Average Cost of Monthly Car Expenses in Canada

Average Cost of Monthly Car Expenses in Canada

It’s an expensive affair to own a car in Canada. The general price depends on the model and makes of the vehicle and the driving habits of the individual. Besides the purchase price, additional expenses associated with car ownership include maintenance, insurance, repairs, gas, licensing fees, and parking charges. 

Moreover, getting third-party insurance is mandatory if you drive in Canada. Additional insurance expenses also form a significant chunk of the overall car expenses that you need to cover. 

That being said, if you are looking for affordable car insurance, you can contact a Surex insurance advisor. By contacting Surex, you can compare quotes from various providers in one place and choose a policy that works for you. 

Let’s dive deep into the costs of owning a vehicle in a Canadian province.  

Cost breakdown of car ownership in Canada 

A detailed understanding of your car expenses per month will help you manage your money in a better way. The costs can be divided into seven major categories. Here is a detailed overview of each. 

  1. Fuel cost

Fuel is an unavoidable ongoing expense and consumes a significant chunk of the costs associated with using a car in Canada. Therefore, it is essential to invest in a fuel-efficient vehicle. Get a vehicle with excellent gas mileage.

As of November 2022, the average gas station price is 171.6 Canadian cents per litre. That makes about $103 monthly fuel cost on filling a car gas tank of 60L. 

The figure may vary depending on the ever-fluctuating gas prices and individual consumption of the car owner. 

  1. Financing cost

Buying a new car is a considerable expense. Generally, people take out a car loan to manage their purchases. The loan payments have to be made monthly in most cases. And the amount of installment depends on the vehicle’s purchase price, loan tenure, and interest rate. It’s advised to sign up for the loan for a short period to get rid of this expense more quickly. Besides, the interest cost will be comparatively low.

On average, interest on a car loan in Canada is 5.5% – 8.0% per annum, depending on whether the individual is buying a used or new car and whether they sign up for a variable or fixed interest rate. Online car cost calculators will help you estimate your monthly total interest costs and car expenses using the interest rate, loan term, and purchase price. 

  1. License renewal charges

Car owners in Canada must renew their vehicle registration and license yearly. The cost of renewal varies from one province to another. 

For example, car license renewal in Alberta is about $21 for a year, while it costs $24 to renew a driver’s license in Quebec. Fortunately, license renewal fees are relatively nominal in comparison to other costs. It’s best to be prepared ahead of time and set aside a few hundred dollars to cover this expense.

  1. Insurance Cost

Individuals must have car insurance if they own a vehicle and are in danger of getting into accidents that require car accident chiropractors to fix. The cost of car insurance depends on several factors, including driving record, residential area, insurance provider, etc. The average annual value of car insurance in Canada is $1,300 to $1,800. Some provinces also have government car insurance programs. If the facility isn’t available in your area, you can sign up for insurance with a private company. 

  1. Repair and maintenance cost

No matter how well you maintain your car, it’ll need repair and servicing after a certain period. Its parts start wearing out over time, and its fluids need replacement to keep the vehicle in good condition. 

The cost of repair and maintenance depends on the vehicle type and how frequently it’s used. Your monthly car expenses could range from a few hundred to thousands of dollars, depending on your vehicle’s maintenance cost in your area.  

For example, the average brake repair cost is approximately $600 to $1500, whereas the average price of an oil change is $50 to $100. 

Setting aside around 3% to 4% of your vehicle’s purchase price is recommended as annual repair and maintenance costs. In simple words, if the purchase price of your car is $30,000, you’ll need to spend around $500 to $1000 to maintain its condition. 

Other car expenses that Canadian drivers need to consider

Besides the costs listed above, you should consider the following costs when preparing your car’s monthly expense budget. 

  1. Parking fees 

Individuals living in an urban area are likely to pay parking charges regularly. Usually, street parking is free (but only for a set period of time). 

After the free period, you’ll be required to pay for a parking permit. Parking permit charges significantly impact the monthly car expenses in Canada, and the cost depends on how big and populated your residential city is. Average parking charges are $100 annually.  

  1. Car washing expenses 

Car washing and waxing are both expensive and time-consuming. But these tasks are essential to keep the vehicle clean and shining. You may wash your vehicle at home, but then you’ll need to invest in wax, soap, and other supplies. Make your calculations carefully when deciding on professional cleanup or DIY. 

Tips to save money on your monthly car expenses

  • Invest in a high-quality, fuel-efficient model – The expense of a high-priced and low-priced vehicle is almost the same. The best vehicles with average fuel consumption, low depreciation value, and less maintenance are generally priced high. 
  • Use your car frequently – A car in working condition requires less maintenance.
  • Place your bet on a car model with good resale value – A vehicle with excellent resale value has a low depreciation cost. 
  • Avoid buying large cars – Large car models such as SUVs have high purchase value and high maintenance and repair costs. So be careful when choosing a car model. 


Irrespective of the vehicle type you choose, remember to research and measure all of the expected costs before buying a new or used car. It will help you save a lot of money. 

Also, make sure that you have enough money to cover car insurance expenses, as you won’t be able to drive without a valid policy.

Lastly, make sure that you have a backup plan for unexpected expenses.

Author: Full Editorial