Smart money says to buy a car and keep it, maintain it, and stay in love with it
Car insurance rates are up across Canada
“Insurance is up 11 per cent across Canada,” he reports. “Alberta is replacing their previous 3.2 per cent cap on rates with 7 per cent, which will make that province very expensive for insurance. They’re looking at no-fault for 2027 to try to tackle some of the legal costs.” No fault saves money by reducing court challenges, but insurance companies still spend a lot on fraud and theft. Ontario is up 11.1 per cent, Quebec is up 9.3 per cent and the Maritimes is up 9 percent. There is no good news for Canadian car owners when it comes to insurance. “2024 was a terrible year insurance-wise,” says Hands, citing more expensive parts and repair bills, ongoing high theft rates and everything that nature hurls at us across the country, from floods to fires.
What’s included in the average monthly car cost?
Ratehub factors in average fuel costs (about $200 a month), a figure that EV and hybrid owners will be able to significantly reduce. It also accounts for parking and maintenance, which again, may not reflect your real-world experience. High milers require more maintenance and more tires; you’re also probably not taking your BMW through a Jiffy Lube.
Read that again: that SUV you see advertised for $66K could cost you nearly $100K.
Matt Hands wants you to understand depreciation costs, a bugaboo that a lot of people would rather not think about. But a car is a depreciating asset, and an aging car is eating away at its value even as you pay down the loan. Smart money says to buy a car and keep it, maintain it, and stay in love with it. Kind of like marriage, it’s usually cheaper to stay with the one you’re with. Also like marriage, sometimes a parting of the ways is inevitable, so you try to minimize the hit.
There is a better side to some of these numbers.
Keep an eye out for low interest rate incentives; yes, manufacturers get it back in somewhere, but if this is the vehicle you want, zero or low interest rates are worth considering.
Know the value of your trade-in. Retail is if you sell it yourself, wholesale is what a dealer should be offering you.
Make a down payment. As Hands suggests, even paying the amount of the tax will help.
Resist rolling old car debt into new. Being upside down on a car loan is brutal for your financial health.
Ride out the depreciation. Once your car is paid off, your finances should have some breathing room.
Use Ratehub’s ratios as a guide for what to expect in general, then drill down on what applies to you specifically. If you’re spending a thousand bucks a month on a car you rarely use, you could probably rent or Uber and spend far less. People often buy a vehicle picturing that one road trip in the summer, but realistically, it’s too much for every day. A lot of rentals have unlimited mileage now — you can put the wear and tear on someone else’s car.
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