Buying a new or used car is a big financial commitment. Beyond the purchase price, your decision between the two options should be guided by the overall cost of owning and operating the vehicle.
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 to prepare this article.
Should I Buy A New Car Or A Used Car?
Start with your budget, your tolerance for effort, and your willingness to take on risk. If you want convenience, certainty, and comprehensive warranty coverage, choose new; if you want lower cost and are comfortable with more effort, choose used.
In general, used vehicles can cost less. New ones, however, offer more modern features, and full warranties.
When A New Car May Be The Better Choice
When You Need More Safety And Driver-Assistance Features
Newer vehicles may offer safety and driver-assistance technologies like blind-spot warning, automatic emergency braking, or lane-keeping assist.
Check the vehicle’s trim, not just its model year, before purchasing. Review the owner’s manual for more information. Remember that safety and driver-assistance technologies aren’t a substitute for an alert driver.
When You Need A Full Manufacturer Warranty
Brand-new vehicles typically include a Canadian manufacturer’s warranty. This can reduce uncertainties about defects during the warranty period because they’re covered. However, warranty limitations, exclusions, service requirements, and breakdown or roadside assistance vary by warranty. Read your vehicle’s model-specific warranty booklet to learn the full details.
When A Known Car History Is Important To You
Another reason to choose a new car is that you won’t have to research the previous owner’s accident/repair history. Although no one can guarantee that a new car will be problem-free, you can at least rule out the unknown.
When You Want To Get Government Incentives For Green Vehicles
Canada’s previous incentive program, iZEV, is now closed. The new Electric Vehicle Affordability Program (EVAP) provides:
- A rebate of up to $5,000 for a qualifying transaction on a battery-electric or hydrogen fuel-cell vehicle in 2026
- A rebate of up to $2,500 for a qualifying transaction on a plug-in hybrid
These incentives apply to new vehicles only and are subject to various requirements.
To be eligible, your car must be made in Canada or in a free-trade partner country. For vehicles made outside of Canada, the final transaction price must be $50,000 or less.
Leases must be for at least 12 months, with the incentive prorated for leases under 48 months.
The incentive amount depends on when the dealer or authorized seller submits the eligibility assessment, not necessarily the transaction date.
Downsides Of Buying A New Car
Why Buying Used is Beneficial
A Lower Purchase Price
Buying a used car may let you afford the model you want. To compare used vehicles fairly, start with similar age, condition, mileage, and equipment.
A Larger Evidence Base
Information about recalls, defects, and repair costs that accrue over time from owners, regulators, and repair shops is useful only if it ties to the specific model year and powertrain you’re researching.
Read More: Review Reliable Cars and Car Brands in Canada
Downsides Of Buying A Used Car
Is A Used Car Always Cheaper To Insure?
Not always. Vehicle age is only one of the factors that can affect insurance cost. Our team looked at 50,000 auto insurance quotes collected through our platform since the start of 2026. On average, premiums were about 14.1% higher for newer vehicles than for the same used model.
Keep in mind these are averages and should give you a sense of what to expect when budgeting. Depending on the year, repair costs, safety features, vehicle value, theft statistics, and coverage type, it may cost more to insure a used vehicle than a new one.
Read More: See the Best Cars to Buy in Canada
Compare The Total Cost Over The Same Period
Use the following formula to calculate the total cost of owning a car.
Total ownership cost = all-in price + financing interest + insurance + fuel or charging + maintenance + repairs + tires + parking − expected resale value.
If you’re considering a used car, add some money for immediate repairs based on your inspection.
If you’re considering a new car, make sure you add the cost of freight and PDI.
If you’re looking at an EV, don’t count government incentives as savings until you’re sure you’re eligible, so ask the dealer.
Read More: Compare Leasing and Financing a Car in Canada
Ontario Used-Car Checks Before You Sign
- Make sure the dealership and salesperson are OMVIC-registered, take the car for a test drive and have it inspected before signing.
- Make sure you get any details about damage, prior use, repairs, recalls, warranties, etc., in writing.
- Check for recalls at Transport Canada or through the manufacturer’s VIN lookup.
- Make sure the VIN matches across the agreement, vehicle, and vehicle history.
- Read all of the sales and financing agreements before signing.
Read More: Use Ontario’s Used Vehicle Information Package Before You Sign