total loss, the second driver benefits from lower car insurance rates.

So, the next time one of your friends or family members asks you, “is insurance cheaper on newer cars?”, you can tell them the answer!

*Additional factors like deductibles, driver risk level, location, etc. have been excluded from the examples above for clarity and simplicity. Contact a licensed Surex insurance advisor for details regarding pricing, coverage, claims, etc.*

Insuring a used car in Canada

As mentioned above, one of the reasons car insurance coverage for used cars is generally less expensive is the lower replacement value.

However, there’s another way that used car drivers can save on coverage — forgoing collision and comprehensive coverage.

Collision coverage protects drivers when they collide with another vehicle or third-party object. Comprehensive coverage safeguards drivers from a wide array of unforeseeable risks that occur off of the road, like wind, fire and hail.

As beneficial as they are, neither collision or comprehensive coverage are legally required in Canada. So, if you feel that the “juice isn’t worth the squeeze”, then you can pass on these types of coverage.

Do you need help finding car insurance?

We know that buying car insurance for a used vehicle can feel complicated. We’re here to help make it easier.

At Surex, we want to make finding and buying insurance a straightforward, frictionless experience. So, if you have questions or concerns about your current policy, we’ve got you covered. Additionally, if you need help finding car insurance quotes from some of the best carriers, like Aviva, you’ve come to the right team.

We can provide you with ten personalized quotes in ten minutes or less (depending on your location).

Contact one of our experienced insurance advisors today to learn how we can help you save 25% (or more) on car insurance by bundling your policies with one of our providers.

Want to learn more?

Do you want to learn more about buying insurance for used vehicles in Canada? Contact one of our advisors or visit our website for more info!