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February 28, 2022

How much does having a car really cost?

It's hard to believe that your driving costs outweight your annual grocery bill.

But according to a new report by the Canadian Automobile Association (CAA) -- it's true.

In fact, the study found that the annual ownership costs for a compact vehicle are about $9.500 while the average Canadian spends about $5,400 on their yearly grocery bill. Now that's food for thought.

The study also discovered that four in five Canadians polled underestimate the cost of owning and operating a motor vehicle. And six in 10 underestimated that cost by $4,000 or more.

One of the things that people neglect to take into consideration about the cost of vehicle ownership is the depreciation. In fact, those polled ranked depreciation -- which is actually one of the largest costs of ownership -- in the bottom three when asked to list vehicle expenses in order of costs.

The CAA offers a free online calculator, called Driving Costs, that helps you understand the ongoing costs of owning and operating a vehicle.

Jeff Walker, CAA vice president, public affairs, explains, "A vehicle is the second largest expense most people have, but a lot of us are not taking into account all the expenses associated with car ownership."

He adds, "Driving Costs makes it possible for everyone to figure out the true costs of driving in as little as one minute, so they can keep them in mind when planing their household budget."

Now let's talk about roadside assistance. 

The calculator tallies in the yearly costs by vehicle make, class and province for everything you spend on your vehicle including gas and licence fees, and even takes into consideration depreciation. You can input your own information if you have it but if you don't, it also provides estimates as well.

Now this will really get you on the road to knowledge.

By Donna Donaldson, MSN Money

Do you keep track of your vehicle expenses?






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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...