Do You Know How Much Owning a Car Really Costs?
Do you know exactly how much it costs to own a car? If your answer was no, you are not alone.
According to a recent poll conducted by the Canadian Automobile Association (CAA), 67 per cent of Canadians don’t know the average cost of owning and using a vehicle for a year.
The average cost of owning a regular gas engine car is $3,300.
When CAA asked Canadians to give an estimate of the cost of operating a compact car for a year, 26 per cent couldn’t even offer an estimate. Another 20 per cent underestimated the annual cost by nearly $1,000 or more, while 21 per cent overestimated the cost by at least $1,700.
“In most households, transportation costs are the second-biggest monthly expense,” says Jeff Walker the Chief Strategy Officer of CAA National.
“There are several expenses often overlooked when considering purchasing a new vehicle, such as fuel, insurance, maintenance, and licence and registration, which all can add up quickly.”
There are many factors that go into the annual cost of owning a vehicle.
Fuel seems to be the biggest annual expense for drivers, costing them on average about $1,500 for a compact vehicle.
Routine scheduled maintenance, which include oil changes, replacing air filters, and changing seasonal tires, add another $500 to $700 a year for drivers. That price doesn’t include replacing old tires or purchasing winter tires.
Finally there’s depreciation. This cost is forgotten by most drivers, but it can almost double the cost of ownership.
“Depreciation is the loss in value your car incurs over time,” says David Wurster the President of Vincentric, a transportation data company that provides the data that powers the CAA Driving Costs Calculator.
“In the first year of ownership your vehicle’s value drops on average 30%; and between 60 to 70% in the first five years. That is important if you are thinking of re-selling your vehicle in the first five years.”
Nearly 25 per cent of Canadians ranked depreciation as the least expensive part of owning a vehicle. In reality, it is actually the most expensive cost when it comes owning a vehicle, accounting for about half the ownership cost.
To help Canadians find and understand the real cost of a vehicle, CAA created a driving costs calculator that displays annual operating and ownership costs of tens of thousands of vehicles available on Canadian roads.
The tool now also includes electric vehicles in addition to internal combustion engine and hybrid cars.