How much does a car cost per month in Canada?

12 minute read Published on Feb 11, 2024 by BrokerLink Communications

How much does a car cost per month in Canada?

One of the biggest considerations when deciding to buy a car is the cost, and there are a lot of costs to account for. Not only do you need to factor in the cost of buying the car but also the cost of car insurance, maintenance, gas (if applicable), licence and registration fees, and more. Below, we do a deep dive into the cost of car ownership in Canada in order to give you the insider scoop on how much a car costs per month.

Car ownership costs explained

From financing and car ownership to fuel and maintenance, continue reading for a cost breakdown of owning a car in Canada:


Financing is the first cost that you will need to budget for. Please note that financing payments only apply if you do not plan to buy your car outright. If you can buy your car in cash, then the amount you will need to budget for is the full cost of the car, whether you’re buying it from a dealership or an independent seller. However, if you cannot afford to buy your car with cash or you simply don’t want to for various reasons, then you will need to pay financing costs.

Financing costs vary from person to person but they are usually paid monthly. Depending on the terms of the loan you choose, you may be making payments for anywhere from three years to eight years. Longer terms typically come with cheaper monthly payments than shorter terms. However, they end up being more expensive in the long run if there is interest in your financing agreement.. If you are planning on taking out a car loan, consult with a BrokerLink insurance advisor to find out how you can keep rates low.


Gas is another cost that you will need to factor in when estimating how much a car will cost per month. Keep in mind that this will only factor in if you drive a gas-powered or hybrid vehicle. If you drive a gas-powered vehicle, you can bet that a chunk of your monthly budget will be going toward fuelling up. Research gas prices in your region, as well as the fuel economy of the cars that you are interested in. Some cars are more fuel efficient than others.

Alternatively, if you end up buying an electric car, then you won’t have to factor in gas costs. However, you will have to estimate the cost of regularly charging your vehicle (including the installation of a charger at home), whether at home or at a public charging station, and how much this will cost or add to your monthly utility bills.

Vehicle maintenance

Vehicle maintenance is another cost that comes with car ownership. Just as with homes, cars require regular maintenance. Annual checkups are strongly recommended, whether you suspect something is wrong with your car or not.

In addition to annual maintenance appointments, more likely than not, something will go wrong at some point. It might be minor, but odds are, you will need to have your car repaired or serviced several times over the course of its life.

Examples of common types of car services include oil changes, tire alignment and rotations, brake repairs, battery replacements, winter tire installation, and more. Research how much these most common types of services cost in order to estimate how much a car will cost per month. Contact BrokerLink for a list of car maintenance tips for your road trip.

Driver’s licence and registration fees

If you plan to drive the car you buy, then you will also need to account for the cost of obtaining a driver’s licence and registering your vehicle with the transportation authority in your province, both of which cost money.

Licence and registration fees vary between provinces, but you should likely budget one or two hundred dollars a year for this, or even more if you do not have your full licence yet (e.g. a G2 licence in Ontario).

Auto insurance

If you want to legally drive your car anywhere in Canada, then you will need to purchase auto insurance. Thus, car insurance is another cost that you will need to account for when determining your monthly car budget. Many motorists want to know how much car insurance costs per month in Ontario or whatever province they live in.

The best way to find out is by obtaining an insurance quote from a local insurance broker. An insurance broker will ask questions about your lifestyle, driving record, and driving habits to determine what your premium would be. Remember that insurance premiums are extremely personal - they are no one-size-fits-all. They depend on many factors, including:

  • Where you live
  • Age
  • Gender
  • Vehicle type
  • How you use your vehicle
  • Driving record
  • Driving experience
  • Past claims
  • Prior insurance coverage
  • Number of kilometres you drive
  • Type of coverage on your policy
  • Your deductible

In addition, not every insurance company uses the same risk-calculation algorithm when calculating rates. For this reason, it’s even more important that you work with an insurance broker to shop around and compare rates from different insurance companies. This is the only way to know that you are getting the best possible price for your policy.

An insurance broker can also give you tips on ways that you can further reduce your car insurance costs, such as by installing winter tires or an anti-theft device in your vehicle, qualifying for an education or employment-based discount, or being eligible for low mileage car insurance.

Additional car ownership costs to consider

Beyond the main costs listed above, there are a few additional costs that vehicle owners may need to budget for. Although these costs may be lower or aren't guaranteed, it’s a good idea to include them in your estimate in order to make sure that you can afford car ownership:


The cost of parking adds up. If you need to pay to park your car, either at your home or workplace, you must include this in your monthly budget. Parking costs in major cities like Toronto, Vancouver, or Montreal can add a considerable amount to your monthly sum. For example, monthly parking in an underground parking garage in a city like Toronto can cost upwards of $300.

Car accidents

Car accidents happen every day. Even the most common car accidents cost money. Typically, car accidents are more expensive if you are found to be at fault for the accident because at-fault accidents result in insurance premium hikes although you can avoid this reality by adding accident forgiveness coverage to your policy. At the very least, if you get into a car accident and file an insurance claim, you will need to pay your deductible.

However, depending on the type of coverage you have and the circumstances of the accident, you may be on the hook for paying even more money than this. For example, if your car was totalled and needs to be replaced, your insurance payout may not be enough to cover the cost of a new car, leaving you to pay a significant amount of money out of your own pocket.

Please note that in the event that you get into an at-fault car accident, it is liability car insurance that comes into play. Make sure that you purchase enough to cover the cost of both a minor and major accident.

Winter tires

Winter tires are another cost associated with car ownership that you may need to consider. Although winter tires are not mandatory in most Canadian provinces and territories with the exception of Quebec and British Columbia, many drivers choose to purchase them due to the added safety they provide. Winter tires make driving during the winter far less risky, as they have a unique tread that can remain flexible and grip the snow and ice more easily.

This increases your brake time and minimizes the chances of sliding. On the downside, winter tires cost money. You will need to purchase a set of four tires, and you will likely need to pay a professional to have them installed and uninstalled each season.

The good news is that some of these costs may be offset by the fact that your insurance company may offer you a winter tire discount if you can show proof that you installed them on your car.

Calculating the cost of a car in Canada

The best way to calculate the cost of car ownership per month in Canada is to receive estimates of the various costs. Some of these can be obtained online using various types of car loan calculators or car insurance calculators while others may require independent research into the average cost of repairs or licensing fees in your province. Below is a breakdown of how to calculate car costs in Canada:

Research vehicle price

Visit the dealership websites near you or even visit an online marketplace like or Kijiji to get an idea of how much it will cost you to buy the specific car you are interested in. Make sure to research the specific make, model, and year of the vehicle you want.

Get preapproved for a car loan

If you intend to finance or lease your car, then you should get preapproved for a car loan to get a better idea of how much your monthly loan payments will add up to.

Look up gas prices

If you intend to buy a gas-powered vehicle, look up gas prices in your area, as well as how fuel efficient your car of choice is, to calculate how much money you can expect to spend on gas each month please note that this amount will be an estimate as gas prices fluctuate all the time.

Obtain a car insurance quote

Since car insurance is mandatory everywhere in Canada, you must budget for the cost of car insurance. Obtain a car insurance quote from an insurance company or from a broker to get an idea of how much it will cost you to insure the vehicle of your choice.

Remember that car insurance rates are specific to the individual, which is why getting a quote instead of simply researching average auto insurance prices is so important.

Find out average maintenance and repair costs

Do some independent research into how much maintenance and repairs cost for your type of vehicle. If you can’t find this information online, call your local dealership or auto body shop to obtain a quote.

Tips to reduce the cost of car ownership

A few tips that may help you reduce how much you spend on a car each month are as follows:

Buy a used vehicle instead of a new one

Buying a used car is one of the quickest ways of minimizing how much money you spend on car insurance. Used cars, even lightly used cars, are usually far cheaper to buy or finance than new cars.

This is due to the fact that new cars depreciate in value extremely quickly, and they depreciate most in the first year. If you don’t have to buy a new car or can’t afford to, you will likely get a much better deal on it by buying it one or two years later.

When buying a used car, just make sure to do your due diligence, especially when buying it from an independent seller. We strongly recommend hiring a professional mechanic to inspect the car before signing on the dotted line.

Avoid buying the cheapest car on the market

Although this might seem counterintuitive, trying to reduce the costs of car ownership by purchasing the cheapest car on the market may not work out in your favour. This is due to the fact that cheap cars may be more likely to break down or be less fuel efficient. In turn, you could end up paying more money in maintenance, repairs, or fuel than you would have spent had you simply purchased a more expensive car from the get-go.

Refinance your vehicle loan

Another tip to reduce the financial burden of car ownership is to refinance your car loan. Car loan payments add up fast, but if you notice that interest rates have dropped since you initially took out your loan, it might be worth looking into refinancing options. Doing so could result in a significantly lower monthly car insurance payment.

How to save money on car insurance

Another way to reduce the overall cost of car ownership is to keep your car insurance premium as low as possible. As you now know, car insurance is mandatory in Canada, which means that you will need to buy a car insurance plan if you want to legally drive your car anywhere in the country.

That said, auto insurance plans vary in price, and there are several strategies you can employ if you want to lower your premium. Below, the experts at BrokerLink have put together a list of tips to help you reduce your monthly car insurance costs:

Pay for your policy annually

Paying for your car insurance policy annually rather than monthly is one way that you might be able to save on car insurance. Check with your insurance company beforehand, but many companies charge extra for monthly policies because they tack on administrative fees for every payment you make. If this is the case with your insurer, then making one upfront payment will likely be cheaper.

Consider choosing a higher deductible

If you can afford to increase your car insurance deductible, you could save a lot on your monthly premium. The deductible you choose is one of several factors that influences your rates, but it’s one of the most important ones. Raising your deductible by $500 or $1,000 can result in a cheaper policy - just make sure that you can realistically afford to pay this amount if you need to file a claim down the road.

Insure multiple cars together

If your household has more than one car in it - for example, if both you and your partner each have a car or you and your adult son have a car - we recommend insuring them together. Buying multiple car insurance plans from the same provider is not only convenient but can result in a discount.

Bundle home and auto policies

Buying two or more insurance products from the same provider, even if they are different products, can also result in car insurance savings. For instance, if you have a home and you need to buy home insurance or tenant insurance, you could buy this policy at the same time that you buy your car insurance policy and you could qualify for a major discount.

Typically, most insurance companies only offer bundles for home and auto insurance or auto insurance and recreational vehicle insurance. Contact BrokerLink to learn more about how insurance bundles work and how you can qualify for one.

Install snow tires on your car

Insurance companies across Canada, especially in Ontario, offer discounts to policyholders who choose to outfit their cars with snow tires during the cold months. So long as you meet the insurance company’s conditions, you can receive a discount on your premium. Conditions vary but usually include having your tires installed by a certain date each year and installing four winter tires of the same model on your car.

Don’t pay for coverage you don’t need

Many people purchase a car insurance plan once and then continue renewing it year after year without ever looking at it again. However, the reality is that sometimes car insurance needs to change. For instance, when you first bought a policy, your car may have been brand new, thus making comprehensive car coverage or collision car insurance well worth the price.

Now, years later, your car is likely far less in value, which means that these extra coverages may not be necessary. For this reason, it’s important to review your policy every year to determine if the coverage you have still makes sense for your needs. A BrokerLink insurance advisor can also help you do this.

Graduate from driving school

One last tip to help drivers of all ages but especially young drivers save money on car insurance is to graduate from an approved driving school in your province. If you can show proof that you completed a driver’s education program in your province, you may qualify for a discount on your premium.

Get in touch with BrokerLink to learn more about car insurance costs in Canada

For more information on car costs in Canada, get in touch with BrokerLink today. We can outline the various costs that should be budgeted for, as well as the different types of auto insurance that are important to add to your policy, e.g. third party liability car insurance. Get started today by contacting BrokerLink and requesting a free car insurance quote. Auto insurance quotes can be obtained over the phone, in person, or on our website using the online quote tool.

Get an auto insurance quote [phone]