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How much does it cost to own a car in Canada?

We've crunched the numbers to find out the average monthly cost of owning a car in Canada.

The cost of a car in Canada extends far beyond the sticker price. You’ll also need to budget for maintenance costs, insurance and registration, gas, car loan payments and finally the cost of depreciation—which is not to be sneezed at.

But how much does a car cost per month in Canada? Keep reading to find out.

How much is a car? Average car price in Canada

The average cost of a new car in Canada is $66,422, according to the March 2024 AutoTrader Price Index. The average cost of a used car is $37,662.

However, the average car price in Canada varies depending on the type of vehicle you buy.

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Keep in mind that you’ll have to pay more than the MSRP (manufacturer’s suggested retail price) to own a vehicle. Other costs you need to budget for include financing fees and interest, gas, maintenance, insurance, parking and more. Below we break down the full cost of car ownership in Canada.

How much does a car cost per month in Canada?

To help give you an idea of the overall cost of owning and driving a car in Canada, we looked at the three top-selling vehicles in Canada in 2023 across three categories:

  • Pickup truck: Ford F150 (2024 Ford F-150 XL Regular Cab SWB 2WD)
  • SUV: Toyota RAV4 (Toyota RAV4 LE AWD)
  • Car: Toyota Corolla (2024 Toyota Corolla L CVT)

We calculated car running costs based on an Ontario resident who drives 20,000km a year split 45/55 between city and highway driving. We assumed the owner would fill up their car with gas priced at $1.69 per litre.

2024 Ford F-1502024 Toyota RAV42024 Toyota Corolla
Car expenseMonthly costMonthly costMonthly cost
Financing$848.85$567.53$403.80
Gas$338.68$217.15$182.08
Maintenance$104.94$128.41$107.78
Insurance$141.54$136.50$136.85
Total monthly car cost$1,434.01$1,049.59$830.51

The figures in the table above were taken from the CAA Driving Costs Calculator. As you can see, a big pickup like the F-150 is significantly more expensive to own than a compact sedan like the Corolla.

There are also plenty of other variables to consider. For example, we used new-model vehicles. So, if you have an older vehicle, you might have a lower monthly car loan payment but spend more on maintenance.

Your car insurance costs vary depending on where you live and your driving history. The cost of gas will similarly vary depending on how much you drive.

Car ownership cost breakdown: How much should I spend on a car?

Car costs in Canada can be broken down into six main categories.

1. Financing

Unless you plan to pay for a car with cash, your monthly car loan payments could last anywhere from 12 - 96 months, depending on the loan term you choose. A longer term will result in lower monthly repayments, but you’ll end up paying more interest in the long run.

The best way to get a low car loan interest rate is to compare your options before signing on the dotted line. Learn more about the best car loans in our guide.

According to Statistics Canada, the latest average car loan interest rate is 7.79%.

To give you an idea of what your car payment might be, let’s look at the following example.

$26,520 car loan at 8.09% over 72 months

Say you’re buying a new base-model Toyota RAV4. The MSRP is $33,150. After making a 20% down payment, you need to finance the remaining $26,520. With a 72-month car loan and an 8.09% interest rate, you’re looking at a monthly payment of $466.15.

You’ll end up paying $7,042.64 interest over the life of the loan.

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2. Average fuel cost per month in Canada

You can look up most cars’ fuel economy ratings using the search tool on the Natural Resources Canada website. This helps you choose vehicles based on fuel consumption and your driving needs.

The price of fuel can fluctuate on any given day by as much as a few cents per litre. Depending on your car’s mileage, the overall cost of filling the tank could be higher or lower each month as well.

3. Average maintenance cost for a car

Budgeting for common car maintenance costs now can help you cover expensive repairs down the road. Visiting a mechanic regularly means you may be able to spot problem areas in advance, which is especially important when your car is no longer covered by a warranty.

The average maintenance cost for a car varies depending on your vehicle’s make, model and year. The CAA Driving Cost Calculator provides a rough estimate of how much you might pay for maintenance for different makes and models based on the manufacturer’s recommended service schedule.

A good set of winter tires is essential for driving in Canada. Some provinces even require it by law. A set of four winter tires could cost approximately $900.

It’s worth pointing out that some car expenses are annual like oil changes, tire rotations and logbook servicing. Other costs, like replacing your tires, only pop up every few years.

4. Licence, registration and parking fees

You can calculate the average cost of owning a car by adding these smaller expenses together:

  • Registration. Your province or territory’s annual motor vehicle registration fee will be a regularly occurring cost. However, Ontario waives licence renewal fees.
  • Fees. Parking fees and tolls can increase the cost of car ownership. Parking in cities like Toronto, Montreal or Vancouver can be pricey. Underground parking garages in big cities can run from $50 a month all the way up to $375 a month. Be sure to consider where you’re going to leave your vehicle when it’s not in use.

5. Insurance premiums

You’ll typically spend between $1,000 and $3,500 per year on car insurance—though this varies widely depending on the coverage you choose, your age, your driving record, where you live and how much you drive. Insurance is one of the biggest expenses to consider when looking into the cost of owning a car.

The best thing you can do is compare your auto insurance rates before signing or renewing with a company to ensure you’re getting the best rate for your situation. It’s also worth noting that while you can take out car insurance to cover expensive risks like accidents, theft, storm damage and vandalism, you’ll need to pay a deductible if you make a car insurance claim.

Read our full guide to car insurance in Canada to compare your options.

How does depreciation factor into my car costs?

Depreciation is a car’s loss of value over time. It isn’t an out-of-pocket expense like the other factors on this list, but it impacts the total cost of owning a car. In general, new cars lose over 20% of their value within the first year. By the end of five years, a new car may lose 40% – 50% of its value.

According to the CAA Driving Costs Calculator, the three vehicles we compared would depreciate at the following rates per year:

  • Ford F-150: $4,631
  • Toyota RAV4: $2,841.40
  • Toyota Corolla: $2,117.80

Opting for a car that has a slower rate of depreciation can help you avoid having an upside down car loan, or owing more than your car is worth. In the 2023 Canadian Black Book Retained Value Awards, the following brands were named the best at retaining their vehicle value:

Car

  • Winner: Honda
  • 2nd: Chevrolet
  • 3rd: Toyota

SUV/Truck

  • Winner: Toyota
  • 2nd: Ford
  • 3rd: Subaru

Luxury

  • Winner: Porsche
  • 2nd: Mercedes-Benz
  • 3rd: Lexus

Battery Electric Vehicle (BEV)

  • Winner: Porsche
  • 2nd: Volkswagen
  • 3rd: Mini

Taking steps to reduce your car’s depreciation can help you get more money when you decide to sell or trade it in down the road.

Read our guide to car depreciation for more information.

How can I reduce the cost of owning a car?

Here are a few ways to reduce the average cost of owning a car in Canada:

  • Buy used. If you’re stuck between a new and a used car, opt for lightly used. Someone else already bore the brunt of depreciation, so you’ll pay far less for a car that’s nearly as good as new. A good rule of thumb to remember when shopping for a used car is to estimate that someone has driven about 20,000km per year, so a 3-year-old car should have about 60,000km on it.
  • Don’t go too cheap. Buying the cheapest car you can find isn’t necessarily going to save you money in the long run, as it could cost more to maintain and might have bad gas mileage.
  • Refinance your car loan. An expensive monthly car payment is a quick way to suck your budget dry. If your credit has recently improved, you might find that refinancing your car loan is an easy way to lower your monthly repayment.
  • Shop for a new insurance quote. A high insurance premium can add to the cost of car ownership. Take the time to compare quotes and see what other providers can offer.
  • Bigger doesn’t mean better. A bigger car can cost significantly more to run than a sedan or hatchback.
  • Stay on top of maintenance. Car manufacturers recommend regular servicing and maintenance, and it’s often required to keep your warranty in effect. This can reduce the risk of having more expensive repairs in the future and minimize the total lifetime cost of owning a car.

How can I calculate the cost of owning a car in Canada?

Start by trying to get accurate estimates for all of your different car costs.

  1. Car price. Decide which car you want to buy, and narrow down your options. If you want to buy used, check sites like AutoTrader.ca and Kijiji to get an idea of how much cars are going for.
  2. Car loan. Get preapproved for a car loan, so you know what interest rate you might get.
  3. Fuel cost. Estimate how much your car will cost to fuel up using the search tool on the Natural Resources Canada website.
  4. Insurance. Shop around for car insurance. A car insurance broker can give you multiple quotes using one application.
  5. Repairs. Estimate how much you’ll need to spend on maintenance. The older the car is, the more you’ll need to set aside.
  6. Fees. Look up how much it costs to register and renew your car’s registration in your province.

You can also use online resources like the CAA Driving Cost Calculator, which provides a yearly estimate for different makes and models based on depreciation and five other factors. This give you an idea of the cost of owning a car in Canada based on a five-year loan or lease.

Bottom line

Owning a car means paying for financing, insurance, gas, maintenance, fees and depreciation—which brings the overall cost to tens of thousands of dollars during years of ownership. Using this guide to understand the average car price in Canada and how much a car actually costs to own and drive will help you budget more effectively and choose a car you can afford.

When you’re ready to hit the dealership, compare car loans ahead of time to find the best rate available to you.

Frequently asked questions

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To make sure you get accurate and helpful information, this guide has been edited by Leanne Escobal as part of our fact-checking process.
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Written by

Writer

Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

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