Wednesday, October 28, 2026
Owning a car costs more than just monthly payments. Insurance, gas, repairs, and new tires, the hidden costs of car ownership add up fast. Learn how to keep car costs from straining your budget.
Car ownership is one of the largest monthly expenses for most Canadians. Buying a car is itself expensive, but the costs don’t stop with just purchasing a vehicle. Insurance bills and unexpected repairs can easily strain your finances.
Add in fluctuating gas prices and sets of tires, and you might find that your car costs far more than you initially thought. Understanding what to expect and planning ahead can help prevent your car from becoming a financial burden. Let’s examine some of the more overlooked expenses of car ownership and how to prepare for them.
The average cost of a new car in Canada is $63,016, according to the AutoTrader price index report for Q2 of 2026.
There are of course cheaper options; a new Toyota Crorolla costs $31,243, for example.
Used cars are, of course, cheaper. The average used car costs $36,690 in Canada.
If you were to buy a used Toyota Crorolla, it would cost around $22,725.
A used Honda Civic is even cheaper, at $19,556.
All this goes to say that regardless of what kind of car you buy, new or used, it will likely cost tens of thousands of dollars.
This won’t be surprising to anyone who already owns a car, of course. Transportation is the third largest cost for Canadians, only behind housing and food, according to Statistics Canada.
Some costs of owning a car are the same every month. These are bills you can prepare for, as they don’t change over time.
When you buy a car, you typically make a down payment and then pay off the remaining cost through a car loan.
Most car loans for new vehicles in Canada last between six and eight years, locking you into payments for the better part of a decade.
Your monthly car loan payment will depend on several factors: the vehicle's purchase price, the amount of your down payment, the interest rate you qualify for, and your loan term length.
Your monthly payment depends on the vehicle's price and your down payment amount.
If you buy a cheaper car with a lot of money down, you’ll have a lower monthly payment than someone who buys an expensive car with a small down payment.
Your credit score also affects your car loan amount. The better your credit score, the lower the interest rate on your car loan.
How to pay less on a car loan:
Make the largest down payment you can afford. This is the best way to significantly lower your monthly payments.
If possible, you should get a shorter-term length for the loan. Longer loans may have smaller monthly payments, but it means paying more interest over time. A shorter-term loan will cost more monthly but save you money in the long run.
When you get a new vehicle, you’ll also be required to get car insurance, and it's not cheap.
The cost of car insurance depends on numerous variables such as your driving record, the type of vehicle you own, where you live, and your age.
As there’s so many variables it’s impossible to say what you’ll have to pay each month, but many Canadians spend over $1,000 a year on insurance alone.
How to pay less for car insurance:
You should shop around for your car insurance to find the best rate. You can also often save money if you bundle your home and auto insurance.
You’ll also pay less if you have a clean driving record and drive a less expensive vehicle.
Not all car costs are consistent. You need to plan for fluctuating costs and the unexpected as well when owning a car.
One day your car is fine; the next you’re hearing some clunking noise coming from it as you drive to work.
Even if your car is running perfectly now, repair and maintenance costs are unavoidable. These costs are unexpected and often expensive. The older your vehicle gets, the more likely you’ll need to make costly repairs.
The average Canadian may spend around $1,500 on car maintenance each year, according to Canada Drives.
The total amount spent on repairs may be spread throughout the year, or it may a one-time visit to the auto shop that costs you an arm and a leg.
How to save money on car repairs:
Setting up an emergency fund is the best way to minimize the cost of car repairs. An emergency fund allows you to use money you’ve already put aside for a situation like this, instead of relying on a credit card.
It’s also smart to compare prices between repair shops or get multiple quotes before agreeing to any major work.
Unless you have an electric vehicle, you’ll have to pay for gas. Gas is notorious for being unpredictable in price from week to week.
How much you spend depends on the price of gas, how much you use your car, and what kind of vehicle it is.
Regardless, filling up your tank can easily cost you upwards of $100 these days.
How to save money on gas:
The best way to find out the lowest gas prices near you is to use the GasBuddy app. It shows you the prices of the gas stations around you, allowing you to pick the cheapest one.
The truly best way to lower the amount you pay for gas is to reduce how much you use the car, though. Consider using public transit instead sometimes if it’s an option.
You should also avoid unnecessary idling; getting out of your car instead of sitting in line at the drive-thru is one way to reduce this.
Tires are one of the hidden costs many people forget about car ownership.
You should have two sets of tires, one for the winter and one for the rest of the year.
If you’ve never bought tires before, be prepared to realize how expensive they are.
It’s not hard to spend $300 before tax on each individual tire, a total of $1,200 for four tires. That’s before you factor in installation costs and the cost of storing the extra set if you don’t have space at home.
Winter tires typically last about five seasons, while summer or all-season tires may last four to six years depending on mileage and road conditions.
This is a cost you can prepare for, as you know when your tires will need replacing.
How to save money on tires:
Look for seasonal sales, which often happen in the fall and spring. You can also compare prices online before visiting a local shop to ensure you’re getting the best deal.
If the ongoing costs of your car are starting to feel overwhelming, we can help you find a solution. One of our Licensed Insolvency Trustees can fully evaluate finances to help you find a path forward.
They recommend a consumer proposal, which not only reduces the amount of money you owe, but also allows you to keep your car.
Your first consultation is free, completely confidential, and judgment-free.
Our Trustees goal is to help you find real, practical solutions to debt.
Wednesday, October 28, 2026
Owning a car costs more than just monthly payments. Insurance, gas, repairs, and new tires, the hidden costs of car ownership add up fast. Learn how to keep car costs from straining your budget.
