How much does it cost to own a car in Canada?

The way advertising makes it sound, car ownership seems well within most people’s financial reach. With no down payment, a modest interest rate and payments spread over seven years, about $600 a month can put you behind the wheel of a brand-new car—less for a used one.

But sitting in the driver’s seat isn’t the same as driving. With every kilometre travelled, the costs pile up. By the time you’re done with your car, your total cost of ownership can exceed the purchase price by tens of thousands of dollars.

How much is the price of a car in 2026? 

Let’s start with purchase prices for new and used vehicles in Canada. In September 2025, the average price of a new vehicle was $63,264 according to AutoTrader.ca. That’s about $2,000 less than the average price of a Ford Mustang and $1,000 more than a Toyota Tacoma.

If you’re looking to spend less and can live without that new-car smell, a used vehicle may be a better option. On AutoTrader.ca in September 2025, the average used car was priced at a far more modest $36,911. (For context, that price was close to the average cost of a new car less than 10 years ago.)

Related: New vs. Used: Comparing the Ford F-150 and the Toyota RAV4 | Rates.ca

How much are financing costs in Canada?

At those dollar amounts, most buyers rely on financing. Interest rates on auto loans range from about 0.99% to 29.99%, depending on factors such as loan term, loan size and whether the vehicle is new or used.

The most influential factor is your credit score. An “excellent” score (750 or higher) might qualify you for a five-year loan at an annual percentage rate (APR) of around 3.99%, while a “fair” score (560–659) could put you in the 9%–14% range.

Now for some math.

Spread over five years at a 4% APR—which is below the average rate on outstanding auto loans in Canada (6.88%, according to Statistics Canada), but typical of manufacturer-backed financing—your monthly payment would be $1,054.

For a used vehicle, the average purchase price after tax would be $41,709. A 20% down payment still makes sense, but given the vehicle’s age, a shorter loan term is prudent. Used car financing is also more expensive, typically 5-10% for someone with good credit. Assuming a three-year loan at a 6.25% APR, your monthly payment would be about $1,019.

What does vehicle registration and licensing costs? 

Registering your vehicle with your provincial government establishes ownership and links the vehicle to a unique licence plate. Ontario has the lowest registration costs: $32 for a vehicle permit and $59 for a licence plate, paid once.

In most other provinces, registration must be renewed annually or biannually, with fees ranging from $64 in B.C to more than $300 in Nova Scotia.

How much is car insurance in Ontario and other provinces? 

Your next major expense arrives before you even take possession of your vehicle: insurance.

The type and value of your vehicle affect your premium and any applicable surcharges, but insurance costs vary widely by province due to differences in legal frameworks and mandatory coverage rules. However, where you live within a province also matters due to differing theft and collision rates across cities and rural communities. Depending on where you live in Ontario, for example, you could end up paying these rates.  

(Data from the Financial Services Regulatory Authority of Ontario)

Personal factors also play a major role. Insurers consider your age, gender, driving record, annual mileage and, in some provinces, your credit history. Young men under 25 are typically classified as the highest-risk drivers and are charged accordingly.

Even when repairs are covered by insurance, you may still have to pay a deductible—usually $500 or $1,000, though some policies have none. In general, lower deductibles come with higher premiums.

There are, however, many ways to reduce your auto insurance costs, such as using winter tires from December through March, installing anti-theft devices and shopping for better rates using insurance comparison tools, which can also help you estimate insurance costs before you commit to buying a vehicle.

Read more: 20 ways to get cheaper auto insurance | Rates.ca

What are fuel and electricity costs across different models? 

Now we turn to refueling, which is the most frequent and visible cost of driving.

The cost of fuel for the average Canadian car owner is mostly a function of gas prices, fuel efficiency of their vehicles and how much they drive:

• Gas prices: In 2025, the national daily average price for regular unleaded gas ranged from $1.20 per litre to $1.56 per litre. For our calculations, we’ll use the upper end of that range: $1.55 per litre.
• Fuel efficiency: According to the latest figures from the International Energy Agency, the average fuel efficiency of new gasoline-powered vehicles sold in Canada was 8.8 L/100 km in 2019.
• Distance driven: According to the data from the Rates.ca auto insurance quoter, users average nearly 13,000 km a year. We’ll use that mileage in our calculations, although it’s worth noting that drivers typically underestimate their own vehicle usage. If you drive daily, you may clock in at a higher number like 20,000 km.

Using those figures, fuel costs come to about $1,773 a year or $148 a month. Vehicles that require premium gas will cost roughly 25% more to fuel.

What about electric vehicles? Compared to a gas-powered car, a battery-electric vehicle (BEV) generates the most savings on fuel. Electricity rates vary by province, time of day and household consumption. The federal government’s 2026 Fuel Consumption Guide uses $0.18 per kilowatt-hour for its calculations.

Multiply that figure by an average efficiency of 17.3 kWh per 100 km and 13,000 km in annual travel, and you’ll power your BEV for just $34 a month.

Hybrids fall somewhere in between. For instance, the traditional Toyota Prius hybrid (HEV) has a combined fuel-efficiency rating of 4.8 L/100 km, which translates to $81 a month in gas. But with the plug-in hybrid version (PHEV) of the Prius, the combined gas and electricity cost is just $44.

How much does it cost to maintain and repair your vehicle?

Skipping maintenance may save money in the short term, but it rarely pays off over time. Following the manufacturer’s maintenance schedule — and addressing warning signs promptly — can extend a vehicle’s life, preserve resale value, protect warranties and improve safety.

All new vehicles sold in Canada come with a comprehensive warranty of at least three years, covering defects in materials and workmanship. These warranties, however, don’t cover damage from collisions or other external forces — that’s what insurance is for — or routine maintenance.

For a typical gas-powered vehicle, owners are responsible for oil and filter changes every six months or 8,000 km ($80–$120), tire rotations every 12,000 km ($50), cabin air filters annually ($75), brake service every 40,000 km ($350), and ongoing replacement of wiper blades and washer fluid.

With a relatively new vehicle annual maintenance costs typically range from $300 to $700.

Costs rise sharply as vehicles age and repairs become more frequent. A U.S. analysis of car service records found that a vehicle with 120,000-160,000 km costs an average of three times more to service each year than a vehicle under 40,000 km.

Battery-electric vehicles offer the biggest savings on maintenance. It costs an average of 40% to 50% less to maintain a BEV than a gas-powered vehicle, according to the Canadian Automobile Association, because they have less to maintain: no spark plugs, oxygen sensor, timing belt, fuel filter, engine air filter, engine coolant, engine oil or starter battery, among other items.

Hybrids save less — about 5% for standard hybrids and 10% for plug-in hybrids — because they still rely on gas engines.

None of the above costs includes tire replacement, which typically occurs every 60,000 to 100,000 km. A set of four all-season tires can cost anywhere from $600 to more than $3,000, depending on their size, quality and expected lifespan. A highly rated set of tires for the popular Honda CR-V, for example, can easily be found for $1,000. Installation typically adds $100 to $150, unless included in the purchase price.

Learn more: What is a preferred auto body shop?

What is the price of winter tires

In a country like Canada, using tires that suit wintry conditions is a no brainer. But despite their name, all-season tires lose grip below 7°C as their rubber stiffens. Winter tires remain flexible in cold weather, providing better traction and shorter stopping distances.

Winter tires cost roughly the same as all-seasons, but swapping them twice a year adds some expense. Using one set of rims for both sets of tires typically costs $100 to $150 per change.

For as little as $500 to $600, you can get basic steel rims for your winter tires, thereby cutting your tire change costs to $50 to $60. Many drivers eliminate that expense by changing the wheels themselves.

Although winter tires increase upfront costs, they often pay for themselves over time. Switching to winter tires in the winter extends the overall lifespans of your all-seasons, and the safety benefits are substantial. Nearly eight in 10 Canadians who opt for winter tires say that choice has saved them from a potentially hazardous situation.

Given the financial consequences of a collision — lost income, deductibles and higher insurance premiums — winter tires can be a cost-effective investment in both safety and long-term ownership costs.

Related: Are winter tires worth it?

The more you know, the more you can save

For many Canadians, owning a vehicle is a practical necessity — for holding a job, accessing health care or managing daily life. For others, it’s largely a matter of convenience. Either way, understanding what goes into your total cost of ownership can help you find savings, choose a vehicle that better fits your budget or, maybe, avoid buying a car altogether.