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How much does it really cost to own a car?

Your monthly expenses don't stop at your car loan payment.

Car ownership can bring a lot of freedom and flexibility to your life — but it also comes with a financial commitment that lasts long after your car loan is paid off. If you’re looking to create a budget for your next car, take these factors into account when determining how much it will cost you in the long run.

CarsFast Car Loans

CarsFast Car Loans


4.9 % APR


  • New and used vehicles
  • Multiple financing options
  • Pre-approval in 60 seconds

CarsFast Car Loans

Apply online in just 2 minutes and browse thousands of vehicles from dealers across Canada. Get the vehicle delivered right to your door.

  • Interest Rate: 4.90% to 29.90%
  • Loan Amount: $500 - $75,000
  • Loan Term: 12-96 months
  • Eligibility: Min. income of $1,800 /month, 3+ months employed
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What is the actual cost of owning a car?

The average cost to own a compact car is estimated at $8,600 per year. However, this number can vary considerably. For example, according to the Canadian Automobile Association (CAA) a 2017 Honda Civic driven in Ontario could cost over $10,000 to operate annually.

This amount represents vehicles driven about 20,000 km a year and includes the cost of fuel, maintenance, repairs, insurance, fees, depreciation and loan payments. The loan payment alone in our example was estimated to be $345 a month.

However, these numbers are just averages. Your actual cost of car ownership will differ depending on how often you drive, where you live, what you drive and other factors. Use these numbers as a guideline when estimating your own annual budget.

How can I calculate the cost of car ownership?

The easiest way to calculate the cost of owning a new or new-to-you car is to look at online resources like the CAA Driving Cost Calculator. This calculator gives you a yearly estimate for different makes and models based on a 5-year long loan or lease.

It takes 5 factors into consideration — alongside depreciation — to give you an idea of how much it will cost to own a specific car.

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 your car. In general, new cars lose over 20% of their value within the first year. And by the end of five years, a new car may lose 40% – 50% of its value.

Opting for a car that has a slower rate of depreciation can help you avoid becoming upside down on your car loan — meaning you owe more than your car is worth. And taking steps to reduce your car’s depreciation can help you get more money when you decide to sell it or trade it in down the road.

How can I lower the cost of owning a car?

From opting for a used car to keeping up with maintenance, here are four ways to lower the cost of car ownership:

  • Buy used. If you’re stuck between a new or a used car, opt for lightly used. Someone else has already taken the brunt of the depreciation, so you can pay far less for a car that’s nearly as good as new.
  • Refinance your car loan. An expensive car payment is a quick way to suck your budget dry. If your credit has recently improved, you may find that refinancing your car loan is an easy way to lower your monthly repayment. You can compare low interest rate car loans using our guide.
  • Shop for a new insurance quote. Like your monthly payment, a high insurance premium can add to the cost of car ownership. Take the time to shop for quotes and see what another provider may be able to offer.
  • Maintain your car regularly. Car manufacturers recommend regular servicing and maintenance — it’s often required to keep your warranty in effect. This can help reduce the risk of a bigger repair later on.

Compare car loans

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
CarsFast Car Loans
4.90% to 29.90%
12-96 months
Min. income of $1,800 /month, 3+ months employed
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Loans Canada Car Loans
0% to 29.99%
3-96 months
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
Car Loans Canada
3.99% to 29.95%
12-84 months
Min. income of $2,000 /month, 3+ months employed
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Coast Capital Car Loan
18-84 months
Able to service debt payment of $300/month
Finance or lease both new and used vehicles with competitive rates and flexible terms from one of Canada's largest credit unions. No credit union membership required for this product.
Canadian Auto News
3.99% to 29.95%
12-84 months
Min. income of $2,000 /month, 3+ months employed
Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
LoanConnect Car Loans
9.90% to 46.96%
3-120 months
No min. income requirement
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
Canada Auto Finance
3-96 months
Min. income of $1,500 /month, 3+ months employed
Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
1.90% to 19.99%
Up to 72 months
Min. income of $1,600 /month, 3+ months employed
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
Fairstone Secured Personal Loan
19.99% to 23.99%
36-120 months
Established credit history and own your home
Fairstone offers secured personal loans up to $50,000.

Compare up to 4 providers

Bottom line

A car can cost tens of thousands of dollars over the course of five years. Using sites like the CAA Driving Cost Calculator to create a yearly budget can help you pick a car you’re able to afford in both the short and long term.

When you’re ready to hit the dealership, compare car loans ahead of time to find the best rate available to you — and lower the cost of your car payment.

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