The monthly loan payment is only part of what a car costs. Depreciation, insurance, fuel, maintenance, licensing and parking add up to the true cost of ownership, and together they often come to far more than the payment alone. This page breaks those costs down per year and per month for a new and a used car; it is part of our guide to buying a car in Canada.
How much does a car cost per month in Canada?
There’s no single average, because the total depends on the car’s price and age, how far you drive, where you live and how you pay for it. The two examples below add up every cost for a typical new sedan and a 4-year-old used one, so you can swap in your own figures.
Mid-size sedan (new, $40,000 purchase price), first year
| Cost category | Annual cost | Monthly |
|---|---|---|
| Depreciation (year 1: ~20%) | $8,000 | $667 |
| Financing interest (5% on $32,000 borrowed over 60 months, first year) | $1,470 | $123 |
| Insurance (example) | $2,100 | $175 |
| Fuel (15,000 km/yr, 10 L/100 km, $1.65/L) | $2,475 | $206 |
| Maintenance (oil, tires, brakes) | $1,200 | $100 |
| Licensing and registration | $200 | $17 |
| Parking (suburban, at home) | $0-$2,400 | $0-$200 |
| Total (no parking) | ~$15,445 | ~$1,288 |
4-year-old used sedan ($20,000 purchase price), first year
| Cost category | Annual cost | Monthly |
|---|---|---|
| Depreciation (~10%) | $2,000 | $167 |
| Financing interest (6% on $16,000 borrowed over 60 months, first year) | $880 | $73 |
| Insurance (example) | $1,800 | $150 |
| Fuel (same usage) | $2,475 | $206 |
| Maintenance (older car) | $1,800 | $150 |
| Licensing and registration | $200 | $17 |
| Total | ~$9,155 | ~$763 |
Only the interest counts as a cost of financing: the principal you repay buys the car, and the part of its value you lose shows up as depreciation. City parking can add a large amount on top, and a second car, a long commute or a young driver on the policy changes the insurance line most.
Depreciation
Depreciation is usually the largest single cost of owning a newer car, and it hits hardest in the first few years, whether you paid cash or financed. How fast cars lose value by age and model, and how that shapes the choice between a new and a used car, is covered in our new vs used car guide.
Insurance
Insurance is mandatory in every province, and what you pay depends heavily on where you live, your age and driving record, the vehicle and how much you drive. Each province publishes its averages differently (private insurers’ industry averages in some, the public insurer’s own figures in British Columbia, Manitoba, Quebec and Saskatchewan), so see car insurance costs by province for each province’s figure and what it measures.
Fuel costs
Annual fuel cost by vehicle type
| Vehicle type | Fuel consumption | 15,000 km/yr @ $1.65/L | 20,000 km/yr @ $1.65/L |
|---|---|---|---|
| Compact sedan | 8 L/100 km | $1,980 | $2,640 |
| Mid-size sedan | 10 L/100 km | $2,475 | $3,300 |
| Crossover/SUV | 11 L/100 km | $2,723 | $3,630 |
| Full-size truck | 14-16 L/100 km | $3,465-$3,960 | $4,620-$5,280 |
| Hybrid | 5-6 L/100 km | $1,238-$1,485 | $1,650-$1,980 |
| Electric vehicle | ~20 kWh/100 km | ~$450-$540* | ~$600-$720* |
*EV electricity at $0.15-$0.18/kWh (home charging); public DC fast charging costs considerably more per kWh. Our comparison of EV vs gas car costs adds up the full difference, including purchase price and maintenance.
The federal carbon price on gasoline
The federal fuel charge was set to zero from April 1, 2025, so it no longer adds to the price of gasoline, and the Canada Carbon Rebate that used to offset it has ended. The carbon tax rebate guide covers the final payments.
Maintenance and repairs
Annual maintenance budget by vehicle age
| Vehicle age | Expected annual maintenance |
|---|---|
| 0-3 years (under warranty) | $400-$800 |
| 4-6 years | $800-$1,500 |
| 7-10 years | $1,500-$2,500 |
| 10+ years | $2,000-$4,000+ |
Major maintenance items and costs
| Service | Frequency | Cost |
|---|---|---|
| Oil change (synthetic) | Every 8,000-12,000 km | $80-$150 |
| Tire rotation | Every 8,000-10,000 km | $30-$60 |
| All-season to winter tire swap | Every fall/spring | $80-$150 (if stored) |
| Winter tires (set of 4) | Every 4-6 years | $600-$1,200 |
| Brake pads (front) | Every 40,000-70,000 km | $250-$500 |
| Battery replacement | Every 5-7 years | $200-$400 |
| Timing belt/chain | Every 100,000-150,000 km | $800-$1,500 |
Winter tires are mandatory in Quebec (December 1 to March 15) and widely used everywhere in Canada. A second set of rims makes the seasonal swaps quicker and cheaper.
Licensing, registration and other fees
| Fee | Approximate annual cost |
|---|---|
| Provincial registration renewal | $60-$120 |
| Licence plate sticker (Ontario) | $0 (renewal fee and sticker eliminated for passenger vehicles since March 2022; renewal is now free and automatic) |
| Safety inspection (some provinces require one annually) | $50-$100 |
| Emissions test | $30-$40 (where applicable) |
| Subtotal | $140-$260 |
Sales tax is a one-time cost at purchase rather than a yearly one; our guide to car sales tax in Canada covers each province’s rate on new and used vehicles.
Paying for the car: loan, lease or cash
How you pay changes the financing line above. A loan adds interest on top of the price, a lease charges for the depreciation over the lease term plus a finance charge, and paying cash avoids interest but uses savings that could earn a return elsewhere. Our guide to leasing vs buying a car compares the three on the same car, how to finance a car walks through getting a loan, and the best car loans in Canada page compares current car loan rates and lenders.
Is owning a car worth it where you live?
In cities with good transit, some households replace a car with a mix of transit, car sharing, rentals and the occasional ride-hail trip, while in suburbs and smaller towns a car is usually necessary. Our guide to renting, car sharing and owning a car compares those options by how much you drive.
New, used or electric
The car you choose changes most of these costs at once: a new car carries the steepest depreciation, an older used car the higher maintenance, and an EV a higher price with lower fuel and maintenance costs. See new vs used car in Canada and EV vs gas car costs for those comparisons, and how much to spend on a car for setting a budget.
Key takeaways
- The monthly payment understates the cost: in the worked examples on this page, a new $40,000 sedan costs about $1,288 a month in its first year once depreciation, interest, insurance, fuel, maintenance and licensing are counted, and a $20,000 used one about $763.
- Depreciation is usually the largest single cost of a newer car; the new vs used guide shows how it changes with age.
- Insurance depends heavily on the province, your driving record and the vehicle; see car insurance costs by province.
- Fuel scales with distance and the vehicle’s consumption; an EV’s energy cost is a fraction of a gas car’s when charged at home.
- Maintenance rises with a car’s age, which offsets part of a used car’s lower depreciation.
Back to: Car buying guide
Sources
The figures and rules on this page come from these sources, last checked against them on September 24, 2026. How we check facts.
- Department of Finance Canada: Removing the consumer carbon price, effective April 1, 2025