*Assumes 8.4 L/100 km and $116.6 CDN per litre
Average annual costs over 3 years of ownership
As you make your own decision, consider here are some of the most significant expenses of car ownership to consider:
“What goes down, will eventually come up,” says D’Arbelles, referring to Canada’s gas prices during the COVID-19 pandemic. Even though fuel may seem cheap now, gas is likely to be one of the biggest expenses when it comes to owning a vehicle, according to D’Arbelles, although it is highly variable. Understanding the average cost of gas in your area or where you’ll be driving is an important factor to consider when thinking about buying a vehicle. To get a general sense of how much you might spend on gas, take the number of kilometres you expect to drive each year, divide it by your expected fuel economy, then multiply that number by the average price of gas in your area.
With an old midsize family sedan such as mine, fuel expenses will take a significant chunk out of your budget—but it won’t be nearly as bad as what you would have to pay for most trucks, SUVs or high-performance vehicles. Despite being a car enthusiast and president of the Vintage Automobile Racing Association of Canada (VARAC), Michalos advises students to choose a vehicle that is best suited for their financial situation and needs at school, rather than their wants or aesthetic preferences.
Maintenance costs will vary greatly, depending on if you’re buying a new or used car. Routine and general maintenance costs can easily be forgotten about and overlooked at times, but they should absolutely be accounted for in your budget, D’Arbelles advises. The older the vehicle is, the more likely the costs to maintain it will be higher. The newer the vehicle is, the less expensive its upkeep will be initially, but keep in mind you’ll also pay more to acquire a new vehicle.
I’ve been working at a car dealership for the last three years, which explains how I manage to keep my maintenance costs relatively low on such an old vehicle—I get a discount on service. Look around and find a mechanic you trust, who also offers fair prices. Getting some of the major work done at a dealership would have cost me more than double what I ended up paying at independent shops. Having a better-than-average understanding of maintaining a car will also give you a significant advantage in the long run—if you aren’t afraid to get your hands dirty, there are thousands of resources online which can teach you to work on your own car and help you identify issues that need attention, potentially saving you hundreds or thousands of dollars, on top of the satisfaction of fixing or maintaining something yourself. (For example, many people handle their own seasonal tire changes.)
Insurance and registration fees
There are numerous ways to save money on insurance if you take the time to consider the dozens of discounts you might qualify for. Factors such as what kind of car you drive, how old it is, your age, sex, where you live, your driving record, and even your grades are just some of the things to consider when shopping for the best premium. Insurance will vary significantly based on your lifestyle—but as a student and young driver, you can expect your rate to account for one of the pricier areas of your budget, if not the most expensive.