Whether it’s your first or second vehicle, owning a car is a great feeling. Nowadays, advertisements can make it seem like owning a car is well within any Canadians financial reach. However, is this really the case?
With dealerships offering no down payment, modest interest rates, and payments spread over several years, Canadians nowadays can get behind the wheel of a new car for $600 a month. This number can be significantly less if you’re buying used. Yet, as every driver knows, costs pile up with every kilometre. In fact, your total cost of ownership can far exceed the car’s purchase price by tens of thousands of dollars. So, just how much does it cost to own a car in Canada? Let’s take a look.
How Much Does It Cost to Own a Car in Canada in 2026? (Full Breakdown)
So, how much can one expect to pay to own a car? According to Autotrader.ca, the average price of a new vehicle was $63,264 for the end of 2025. This is roughly $2,000 less than the average price of a Ford Mustang, and $1,000 more than a Toyota Tacoma.
Nowadays, those on a tighter budget who plan to own a car may want to take the used-car route. On Autotrader.ca, the average used car at the end of 2025 was roughly $36,911. This is a far more modest price than a new car. To put things into perspective, the price of a used car nowadays is close to the average cost of a new car less than 10 years ago, according to Autonews.ca.
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Average Cost of New vs Used Cars in Canada (2026 Prices)
With car prices higher than ever, those seeking to own a vehicle rely on financing. In Canada, most auto loans range from 0/99% to 29/99%, depending on different factors. These factors can include loan terms, loan size, and whether the vehicle is new or used.
However, if you plan to own a vehicle, the most influential factor is your credit score. An “excellent” score of 750 or higher may qualify you for a five-year loan at a higher percentage rate. On the other hand, a “fair” credit score of 560-659 could put you in the 9%-14% range. With an average APR (annual percentage rate) being 4% for good credit scores and the average monthly payment for a new vehicle at $63,264, you can expect to pay roughly 1,054 a month to finance a new car.
Used vehicles, on the other hand, can be more expensive to finance. Typically, an APR (annual percentage rate) is 5-10% for someone with good credit. Assuming a three-year loan at a 6.25% APR, you can expect to pay roughly $1,019 a month if you plan on owning a used car.
Vehicle Registration & Licensing Costs in Ontario
One of the most crucial steps in owning a car is registering it! Registering your vehicle with your provincial government establishes ownership. It also links your vehicle to a unique licence plate. Luckily, for us Ontarians, we have some of the lowest vehicle registration costs. A vehicle permit will run you $32, while a licence plate will cost $59. These are both one-time payments.
In other provinces, you can expect to pay more. Registration must be renewed annually or biannually, depending on the province. In British Columbia, you can expect to pay $64. In Nova Scotia, you can expect to pay more than $300 for vehicle registration and licensing costs if you plan to own a car.
Owning A Car In Canada: Insurance
Your next major expense when it comes to owning a car? Insurance! This one arrives before you even take possession of your new (or used) vehicle!
Many factors will affect what you’ll pay for insurance, including the type and value of your vehicle. However, insurance costs can vary widely by province. This is due to legal frameworks and mandatory coverage rules. To add to this, where you live within a province can also play a huge part. This is because considerations such as theft and collision rates tend to differ across cities and rural communities.
For example, in Ontario, the average annual premium is roughly $2,164, according to the Financial Services Regulatory Authority of Ontario. This results in monthly payments of $180. If you plan on owning a car and live in the GTA, you can expect to pay a bit more, $2,810 a year. Other urban areas can expect to pay roughly $2,076, with rural areas paying $1,740 a year.
What Affects Your Car Insurance Rates in Canada?
When it comes to owning a car, it’s important to note that personal factors play a major role insurance-wise. Most insurance companies will consider your age, gender, driving record, annual mileage and, in some provinces, your credit history when it comes to figuring out your premiums.
Even in cases when repairs are covered by insurance, you may still have to pay a deductible. This is usually $500 to $1,000. In most cases, the lower your deductible, the higher your premium. Fortunately, there are many ways to reduce your auto insurance costs. Some examples of this could include using winter tires, installing anti-theft devices, and simply comparing policies to get the best deal possible!
Fuel vs. Electric Vehicle Costs in Canada: Gas Prices & Charging Costs
Let’s face it: in today’s world, fueling your car is the most visible cost of driving. On top of this, it’s also the most frequent cost. The cost of fuel when it comes to owning a car in Canada will, of course, depend on gas prices. On top of this, it is important to consider fuel efficiency and how much you drive.
- Gas Prices: In 2025, the national daily average price for unleaded gas ranged from $1.20 to $1.56 a litre.
- Fuel Efficiency: According to the International Energy Agency, the average fuel efficiency of a new gas-powered vehicle was 8.8 L/100 km in 2019.
- Distance You Drive: The average person drives 13,000 km a year, roughly. However, it is important to note that if you drive daily, you may clock in at a higher number, such as 20,000 km.
When looking at this, we can estimate that fuel costs come to roughly $148 a month, or $1773 a year. For electric vehicles, you’ll save a bit more. Electricity rates vary by province, but the federal government’s 2026 fuel consumption guide uses $0.18 per kilowatt-hour for its calculations. If we multiply that by 17.3 kWh per 100km and 13,000km of annual travel, you’ll be paying $34 a month to power your vehicle.
How Much Does Car Maintenance Cost Per Year in Canada?
Though you may save money in the short term by skipping repairs, chances are you’ll pay for it in the long run. When you follow your manufacturer’s maintenance schedule, you can extend a vehicle’s life. On top of this, you preserve resale value, protect warranties and improve overall safety.
Excluding collisions, which insurance is for, there are many routine maintenance steps to take. For a typical gas-powered car, owners are responsible for both oil and filter changes every six months, or 8,000 km. This will cost roughly $80-$120. On top of this, tire rotations are every 12,000 km ($50), and brake service is every 40,000 km ($350). For a relatively new vehicle, annual maintenance can cost $300-$700.
Winter Tire Costs in Canada: Installation & Savings
In a country like Canada, using winter tires is mandatory. Unfortunately, these can’t be used year-round, as their rubber stiffens in warm weather. This is why switching during the winter is crucial, and another cost when it comes to owning a car in Canada.
Winter tires will cost about the same as all-seasons, but swapping them twice a year will add some expense. Using one set of rims for both sets of tires will generally run you $100 to $150 per change. Though this will increase upfront costs, they will pay for themselves over time. This is because switching to them extends the lifespan of your all-season tires. To add to this, the safety benefits are substantial. To add to this, you may be eligible for insurance discounts when using winter tires in Canada! Contact your insurer to see if you qualify.
Owning a Car in Canada: Conclusion
At the end of the day, owning a car is a practical necessity for many Canadians. For others, it may just be convenience. Regardless of the reason, it’s important to understand what goes into the total cost of owning a car. Remember, if you have any insurance questions, don’t hesitate to reach out to us at isure!
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