Used car insurance: Which coverage should you choose?

Why insure a used car?

Car insurance is mandatory in Quebec, for both new and used vehicles. Driving without insurance can result in fines and the suspension of your driver’s licence. In addition, the cost of repairs can be high in the event of a road accident.

When should you get insurance for a used car?

You must insure your used car before taking possession of it—that is, just before the purchase or transfer of ownership. Your coverage must be active (proof of insurance in hand) for vehicle registration and to drive it legally.

Some documents may be requested by the insurer:

• Valid driver’s licence of the new owner
• Vehicle information (year, make, model, VIN or previous owner’s licence plate)
• Proof of purchase or transfer of ownership
• Insurance history and driving record

This information allows the insurer to assess your driver profile and calculate your insurance premium.

Good to know: You must always carry proof of insurance (paper or digital) when driving in Quebec.

When and how do I update my current auto insurance policy?

You must notify your insurer as soon as you purchase your new used car. They will be able to update your current car insurance policy for your new vehicle, adjusting your coverage and premium based on its characteristics. The policy update must be completed and in effect before you drive the vehicle.

Which insurance should you choose for a used car?

The choice of insurance for a used car depends mainly on its value, how it’s used, and your risk tolerance.

Civil liability – Chapter A (mandatory)

Civil liability covers damages caused to others. The law requires a minimum of $50,000. CAA-Quebec recommends an amount of coverage of $1,000,000 to $2,000,000, especially if you frequently drive outside the province or in the United States.

Optional coverage – Chapter B

Depending on your needs, you can add additional coverage:

• Collision and upset
• Theft and vandalism
• All perils (more comprehensive coverage)
• Protections to preserve the vehicle’s value

These coverages have a direct impact on your premium and the extent of your protection against damages to your vehicle.

Coverage against vehicle depreciation

Two protections are offered by insurers that allow you to receive compensation without depreciation being taken into account in the event of a total loss or theft:

• Endorsement Q.E.F. No. 43D – Modification to indemnification
• Policy Q.P.F. No. 5 – Replacement insurance

Speak with your insurance agent or broker to find out which protection best suits your situation.

How much does auto insurance cost for a used car?

There is no fixed price. The cost of insurance for a used car varies based on several factors. Your insurance premium is calculated according to your driver profile and your type of vehicle.

Several factors can influence the cost of your premium:

• Vehicle make and age
• Mileage
• Place of residence
• Driving record
• How the car is used (daily, occasional, or professional use)

The deductible you choose ($250, $500, or even $1000) can also affect your premium. In general, a used car costs less to insure than a new vehicle. However, more comprehensive coverage or a higher-risk profile can result in higher premiums. Contact multiple insurance companies to get a better rate.

Modified vehicles: Impact on insurance

If you purchase a modified used car, you must inform your insurer. Some modifications increase the insured value of the vehicle, while others are seen as a higher risk by the insurer. Modifications such as a custom paint job, a spoiler, or alloy wheels (mags) can affect your coverage and increase your insurance premium.

What to check before buying a used car?

Before buying a used car, take the time to verify the following to avoid surprises and make the right choice:

• Vehicle history–number of owners and accidents ($): Via SAAQClic or Carfax Canada, where CAA-Quebec members receive up to $8 off
• RDPRM (Register of Personal and Movable Real Rights)
• Market value (purchase price)
• Used vehicle inspection
• Mileage
• Financing terms (not recommended for a vehicle more than 7 years old)

FAQ – Used car insurance

Here are frequently asked questions about used car insurance.

1. Is there a difference between insurance for a new car and a used car?

Yes. First, a used car is generally less expensive to insure since its market value is often lower. Second, a new car may be eligible for new value protection, but not a used car—which can, however, be protected against depreciation.

Basic coverages remain similar in both cases.

2. Is insurance cheaper for a used car?

Yes, in many cases. Since the vehicle’s value is often lower, the cost of insurance may also be lower. However, the premium amount varies based on several factors: the vehicle make, driving record, how the vehicle is used, and the coverages selected.

3. Can I get new value insurance for a used car?

No. New value coverage is reserved for new vehicles. For a used car, certain protections such as replacement value coverage or the 43D endorsement can help limit depreciation.

4. Does auto insurance cover hidden defects?

No. Auto insurance covers accidents, theft, and vandalism, but not hidden defects or lemons. The legal warranty or legal protection linked to your car or home insurance are your best recourse against a bad purchase from a used car dealer.

5. How do I find affordable car insurance?

The best way to save on your premium is to shop around for car insurance. Don’t hesitate to request multiple quotes and even work with an insurance broker.

Before hitting the road with a used car, make sure you have car insurance coverage that is well suited to your situation. Between civil liability, optional coverages, and insurance add-ons, several combinations are possible. Comparing quotes remains the best way to pay a fair price while staying well protected.