Guide To Car Ownership For Canadians: Total Cost of Owning a Car in Canada

Before you buy a new car, the most common practice would be to check the car prices at the best British Columbia car dealerships. Around 84% of Canadians own a car. If you want to buy your dream car, we highly recommend reading more about the total amount of cost of ownership of a car in Canada so that you can invest without worries.

Lucky for you, because we will discuss about it in detail. From registering and licensing your car to understanding car loan rates British Columbia, this guide will help you estimate the total cost of owning and operating a vehicle in Canada and can even help you save on your car expenses. Read more to learn about the true cost of car ownership in Canada:

The Cost Involved in Car Ownership: An Average Monthly Estimation of Car Expenses

Statistics Canada has reported that transportation is the third-largest expenditure in a Canadian household. An average Canadian household spends over 15% of their income due to the ongoing costs of owning a vehicle. This is also relevant if you have applied for tax-free First Nation financing in British Columbia.

Research says that the average monthly cost of owning the vehicle will be around $1,300. To know the total cost of ownership of a car in Canada, you need to note many different factors, such as car insurance rates, monthly fuel costs, car maintenance charges, parking, and more. In the next section, we will list a detailed breakdown of the average cost of car ownership in Canada.

Recommended: When Is Best Time to Buy a Car in Canada? Insider Tips Revealed

A Detailed Breakdown of Car Costs for Canadians: Different Costs Associated with the Total Cost of Ownership

Ready to set out to buy your new vehicle? Here's a detailed breakdown of the car ownership cost in Canada:

The Purchase Price of Car

The average selling price of new cars is around $900-1000 per month, while used car prices are around $800-900 per month.

Registration Cost

The cost of registering and licensing depends on your province, where the average price is around $60 - 200 per year.

Interest Rates

The interest rate of the car depends on whether you are buying an old car or a new car. It also depends on how good your credit score is. While a used car has a higher interest rate, a new car means you will have to pay lower interest rates. The average interest rates cost around $100-200.

Depreciation

A car is a depreciating asset, where the value of your car depreciates by over 15-20% within the first year. The total depreciation cost of the car every month is around $550-650.

Car Fuel

Buying a vehicle means that you will need to refill the car with fuel every once in a while. The average cost of car fuels can amount to $100-200 every month. You can decrease this up to $20-30 a month if you purchase an electric vehicle. Always make sure to estimate the total fuel consumption per month before financing your car.

Car Insurance

The rate of insurance depends on your driving history and the province. The average price is around $100-200 per month. You can compare car insurance quotes before you finalize the purchase.

Parking Costs

Parking costs in Canada can be costly, and it differs in every province. You can expect the average car parking costs per month to be around $200-500 every month.

Car Maintenance

Statistics Canada mentions that you should keep at least $79 aside for car maintenance every month. So, it is advisable for car buyers to keep a monthly budget of $100 for maintenance charges. This includes maintenance in oil changes, motor, brakes, and so on.

Read More: How to Find the Best New Car Loan Options - Even with Bad Credit

Useful Tips To Save on Your Car Expenses

Before your next vehicle purchase, you can use the following tips to save money:

• Choose a Vehicle Wisely: Just because a car is less expensive does not mean it will be a good choice. You need to consider the costs of depreciation, maintenance, and gas refills. 
• Resale Value: You can save more by finding a car with a good trade-in value.
• Depreciation: Right after the purchase, the car will lose around 15-20% of its value. 
• Choose Hybrids, Avoid Larger Vehicles: Hybrid vehicles cost less when compared with larger vehicles like SUVs. 
• Long-Term Vehicle Ownership: The more you use the car, the less it will cost you.

FAQs on Total Cost of Ownership of Car in Canada

Q. What is the total cost of car ownership in Canada?

The total cost of car ownership in Canada includes many expenses apart from just the purchase price of the vehicle. This includes factors like depreciation, car insurance, fuel costs, maintenance costs, taxes, and other car payments. 

Q. How does depreciation affect the cost of owning a car?

Depreciation is one of the most significant factors impacting the cost of owning a vehicle. It refers to the reduction in the vehicle's value over time. New cars lose around 20% of their value in the first year and around 60% within five years. 

Q. What are the main components of the total cost of ownership?

The main components of the total cost of ownership include depreciation, car insurance, fuel costs, maintenance costs, and other such monthly payments. Using a car cost calculator can help prospective buyers to calculate the cost.

Q. What is the annual cost of vehicle ownership?

The annual cost of vehicle ownership is around $10,000-16,000. It depends on the vehicle you own and where you live in Canada.

Q. Can I finance a car with bad credit? Will it be too expensive?

Yes, you can apply for a bad-credit car loan British Columbia at Auto Lending Hub. You can contact us to learn about the monthly driving costs of owning a car in Canada.

Must Read: How Much Credit Score is Required For a Car Loan in Canada

Conclusion

Purchasing a new vehicle is a big investment. You can save on car expenses by making the right decisions and by calculating the average new car or average used car expenses.