Living in Toronto can be expensive. The city has among the highest rents in Canada. Transit is not cheap either, making car ownership such a lifesaver. Think of the last time you carried groceries home. Or that time when your car-sharing ride was delayed. The convenience of owning a car is unmatched. And once you buy your first car, you will never think of letting it go, unless you are upgrading to a newer model.
Not everyone can afford a car. And they come with countless responsibilities, all of which translates to money. The cost of owning a car depends on different factors such as the model, make, and whether it’s a new or used car. Even with the convenience that comes with it, the cost of owning a car in Toronto can be expensive. In this article, we will explore the average cost of owning a car in Toronto and help you make better car-ownership decisions.
Factors that affect the cost of owning a car in Toronto
1. Financing
You may have saved lump sum amounts to purchase your car. However, most car owners prefer a financing plan. This means that you will be required to remit monthly car loan payments depending on the financing terms that you choose. If you are lucky to get a longer-term plan, you will make lower monthly payments. However, you will pay more interest in the long run.
2. Maintenance
Just like any other asset, cars need regular maintenance. To prevent expensive repairs, ensure you visit your mechanic regularly. Spotting problems early on can prevent expensive repairs or even accidents. Once you determine the average cost of maintaining your car, you can then budget for the maintenance costs. If you just got the car, check online guides for vehicle maintenance costs based on the make and model. For instance, you will need to budget for tire rotations (approximately $20 per tire), oil changes ($50- $100), and brake jobs ($600- $1,500).
3. Insurance
Insurance is one of the most important things that you need to factor in even before you purchase a car. Basic auto insurance is mandatory in Toronto. Luckily, insurers offer varying coverages depending on your risk level and needs. For instance, your insurer will consider your driving record, the car model, where you live and your age among other factors before giving you an insurance quote. The average car insurance for a person living in Toronto ranges between $1,000 and $2,000.
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4. License and registration fees
Registration expenses, taxes, and other fees add up when it comes to the cost of maintaining a car. For instance, all vehicle owners must remit motor vehicle registration fees. Other costs that you may incur include emissions testing, parking fees, and tolls.
5. Fuel
Before you buy a car, it is vital to have an estimate of the model’s fuel consumption. This is important for people who have long commutes. While the price of fuel in the market can fluctuate, the average cost of fuel will be more expensive depending on the mileage travelled and a vehicle’s consumption rate.
Can you lower the cost of owning a car in Toronto?
A car is a great investment. But what if it incurs too many costs? It would be sad if you bought a vehicle but are unable to maintain it due to recurring costs. So, what measures can a car owner undertake to lower the ownership cost?
- Buy a used car- If you are on a strict budget, buying a used car is recommended as opposed to a new car. Not only do used cars lead to lower insurance rates, they are cheaper to maintain and are also quite affordable.
- Choose the car size wisely- If you are shopping for a regular family car, a small car will serve you better than a large car. The maintenance costs of a small car are also less than that of a bigger car. However, be sure to get one that suits your needs.
- Refinance your car loan- One of the best ways to get lower monthly vehicle repayments is by car loan refinancing.
- Maintain your car regularly- As we mentioned, well-maintained cars result in better insurance rates given the lower risk of being involved in accidents. You also avoid the inconveniences of regular breakdowns and keep your warranty in effect.
- Only opt for a car with features and technology that you will use- Buying a new car is exciting. And if you are a car enthusiast, you probably want a car with advanced technology and unique features. While you should not ignore safety devices, sophisticated features and technology will only raise the cost of owning the car. If you are looking to reduce the ownership cost, do not pay for technology that you will not use.
- Shop around for better insurance rates- High insurance premiums can significantly add to the cost of car ownership. Shop around for better insurance rates, noting the coverage provided. You will get even better rates if you have a clean driving record.
So, what is the average cost of owning a car in Toronto?
Car ownership costs are calculated as an average of the total expenses incurred to drive a car for 5 years. Once these costs are added up, they are averaged out to give an annual or monthly average. Most car owners pay an average of $1,000 per month when all payments are factored in. This can significantly rise if you buy an expensive or large vehicle.
Please note that the average cost of owning a car differs based on the car model, the age of the automobile, the location, mileage, parking facilities, insurance premiums, and even fuel consumption.
