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Practical advice for Ontario buyers

Compare the cost of owning it.

Buying used can reduce the upfront cost. The better choice depends on the actual prices, financing and running costs of the cars you are comparing.

By Carventory · Sources checked

  • Compare over the same years and kilometres.
  • Include the value you expect to recover when you sell.
  • Leave money for maintenance and unexpected repairs.

What depreciation means

  • Depreciation is lost value. Buy for $30,000 and later sell for $20,000: the difference is $10,000.
  • New cars can lose value quickly. FCAC says a new car may be worth 25% less after its first year. That is a possibility, not a forecast for every model. Read FCAC’s guidance.
  • Used cars still depreciate. A lower starting price can help, but an overpriced or poorly maintained used car can erase the advantage.
Illustration: a 25% drop in value
Purchase price$40,000
Value after the assumed drop$30,000
$10,000 in depreciation. An illustration using FCAC’s possible loss, not a market valuation. Tax and other costs are excluded.

Build a fair comparison

Use the same ownership period and driving distance for both cars. Write down these amounts in Canadian dollars:

  • Purchase: agreed price, tax, licensing and any selected extras.
  • Borrowing: total interest and borrowing fees, if financing.
  • Running costs: insurance, fuel or charging, maintenance, tires and repairs.
  • Resale: a realistic estimate of what each car could sell for at the end.

Your ownership-cost worksheet

Purchase cost + borrowing cost + running costs − resale value = estimated ownership cost.

Count the purchase price once. Do not add loan principal repayments again. Include optional warranty costs and uncovered repairs.

For example, a $28,000 used car with a $14,000 resale estimate loses $14,000 in value. A $40,000 new car with a $20,000 resale estimate loses $20,000. That gives the used car a $6,000 head start before differences in tax, financing and running costs. These are invented assumptions over the same five-year period, not market averages.

UpFront Wealth’s buying guide also recommends separating the vehicle, financing and warranty decisions.

When new could be better value

  • The used price is close to the price of a comparable new car.
  • A written new-car finance offer substantially reduces borrowing costs.
  • Expected repairs and running costs use up the used car’s initial saving.

Compare complete loan offers over the same term. A lower payment alone does not establish a lower cost. FCAC’s loan comparison checklist.

Choose the car that fits your budget

  • Compare similar vehicles. Check trim, engine, drivetrain, kilometres, history and condition alongside price.
  • Get an insurance quote for each finalist. The vehicle affects the premium; a cheaper purchase is not automatically cheaper to insure. How insurance pricing works.
  • Keep a cash buffer. Ask the inspecting mechanic what needs attention now and what is likely due soon.
  • Consider keeping your current car. Compare the cost of necessary repairs with the full cost of changing vehicles.

Next steps

Use the before-signing checklist

Sources & further reading

Ontario rules are labelled where they apply. Check local rules when buying in another province. Use current written quotes and the terms of your own contract.

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