Is Insurance More Expensive for Newer Cars in Ontario?

Reviewed by Michelle Bragg, VP Personal Lines, RIBO Licensed | Last Reviewed: May 2026

“Is insurance more expensive for newer cars in Ontario?” The short answer is yes in many cases. Newer vehicles often cost more to repair or replace, include advanced technology, and may require broader insurance coverage if they are financed or leased.

That said, insurance costs are not based on vehicle age alone. In Ontario, insurers also consider factors such as the vehicle’s theft risk, safety ratings, repair costs, driving history, location, annual mileage, and the type of coverage selected. Some newer vehicles with strong safety records may qualify for lower premiums than certain older vehicles with higher claims histories.

This article is for general informational purposes only and does not provide legal, insurance, financial, or vehicle purchasing advice. Auto insurance coverage, underwriting guidelines, and vehicle rating factors may vary between insurers and provinces.

Why Is Insurance More Expensive for Newer Cars in Ontario?

Newer vehicles generally have a higher market value than older ones. If a vehicle is severely damaged or declared a total loss after a covered claim, the insurer may need to pay a significantly larger amount to replace it.

Modern vehicles also contain sophisticated technology that increases repair costs. Features such as collision sensors, cameras, radar systems, lane-assist technology, and touch-screen control modules can be expensive to repair or recalibrate after even a minor collision.

According to the Insurance Bureau of Canada’s 2023 Facts Book report, auto repair costs have continued to rise partly because modern vehicles contain more advanced technology and electronic systems. The Insurance Bureau of Canada notes that these technologies improve safety but can increase claim severity and repair expenses.

In Ontario, financing or leasing a newer vehicle may also increase insurance costs because lenders commonly require collision and comprehensive coverage until the vehicle is fully paid off.

Is New Car Insurance Always Higher Than Older Car Insurance?

No, not always. While newer vehicles often cost more to insure, there are situations where an older vehicle may carry a similar or even higher premium.

What Factors Can Make an Older Car More Expensive to Insure?

Some older vehicles may have:

• Higher theft rates
• Poor crash safety ratings
• Limited replacement part availability
• Greater likelihood of severe injuries during collisions
• Higher claim frequency for specific models

For example, an older sports car with high theft rates may cost more to insure than a newer family SUV equipped with advanced safety systems.

Can Safety Features Lower Insurance Costs?

In some cases, yes. The Financial Services Regulatory Authority of Ontario’s (FSRA) How Cars Measure Up article explains that insurers use a variety of factors for risk assessment when setting rates, including vehicle-specific claims trends, repair costs and features. Examples of these features include automatic emergency braking, anti-theft immobilizers, lane departure warnings, and adaptive headlights.

Because of this, some newer vehicles with strong safety records qualify for more favourable rates than expected.

How Does Car Age Affect Insurance in Ontario?

Vehicle age affects insurance in several ways beyond simple replacement value.

Actual Cash Value Changes Over Time

As vehicles age, depreciation lowers their actual cash value (ACV). Since older vehicles are generally worth less, insurers may pay less in the event of a covered total loss.

This is one reason why insurance costs for newer vs older car models can differ significantly.

Repair Costs Can Vary by Vehicle Generation

New vehicles often require manufacturer-approved parts and specialized repair procedures. Even a relatively small collision can involve recalibration of sensors and cameras.

Older vehicles may cost less to repair in some situations because:

• Parts are less expensive
• Repairs are mechanically simpler
• Aftermarket parts may be more available
• Fewer electronic systems need recalibration

However, very old or discontinued vehicles may sometimes cost more to repair due to limited part availability.

Coverage Needs Often Change With Vehicle Age

Many Ontario drivers choose broader protection for newer vehicles, especially when they are financing or leasing them.

Older vehicles that are fully owned outright may only carry mandatory coverage plus selected optional protections. This can reduce overall premium costs.

What Coverage Is Usually Recommended for Newer Cars?

Coverage needs depend on the vehicle, ownership arrangement, and personal risk tolerance.

What Insurance Coverage Is Mandatory in Ontario?

Ontario drivers must carry:

• Third-party liability coverage
• Statutory accident benefits
• Direct compensation property damage coverage where applicable
• Uninsured automobile coverage

You can learn more about the different auto insurance coverage options by reading our blog titled, What Does Car Insurance Cover in Canada, and if you still have questions, request a quote and connect with a licenced BIG broker today!

Why Do Financed or Leased Cars Often Cost More to Insure?

Lenders and leasing companies commonly require:

• Collision coverage
• Comprehensive coverage
• Specified deductibles
• Sometimes replacement cost endorsements

These additional protections increase the total premium compared to basic mandatory coverage alone.

What Is Replacement Cost or Depreciation Protection?

Some Ontario drivers purchase optional endorsements that help protect against depreciation for newer vehicles after a total loss.

These endorsements may allow eligible drivers to receive reimbursement closer to the original purchase price rather than the depreciated value if the vehicle is written off within a qualifying period.

How Does Vehicle Theft Affect New Car Insurance Costs in Canada?

Vehicle theft remains an important insurance factor in Ontario and across Canada.

According to the Équité Association’s Canada’s Top 10 Most Stolen Vehicles report, organized auto theft continues to impact insurance claims costs nationwide, particularly for certain SUVs, pickup trucks, and luxury vehicles, causing claims costs to exceed 1 billion dollars in 2024.

Vehicles considered high theft targets may face higher premiums regardless of whether they are new or used.

Which Features May Help Reduce Theft Risk?

Vehicles with the following may help reduce theft exposure:

• Engine immobilizers
• Tracking systems
• Encrypted key technology
• Steering wheel locks
• Secure garage parking

Some insurers may also recommend aftermarket anti-theft devices for high-risk vehicles.

Does a New Car’s Safety Rating Affect Insurance?

Yes. Vehicle safety ratings can influence how insurers assess claims risk.

Organizations such as the Insurance Institute for Highway Safety and Transport Canada conduct crash testing and safety evaluations that insurers may review alongside claims data.

Vehicles with strong occupant protection and accident prevention systems may reduce the likelihood or severity of injuries and property damage claims.

Why Do Advanced Safety Features Matter?

Advanced driver-assistance systems may help reduce certain types of accidents, including:

• Rear-end collisions
• Lane departure incidents
• Low-speed parking collisions
• Blind spot accidents

However, these same systems may increase repair costs after a collision because the components can be expensive to replace and recalibrate.

Is It Better Financially to Buy a New or Used Vehicle?

There is no single answer that applies to every Ontario family.

When Might a New Vehicle Make Sense?

A newer vehicle may be appropriate if you value:

• Manufacturer warranty protection
• Advanced safety features
• Lower likelihood of immediate repairs
• Improved fuel efficiency
• Predictable maintenance schedules

Some families also prefer newer vehicles for reliability during long commutes or frequent travel.

When Might an Older Vehicle Make Sense?

An older vehicle may help reduce:

• Purchase price
• Depreciation exposure
• Financing obligations
• Insurance costs
• Registration and borrowing expenses

For drivers focused primarily on affordability, a reliable used vehicle may offer lower overall ownership costs.

How Can Ontario Drivers Manage New Car Insurance Costs?

Insurance pricing varies significantly between vehicles and insurers. Comparing options before purchasing a vehicle can help drivers make more informed decisions.

What Should Drivers Compare Before Buying a Vehicle?

Before purchasing a new or used vehicle, consider reviewing:

• Theft statistics
• Repair cost trends
• Safety ratings
• Insurance quote estimates
• Fuel costs
• Financing requirements
• Replacement part availability

Even vehicles within the same manufacturer lineup can have noticeably different insurance costs.

Does Driving History Matter More Than Vehicle Age?

In many cases, yes. Insurers heavily consider:

• Convictions
• Claims history
• Years licensed
• Annual mileage
• Driver training
• Location
• Usage patterns

A driver with a strong driving record may receive better rates on a newer vehicle than a higher-risk driver insuring an older vehicle.

Why Is Comparing Quotes Important?

Insurance companies use different underwriting models and rating systems. One insurer may rate a specific vehicle more favourably than another based on claims data and risk analysis.

Ontario drivers considering a vehicle purchase may benefit from reviewing quotes before making a final decision.

For example, families comparing options can review available protections through resources on our website to gain a better understanding of their options. Families can also request a quote online and connect with a licenced BIG broker today.

Frequently Asked Questions

Is insurance more expensive for newer cars in Ontario?

Yes, newer cars are often more expensive to insure because they usually cost more to repair or replace and may require broader coverage if financed or leased.

Does car age affect insurance rates in Ontario?

Yes, vehicle age can influence repair costs, replacement value, theft risk, and coverage requirements, all of which may affect insurance premiums.

Why do newer cars cost more to repair?

Newer vehicles often contain advanced electronics, sensors, cameras, and manufacturer-specific parts that require specialized repairs and recalibration.

Can a used car sometimes cost more to insure?

Yes, some older vehicles may have higher theft rates, weaker safety ratings, or limited replacement part availability that can increase premiums.

Do safety features lower insurance premiums?

Advanced safety systems may help reduce insurance costs in some cases because they can lower accident frequency or injury severity.

Is comprehensive coverage required for a new car in Ontario?

Comprehensive coverage is not legally required by Ontario law, but lenders and leasing companies commonly require it for financed or leased vehicles.

Final Thoughts

So, is car insurance more expensive for new cars in Ontario? In many situations, yes, but vehicle age is only one part of the equation. Repair costs, theft trends, safety technology, financing requirements, and your driving profile all contribute to how insurers calculate premiums.

Before purchasing a vehicle, Ontario drivers may benefit from reviewing insurance estimates alongside purchase price, maintenance costs, and long-term ownership expenses. Comparing quotes in advance can help families better understand how a vehicle choice may affect their overall budget.

Blog Updated: July 2026