What is the total cost of ownership for a car?

This post was originally published on January 1, 2020, and was updated on February 11, 2026.

Car ownership is one of the largest expenses for Canadian households. According to Statistics Canada, transportation is the third-largest household expense at 15% of spending, behind shelter at 31.4% and food at 15.4%. In addition to the upfront cost of purchasing a vehicle (or regular monthly payments), there are other ongoing expenses, including maintenance, gas, parking, and car insurance, just to name a few. 

When we crunch the numbers, in 2026 the total cost of owning a car is about $1,373 per month, based on the average purchase price, loan terms and ongoing expenses. This is a slight increase in cost year over year (YoY), with 2025’s total coming at $1,370.

Let’s break down the primary costs of car ownership so you can better understand the financial considerations for your purchase.

Monthly ownership costs

Jump to see the complete monthly calculations. 

Total cost over nine years (average ownership lifespan)

Jump to see the complete nine-year ownership calculation.

Detailed monthly expense breakdown

What is the cost of your car payment?

According to data from the Q3 2025 release of the AutoTrader Price Index, the average selling price of a new car was $63,264 – the lowest since July 2022. Add 13% sales tax for a total cost of $71,488.32. Combined with December 2025 data from Statistics Canada, which shows the average APR on new auto loans has softened to 6.45%, the average brand-new car costs somewhere around $955.20 per month to finance over an eight-year term.

This number has been falling over recent years thanks to lower vehicle prices and interest rates. Last year’s data showed a monthly payment of around $1,022, a difference of $67 per month or 6.5% YoY. 

If you’ve saved and set aside some money for a down payment, you can expect your monthly auto payment to be lower. Paying enough upfront to cover the tax on an average new car brings the payment to $845 per month. This is down from the $905 it would have cost last year, based on the same calculation.

Supply chain issues have continued to limit the amount you can save by buying a used car, and prices have rebounded since reaching a low point in December 2024. According to AutoTrader’s 2025 Q3 report, the average price of a used car is up 3.2% YoY to $36,911. Since interest rates on used car financing tend to be higher (around 10% to 12% for those with good credit) and repayment terms tend to be closer to six years, the payment on an average used car is likely to be around $773 per month. 

If we assume the same logic as buying a new car and putting down a payment to cover the sales tax (13%) on an average used car, it would bring your monthly payment down to $684, using a 10% interest rate.

Average car payment methodology

For our average total cost scenario, we have averaged out the difference between a new car and used car prices reported by AutoTrader (listed above), which gets us to $50,088 as the controlled vehicle price for our analysis. We then took an average interest rate between a new car (6.45%) and a used car (10%), which got us to 8.23% for an eight-year loan. Lastly, we included a 13% down payment to cover the sales tax. This total calculation gets us to around $714 per month for this scenario. Over the course of the loan term, an average of $192 of each payment is devoted to interest.

Jump to see how this breaks down for the cost of a new or used car. 

What is the average cost of gas per month?

The fuel consumption of vehicles ranges widely, from the electric Hyundai Ioniq 6, which uses the equivalent of just 1.7 litres of gasoline per 100 km travelled, to the audacious Bugatti Chiron Pur Sport, which sucks down 26.1 litres per 100 km.

For the purposes of this article, we’ll look at a popular choice for Canadian families, the Toyota RAV4. This best-selling Canadian SUV uses an estimated 7.9 litres per 100 km. 

While data on how far Canadians drive since the pandemic is hard to find, Natural Resources Canada uses an estimate of 20,000 km per year in its Fuel Consumption Guide. That works out to 385 km per week, which feels right for a daily round-trip commute of 40 to 50 km plus some casual driving to get groceries, visiting friends and family, or running other errands, like taking your dog to the vet.

These estimates work out to 132 litres of fuel consumption per month. At the current national average gas price of $1.251/litre, your new Toyota RAV4 will burn $165 per month in gas. Based on 2025’s peak average price of $1.556/litre, things are certainly looking better than last year’s expected monthly fuel cost of $203, approximately $38 in monthly savings. 

The cost of fuel can be much lower if you drive an electric vehicle. Canada’s most popular all-electric vehicle, the Tesla Model Y, is officially rated to use 17.2 kWh per 100 km travelled. Whereas the cost of hydro in Canada ranges from roughly 8c to 19c per kWh, a similar electric car would cost only $23 to $54 per month to power.

What is the average cost of car maintenance?

Canada Drives states that the current average cost of car maintenance is around $1,400-1,500 annually, so we’re averaging this out to around $120 per month. The cost of maintenance has shifted significantly over the past 8 years. As of 2018, CAA was averaging expenses around $50 monthly and in 2022, Statistics Canada had the average Canadian household spending around $80 per month to maintain and repair vehicles. Keep in mind that these average figures can vary drastically depending on your car and the type of maintenance required. For example, it can cost significantly more to repair or maintain your electric vehicle due to the technology.

What’s really driving the increased maintenance costs for Canadians? It’s worthwhile to note that inflation in Canada has hiked auto repair and maintenance costs. The J.D. Power 2025 Canada Customer Service Index—Long-Term Study found that the average cost per visit to a dealership increased by 16.9% in a year, from $465 to $539. Similarly, the average cost to an independent shop increased by 10.6% from $273 to $302. Despite the increase, inflation is causing car owners to keep their vehicles longer, opting for repair rather than a new car.

Further complicating the issue is access to vehicle technology data. A recent report from the Automotive Industries Association of Canada shows that independent repair shops lack access to important vehicle repair information. This means that some repair information is often paywalled or hidden, which increases repair costs, and manufacturers sometimes safeguard information so that repairs must be completed at a dealership. This disruption to the automotive repair landscape is contributing to the rising costs of maintenance for Canadians.

What about car administrative fees?

The cost of registering and licensing your car varies by province and ranges from $60 to $200 per year.

If you live in Ontario, you will need to pay a $32 licensing fee to register a new (or new-to-you) car, plus $59 if you require a license plate, but there is no fee for annual renewals as of March 2022. Ontario’s emission testing requirements for older cars were cancelled as of April 1, 2019.

How much do you spend on parking?

If you live outside of a major centre, parking may not be much of a consideration. But if you live or work in a big city, it can be a major expense.

There are no recent statistics on parking costs in Canada, but a quick spot check with parking company Impark shows that spaces go for a range of $200 to $300 per month in Vancouver and Montreal, $200 to $400 in Toronto, and $200 to $500 or more in Calgary.

Your own parking expense will vary, but for this analysis, we’ll estimate $200 per month, which could be particularly low or high depending on where you keep your car when you’re not using it. 

What is the average cost of car insurance?

It’s hard to pinpoint the exact average cost for car insurance in Canada, as there is no updated source of truth. The latest statistics from 2023 put the price somewhere between $1,300 and $1,800. Depending on your situation, your price could be higher or lower than the national average. This is due to the complex rating algorithms each company uses, which consider many factors in how auto insurance rates are calculated and applied to determine your personal premium.

What we can say for certain is that car insurance premiums are rising in Canada as the industry faces another tough year. 2024 was a record year for claims in the P&C industry due to severe weather events, and 2025 finished inside the top 10 most expensive years on record. Layer on the persistent issue of vehicle theft and fraud throughout Canada, and it’s no wonder we’re seeing a steady rise in the cost of auto insurance.

Last year, we estimated an average rate of $1,725 per year (about $143 per month) by adjusting the 2023 insurance statistic for inflation using Applied Rating Index data. This year, Applied’s latest rating index report shows a +14.4% increase in national car insurance rates as of the end of 2025. Applying this percentage increase to our 2024 rate yields $1,973 per year, or approximately $164 per month. This means the annual cost of auto insurance for Canadians has gone up by approximately $252.

While many factors can seem out of your control, remember that comparing car insurance quotes is still the one thing you can do to help yourself find the best rate.

What is the total cost of ownership for a car?

The total cost of car ownership in Canada shows an actual cash expense of $1,373 per month, including all car payments (average price of a new and used car), gas, maintenance, and auto insurance costs. The average price of car ownership increased slightly compared with 2025, but it is still down from the highs of 2024. Part of the reason for the increase YoY is due to rising insurance and maintenance fees that are offsetting the decline in average vehicle pricing, financing rates and cost of gas. 2024, though, is still at peak cost due to high interest rates, expensive gas, and higher average vehicle prices for Canadians.

Check out the split expenses in the table below:

The 2026 values are calculated using the latest available data from 2025.

What is the total average lifespan cost of owning a car?

While older cars generally cost more to maintain, the overall expense of owning a car decreases the longer you own it. That’s mostly because depreciation slows greatly after the first five years, but also because of savings on interest after any loans are paid off. According to Canada Drives, the average Canadian keeps a new vehicle for eight to nine years. 

The table below shows the total cost of car ownership over nine years for an average-cost car, a new car and a used car. The calculation accounts for differences in loan repayment terms; once the loan is paid off, the monthly payment drops to ongoing expenses only. 

Note: This calculation does not account for potential inflation in insurance, maintenance or gas over nine years (i.e. the average lifetime ownership period of a car in Canada). Depending on your vehicle and location, actual costs may vary, especially as cars depreciate in value.

When selecting which vehicle to purchase, keep in mind that over the average 9-year ownership period, new car owners will pay about $32,000 more than drivers who own a used car. This is because of the higher purchase prices and generally longer loan terms, which increase the total cost of ownership. Overall, the average cost of owning a car in Canada for 9 years is approximately $140,000.

The bottom line

Owning a car is not a cheap expense for Canadian drivers, and each vehicle now costs an average of $1,373 per month in cash expenses. While Canadians are saving on average on MSRPs, financing rates, and gas YoY, other costs continue to rise, offsetting these potential savings (e.g., insurance & maintenance). 

To help make car ownership more affordable, you could seek additional savings by choosing a cheaper vehicle or opting for alternative transportation when possible. But remember, the key to saving on any purchase is to always shop around for the best deal, including shopping the market for the best car insurance rates by comparing quotes online at Ratehub.ca.

Also read:

• A complete guide to buying a car in Canada
• 15 ways to get cheap car insurance in Canada
• Inflation and your car insurance – what you need to know
• Leasing vs. financing a car (and how it affects your insurance)