Old vs. new: Are used cars cheaper for your clients?

Your client’s decision between owning a new versus used vehicle model is becoming more nuanced than a simple sticker-price comparison, says a new report from Rates.ca.

“A used vehicle can sometimes lead to lower overall costs, but the savings depend heavily on the model’s risk profile,” says Rates.ca insurance expert Daniel Ivans. “Newer vehicles often come with higher premiums because repairs are more complex and expensive, while older models can see higher costs if their safety ratings or recall history raise the likelihood of claims.” 

To compare the real costs of owning new and used vehicles, Rates.ca looked at two of Canada’s most popular vehicles — the Ford F-150 pick-up truck and the Toyota RAV4 SUV. The rate aggregator used a specific driving profile and a variety of data sources, including Statistics Canada, CARFAX Canada’s free car valuation tool, a CAA driving costs calculator and Finder Canada, among others.

Their analysis showed that while used models can offer meaningful savings, the gap is not always as big as buyers expected once insurance, financing, depreciation, and maintenance are factored in.

The two vehicles couldn’t be more different — one is built for heavy hauling, the other for everyday practicality. “Yet both dominate Canada’s sales charts year after year, according to a variety of sources, making them a good case study for ownership costs.”

In general, the cost differences between the new and older versions of the vehicles were more glaring for the Ford F-150. For that vehicle, the first-year ownership costs for a 2025 model are around $29,111 — more than double the $13,498 cost for a 2018 model, Rates.ca report shows.

Newer F-150 models also typically have higher insurance premiums. For example, the newer model reviewed had annual premiums of about $3,684, compared to $2,864 for the older model.

But it’s also important to look at factors such as depreciation and maintenance costs. Rates.ca’s analysis shows the new 2025 F-150 loses about $17,667 in its first year, while the 2018 model loses only $3,570. “Depreciation is often the main reason a used model can cost significantly less to own.”

At the same time, maintenance needs often increase with age as older vehicles can require more frequent repairs. For the F-150, the newer version averaged $788 per year in maintenance, while the 2018 model averaged $1,296.

Muted differences

The Toyota RAV4 had less drastic differences between newer and older models; the largest difference was the first-year ownership costs. Unlike the Ford F-150’s 116% cost increase, the RAV4 saw a modest rise of 15%: $12,636 for a 2025 model versus $10,966 for the 2018 version.

Insurance premiums were also relatively comparable for the Toyota model, at $2,921 annually for the new version and the older one at $2,699.

For depreciation, the RAV4 loses about $4,711 in year one compared to $2,320 for the 2018 version. And the newer RAV4 averaged only $429 per year in maintenance compared to $1,141 for the 2018 model.

So, the decision between new and used vehicles is not always straightforward and takes a variety of factors into account. Understanding the full picture helps drivers avoid unexpected costs, Ivans says.

“A lot of people focus on the sticker price, but insurance, long-term maintenance, and depreciation can shift the overall cost more than they expect,” he says. “Laying out those expenses in advance helps drivers see which option truly fits their budget.”