Owning a Car in Toronto Now Costs 52% More Than in 2019

A car with a Toronto landmark in the background, with a price tag indicating "$$$$"
Share with FacebookShare with FacebookShare with TwitterShare with TwitterShare with Twitter
Table of Contents

    In some Canadian cities, the costs of car ownership are very high. In 2024, the cost of owning a vehicle in Toronto is $1,623 per month, compared to $1,068 per month in 2019. If you buy your car this year and keep it for 7 years, you will spend a total of $140,408, taking into account an annual target inflation rate of 2%. Our analysis ranges from 2019 to 2024 and is based on gas-powered cars, which still far outstrip electric cars in terms of sales in Canada. Keep reading to find out about the inflation of interest, insurance, gas, and more.

    Depreciation: How much do you really pay to acquire a car?

    According to AutoTrader data, the average price of a new vehicle in Ontario increased from $38,690 in 2019 to $66,577 in 2023. What is behind this surge? Alongside supply challenges and a shortage of labor, there are fewer entry-level cars such as the Kia Rio (discontinued in 2023), the Ford Fiesta (discontinued in 2023) and the Chevrolet Spark (discontinued in 2022) on the market.

    To estimate the average purchase price in 2024, we took into account inflation forecasts of 3% and a general stabilization of automobile prices. The calculation brings the total to $68,574 in 2024.

    In addition to being very expensive, new cars always suffer a certain amount of depreciation, meaning they lose value as soon as they leave the dealership. We took into account a depreciation of 25% the first year, and 15% thereafter. Out of a total monthly cost of $1,623, there is $585 (36%) which is attributable to the cost of acquiring the vehicle and its depreciation.

    However, what will be the actual expenses for a Jeep Wrangler, Ford F-150, or Audi Q5 in 2024? It’s essential to consider various factors, including financing (car loan), fuel, maintenance, insurance, registration, and parking.

    Registration and licensing

    Did you know that Ontario is quite generous when it comes to vehicle registration? In fact, license plate renewal fees went from $120 to $0 during the pandemic. Ontarians still have to pay to renew their driver’s licenses from time to time, but in comparison, their fees are much lower than elsewhere. The opposite is true for some other expenses, such as gas and interest, which have risen sharply in recent years, while others have seen relatively smaller increases.

    Financing: Hello, high rates

    Interest rates on financed vehicles have increased in recent years. In 2024, 16% of the costs of owning a vehicle (or $261 per month) go towards paying interest on loans, whereas in 2019, we were talking about roughly 8%.

    Most consumers choose a loan of 7 years or more. We calculated the interest on the loan using our car loan calculator (over 7 years). In fact, you pay a lot more interest at the beginning and less, if any, towards the end.

    According to Statistics Canada’s average rate, interest rates on new auto loans were just over 5% in 2019 and rose to 7.93% in 2023 and 8.24% for January 2024. 

    Gas is still expensive

    Despite a tax cut since 2022, which reduces prices at the pump by about 5.7 cents per liter, gas prices are still high. The cost of gasoline was calculated based on the average annual price (in cents per liter) for a vehicle consuming 8.8 L per 100 km and traveling 20,000 km per year. A consumption of 8.8 L is fairly standard, but you can find cars consuming less than 6 L per 100 km or more than 12 L on the market. Statistics Canada registers gas prices for main cities, including Toronto; we used them to make our calculations.

    While the average vehicle cost you barely $172 per month in gas to travel 20,000 kilometers per year in 2019 (at 116,95 cents per liter), you would have had to pay $227 per month in 2023 (at 154,48 cents per liter). For 2024, this cost could drop to $215 (or 146,35 cents per liter). Because Canadian and U.S. gas prices are similar (excluding taxes), we took into account the slight drop forecasted by the U.S. Energy Information Administration.

    What’s going on with insurance premiums?

    In Toronto, the average cost of average car insurance was $2,357 per year in 2023, and taking into account general inflation, it will reach $2,428 per year in 2024. This average encompasses both new, pricier vehicles and older ones with lower values that demand fewer protections. The insurance cost for your new car is likely to exceed the average! As your vehicle ages, your premium is expected to decrease.

    However, things could get worse in 2024, as car insurance premiums might rise higher due to car theft, for instance. To save money, use a car insurance comparison tool. Conduct multiple simulations to assist in the decision-making process between two car models you’re interested in; one of them might incur significantly lower insurance costs.

    Maintenance and repairs

    The maintenance and repairs of a vehicle vary over its life. We spread the cost of new tires (every three years), two tire rotations per year, three oil changes per year, new brakes (once every four years), battery replacement (once every four years), minor breaks like spark plugs, air filter replacement, and windshield wipers (once a year), and one major repair over 7 years (the total ownership period used for our calculations). Four tires can cost between $400 and $1,000, so there is some variation to expect depending on your car, wheel size, and quality preferences. The same goes for parts like brakes. Changing four brakes every four years easily costs more than $1,000

    In reality, the cost is much lower the first years and it increases depending on the age of the vehicle. To estimate maintenance costs in 2024, we simply used the expected general inflation rate. 

    Parking (and fines!)

    Parking costs in major cities have risen over time, mostly due to scarcity. To estimate parking costs, we used WhereIPark and Realtor. On February 29, we calculated the average price for indoor and outdoor parking spaces to rent in Toronto. The average is $222 per month.

    Map showing the monthly rent asked for parking spaces in Toronto

    But the biggest surprise comes from parking tickets. A basic no parking violation now costs $75 (since late 2023), a 150% hike from the $30 fine it was before, and more increases might be on the way. To calculate the average cost of fines, we divided the operating revenues of the City’s Parking Authority by the number of cars in circulation. It is possible that parking and operating revenues include revenues other than parking tickets, but we’ve gone to the most accurate figures we could find. Rest assured, this expense takes less than 1% of the annual cost of owning a car.

    Alternatives to driving in Toronto

    According to the Toronto Transit Commission (TTC) fare schedule, an adult pays $143 for a monthly pass. So, someone who wants to save as much as possible on transportation can settle for it. The average commute is around 47 minutes, which would take you from Parkdale to City Hall (a distance of 6 km), for example. If you make a round-trip every day to go to work or for personal reasons, you would reach 360 km per month for a cost of $0.40 per km. But public transportation is limited: the wait can be long, you cannot transport large or heavy objects easily and it’s generally less convenient than a car.

    We took the example of someone who does not need to travel 20,000 km per year, but who would like to use a car on a regular basis. They subscribe to Communauto for $5 per month (Value plan). They use it three times a week, for 2 hours for shopping about 6.5 km from home (13 km round-trip). The costs are 44¢/km and $3.95 per hour. They also go on a 2-day trip once a month, to a place that is located 100 km out of town. The costs are 44¢/km for the first 50 km, then 26¢/km, and $28.65 per day. Using Communauto costs them $295 per month. They also have a monthly TTC pass to pay separately ($143). Since they travel a total of 616 km per month (including 252 km to commute with TTC), the cost is $0.71 per kilometer.

    Now, what if you prefer Uber or Lyft? Let’s say you make two round trips per week with Uber for an average of 16 km per round-trip. On February 29, we simulated trips from Eglinton Park to the CN Tower, from the Toronto Public Library to Michael Garon Hospital, and from Woodbine beach to Home Depot to compare Lyft and Uber. Please note that prices can vary depending on the time and day, so you will probably get slightly different prices. You would travel 134 km per month for $2.46 per kilometer with Uber and $2.19 with Lyft. Including a monthly TTC pass, total trips of 386 km would add up to a cost of $474 per month ($1.23 per km) using Uber and $437 (or $1.13 per km) using Lyft.

    Infographic: The cost of car ownership in Toronto in 2024

    Share with FacebookShare with FacebookShare with TwitterShare with TwitterShare with Twitter
    Maude Gauthier is a journalist for Hardbacon. Since completing her Ph.D. in communications at University of Montreal, she has been writing about finance, insurance and credit cards for companies like Fonds FMOQ and Code F. As a responsible user of credit cards, she can spend hours reading the fine print to fully understand their benefits. Because of their simplicity, she developed a preference for cash back cards. After suffering steep increases with her former insurer, she can now proudly say that she saved hundreds of dollars by shopping around for her auto and home insurance. In her free time, she reads novels and enjoys streaming popular shows (and possibly less popular shows, like animal documentaries).