Choosing between a new and used car is a total-cost decision, not simply a choice between a higher and lower sticker price. For this update, our editorial team reviewed OMVIC’s vehicle shopping tips, Transport Canada’s vehicle recall tools, Transport Canada’s Electric Vehicle Affordability Program, and Transport Canada’s driver-assistance guidance.
Keep reading to compare warranty, condition, financing, safety technology, current electric-vehicle incentives, insurance and the checks that matter before you sign in Ontario.
Should I Buy a New Car or a Used Car?
Buy new when a full manufacturer warranty, known history and current features are worth the higher price and early depreciation to you. Buy used when lowering the purchase price matters more and you can accept more research, inspection and repair risk. Compare both choices over the same ownership period before deciding.
| Decision factor | New car | Used car |
|---|---|---|
| Upfront cost | Usually higher; freight and pre-delivery charges may apply | Usually lower; condition and market demand matter |
| History | Known from delivery | Requires history, lien, recall and condition checks |
| Warranty | Starts with the manufacturer’s Canadian warranty terms | May have remaining manufacturer coverage, dealer coverage, an optional service contract or no warranty |
| Technology | Current driver-assistance and infotainment options | Varies by model year; features may be older but easier to evaluate |
| Depreciation | You absorb the early decline in value | A previous owner has already absorbed some depreciation |
| Repair risk | Usually lower at first, but defects and recalls can still occur | Condition and maintenance history create more uncertainty |
| Insurance | Must be quoted for the exact vehicle | Must be quoted for the exact vehicle; used is not automatically cheaper |
Why You Should Buy a New Car
More current safety and driver-assistance features
A new model may offer newer systems such as blind-spot warning, automatic emergency braking or lane-keeping assistance. Transport Canada cautions that these systems vary by manufacturer, may be optional and cannot replace an alert driver. Check the exact trim and read the owner’s manual instead of relying on the model-year label.
A full manufacturer warranty period
A new vehicle starts with the manufacturer’s Canadian warranty, which can reduce uncertainty about covered defects during the warranty period. Terms, time limits, kilometre limits, exclusions, maintenance duties and roadside assistance vary. Read the warranty booklet for the exact model.
A known history
You do not have to reconstruct a prior owner’s maintenance, collision or repair history. That does not make a new vehicle problem-free, especially after a redesign, but it removes one major unknown.
Government Incentives for Green Vehicles
The former iZEV program is closed. Canada’s current program is the Electric Vehicle Affordability Program (EVAP). For eligible 2026 transactions, it offers up to $5,000 for a battery-electric or hydrogen fuel-cell vehicle and up to $2,500 for a plug-in hybrid.
The vehicle must be new and meet the program rules. For vehicles not made in Canada, the final transaction value must be $50,000 or less and the vehicle must be made in Canada or a country with a Canadian free-trade agreement. Leases must run at least 12 months, shorter leases receive a prorated amount, and funding can end before March 31, 2031. Confirm the vehicle and transaction with the dealer and Transport Canada before counting the incentive in your budget.
Why You Shouldn’t Buy a New Car
Depreciation
A new vehicle begins losing resale value as it ages and accumulates kilometres. The exact decline depends on the model, powertrain, demand, condition and market. The previous article’s 20% first-year and nearly-half-by-year-four figures were not tied to a current Canadian source, so they have been removed.
A higher all-in price
OMVIC notes that some charges, including freight and pre-delivery inspection, apply only to new vehicles. Compare the all-in dealer price, tax, licensing, financing cost, add-ons and insurance rather than the advertised payment.
First-model-year uncertainty
A newly redesigned model may have limited reliability history. Check recalls, technical updates and warranty terms. A new vehicle can still spend time at the dealer even when the repair is covered.
Why You Should Buy a Used Car
A lower purchase price
A used vehicle can let you buy the size or features you need for less than a comparable new model. Compare vehicles of similar age, mileage, condition and equipment. A low price can be misleading if it comes with a lien, collision history or delayed maintenance.
A larger evidence base
Owners, regulators and repair shops have had more time to identify model-year problems, recalls and repair costs. That information is useful only when you match it to the exact year and powertrain.
Read More: Review Reliable Cars and Car Brands in Canada
Why You Shouldn’t Buy a Used Car
Warranty and condition are uncertain
Ontario does not provide an automatic warranty on a used vehicle. OMVIC also states that a Safety Standards Certificate is not a warranty; it shows only that the vehicle met minimum safety criteria on the inspection date. Check any remaining manufacturer warranty and read optional service-contract exclusions before paying for one.
The history needs to be verified
The previous article incorrectly said Ontario dealers must provide a Used Vehicle Information Package (UVIP). OMVIC says they do not. A private seller must provide the package. When buying from a dealer, ask for a history report, get disclosures in writing, confirm the VIN and check liens and recalls.
An Inspection Can Change the Decision
Arrange an independent pre-purchase inspection with a trusted mechanic, especially when the manufacturer warranty has expired. A history report cannot show every mechanical problem, and a safety certificate does not replace an inspection for your buying decision.
Do not Assume a Used Car is Cheaper to Insure
Insurance depends on the exact vehicle and driver, not only the vehicle’s age or sale price. Theft experience, repair costs, safety equipment, location, use, coverage and deductibles can change the result. Request comparable quotes for the exact new and used vehicles before signing.
Read More: See the Best Cars to Buy in Canada
What MyChoice quote data shows for new and used vehicles
Based on our analysis of 50,000 auto insurance quotes collected through the MyChoice platform since the start of 2026, new vehicles carried premiums about 14.1% higher than used vehicles in a comparable group. Applied to an Ontario annual premium of $2,345, that difference would put the new-vehicle example near $2,675.
Use that difference as a budgeting prompt, not a rule. The exact model year, theft record, repair cost, safety equipment, vehicle value and coverage can reverse the result. Get insurance quotes for the specific new and used vehicles on your shortlist before deciding which one is cheaper overall.
Compare the Total Cost Over the Same Period
Use the same ownership period and expected kilometres for both choices. A simple comparison is:
Total ownership cost = all-in price + financing interest + insurance + fuel or charging + maintenance + repairs + tires + parking − expected resale value.
For a used car, add an immediate-repair reserve based on the inspection. For a new car, include freight, pre-delivery inspection and any products you choose. Do not subtract an EV incentive until the dealer confirms the transaction qualifies.
Read More: Compare Leasing and Financing a Car in Canada
Used-Car Checks Before You Sign in Ontario
- Verify that the dealer and salesperson are registered with OMVIC.
- Take a proper test drive and get an independent inspection.
- Match the VIN across the vehicle, contract and history documents.
- Check Transport Canada recalls and the manufacturer’s VIN recall lookup.
- Get damage, use, repair and warranty disclosures and promises in writing.
- Read the contract and financing agreement. Ontario has no general cooling-off period after you sign.
Read More: Use Ontario’s Used Vehicle Information Package Before You Sign