Owning a car in Canada is both extremely rewarding and costly. We are going to take a closer look at what it costs to own a vehicle as a Canadian with average credit and average income. The results may surprise you.
Income figures are going to be based on Statistics Canada’s data and the appropriate data tools to paint this picture. For reference:
Average Canadian Income of Persons over 16: $48,000
This ends up being an average monthly income of $4,000
The most fluctuating cost across the entire year for Canadians is gas cost because it varies depending on the vehicle, driving habits, distance, changing price of oil, and many other factors. However we will be using Natural Resources Canada’s Fuel Consumption ratings tool for 2020 to determine our average yearly cost of fuel.
Average Canadian Fuel Cost per Year: $1,742
This means that the average monthly cost of fuel for Canadians is $145.16
The cost of insurance varies widely across the country, with some of the most expensive insurance being paid b
y BC Residents, and some of the cheapest rates being paid by Quebec Residents. According to Insurance Bureau of Canada:
Average Canadian Insurance Cost per Year: $1,142.70
Which equates to an average monthly insurance cost of $95.22
Based on an average interest rate in the country of between 4 – 6.5%, Canadians pay on average:
Average Canadian Auto Finance Cost per Year: $6,840
This means the average monthly financing cost is $570
Now, if we add our monthly totals:
Average Monthly Fuel Cost of: $145.16
Average Monthly Insurance Cost of: $95.22
Average Monthly Finance Cost of: $570
We are left with an average monthly cost of $810.38 which adds up to be $9,724.56 annually.
Given that cost and our average Canadian monthly income of $4,000, we are left with $3,189.62 to pay for the rest of our standard of living.
Based on the average distance driven by Canadians per year of 20,000 kilometers, you would be paying approximately $0.46 per kilometer, not including depreciation.
These costs can be distributed and reduced in many ways as well, depending on the choices we make. The best way to reduce this cost is to make an informed financial decision from the get-go: buying a car that fits your lifestyle.
We live in a world where information is at our fingertips, and technology has made the car buying process easier than ever, why not use it?