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.
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.
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:
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-150 | 2024 Toyota RAV4 | 2024 Toyota Corolla | |
|---|---|---|---|
Car expense | Monthly cost | Monthly cost | Monthly 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.
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Car costs in Canada can be broken down into six main categories.
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 7.10%.
To give you an idea of what your car payment might be, let’s look at the following example.
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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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.
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.
You can calculate the average cost of owning a car by adding these smaller expenses together:
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.
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:
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:
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.
Here are a few ways to reduce the average cost of owning a car in Canada:
Start by trying to get accurate estimates for all of your different car costs.
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.
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.
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