The true cost of owning a car is higher than ever. Here's how to get it under control.

Should you buy new?

When considering a new car, some Canadians might think that buying new will keep maintenance costs down, and they could be right. However, people still have a tendency not to put an appropriate level of savings away for maintenance, says D'Arbelles.

A 2018 study by the CAA suggested that 67% of Canadians don’t understand the full cost of a car. When surveyed, 20% underestimated the annual cost of a vehicle by $1,000 or more.

"An average compact car like a Honda Civic, if you drive about 20,000 kilometres per year, you're wanting to put aside about $1,200 per year in maintenance costs," she says. "That's the manufacturer’s recommended maintenance, which is a good thing to keep in mind."

But of course, right now new cars are incredibly hard to come by, with supply-chain demands leading to enormous wait times for Canadians seeking a new car.

That includes electric vehicles (EVs), which D'Arbelles says could indeed bring down maintenance costs. While you still have to look after the car, you avoid the cost of replacing things like hoses and belts. And although the upfront costs can be higher, it may be worth it in the long run.

"If you're going from $2,000 to $300 in the amount of dollars you're using to power your vehicle...you're usually breaking even within five years," D'Arbelles says.

D'Arbelles says that as EVs become more popular, the maintenance costs are also dropping. While you're not going down to zero, it could be a difference of over $2,000 per year.

"In general, to be honest with you, the ownership and operating costs with an electric vehicle is significantly cheaper than a gas vehicle," she says.

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What about a beater?

Another option is to buy a used car, and you could potentially save tons of cash by buying a used car with some wear on it. That's something Canadians may be considering since used cars are also increasing in price.

At the beginning of the pandemic in 2020, it cost an average of $27,029 to buy a used vehicle, an Autotrader spokesperson told CTV News. However, by June 2022, that average cost rose to $38,097; a 41% increase.

"Some people don't have the credit or availability to purchase a more expensive vehicle," says D'Arbelles," and that may be the only option that they have. Maintenance is huge in this case."

Beyond the basic recommended maintenance, D'Arbelles recommends putting aside $25 to $50 from each paycheque to account for not just maintenance, but repairs.

"That's different from maintenance," she says. "If you're buying an older vehicle, you're going to need money for repairs."

Keeping costs down

No matter which route you choose, there are ways to keep both maintenance and costs down, D'Arbelles says. The CAA has fuel efficiency tips that can bring down gas prices, and also help with maintenance.

Some of these tips include keeping your tires inflated, which allows for peak performance and keeps your car more fuel efficient. You could also refrain from doing "jack rabbit starts" (where the driver slams on the gas hard), says D'Arbelles and coast to decelerate.

"All this saves money on gas, but does wonders on maintenance schedules as well," she says. "You’re extending the life of your brakes, and extending the times in between when you have to do your brakes."

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"It's not fun"

Buying a car should be fun, but that's simply not the case these days, D'Arbelles says. As gas prices and car prices both soar higher, even used vehicles can be quite costly. And D'Arbelles says Canadians should continue to be prepared for some sticker shock, even in the used car market.

"Five thousand dollars isn't going to get you as far as it did a few years ago," she says. "It's not fun getting used vehicles these days."

But don't let that get in the way of keeping up with maintenance costs, D'Arbelles says.

"If you stick to the recommended maintenance schedule, your car is going to last a lot longer," she says.