How much is that new car really going to cost you?

So you want to buy a new car. 

Well, knowing how much it costs to purchase that car is really only half the battle. You also need to figure out how much cash it will take to actually own it. The basic idea behind calculating something like that is simple: add up essential costs like fuel and maintenance, factor in the size and category of your vehicle, and voila. 

The trick is figuring out exactly what expenses you need to account for and the actual numbers behind them. 

Let’s get right to it… 

What you need to pay for 

The first thing any prospective car owner needs to know is what they need to pay for. Here are the costs that you will need to take into account when calculating the total price of ownership: 


The biggest expense when it comes to car ownership is depreciation. While its not something you actually pay extra for, it does have a big impact on your total cost of ownership. A simple way to think of depreciation is as the value your vehicle loses off the price you paid as it gets older or the difference between what you paid and what you could get if you decided to sell. On average, a vehicle loses about 65 per cent of its value over five years, while amounting to 48 per cent of overall ownership expenses – according to Consumer Reports. 

Different vehicles depreciate faster than others for a variety of reasons, so these numbers are not the same for everyone. One of the best tools for calculating depreciation is Canadian Black Book, which shows how fast the car will lose its value and the resulting price after a specified amount of years. 


Fuel is one of the biggest expenditures when it comes to owning a vehicle, especially if it’s a bigger vehicle like an SUV, minivan or truck. According to Consumer Reports, it might cost as much as $15,000 to fill up a Jeep Liberty over five years. However, if you choose to get a more fuel-efficient vehicle your savings can be in the thousands. Consumer Reports also points out that, on average, fuel is the second-biggest expense when it comes to car ownership, amounting to 24 per cent over five years. 

To calculate the fuel cost for your vehicle do not simply trust the posted manufacturer fuel economy ratings as they will generally be better than what you can expect in real life. 

To figure out your true fuel costs, start with a full tank of fuel and write down the odometer reading. Once you begin driving, keep track of the number of litres, how much you are spending and the odometer reading. You can then use the numbers to calculate the average kilometres per litre as well as the cost of fuel per kilometre. Alternatively, the data provided on CAA’s website is generally a pretty good approximation. 


Maintenance is just as important as refueling, but not nearly as expensive in the long-term. The costs include regular maintenance and retail parts, such as brake pads, oil filters and so on. The price of an extended warranty and more tangible repair items, like piston rings, transmission and others, should also be factored in. 


If you prefer, you can lump the cost of tires in with your maintenance bill, but since changing them is often a separate affair, we have listed them as such. The cost of changing a single tire usually ranges from $60 to $125, which also includes installation and balancing. It’s recommended to change tires every three to six years (or sooner if the tread has worn down quickly). 


Insurance is another important yet taxing vehicle expense. Ontario has the highest insurance rates in the country, with the average annual rate being $1,544.86, that’s some 45 per cent higher than in Alberta – the second costliest province. Insurance rates vary depending on factors such as gender, age, driving record, vehicle type and so on. 

License and registration fees 

Car owners are required to annually renew their license, which can cost over $100 in Canada. Registration renewal is roughly in the same ballpark in terms of pricing, but you need to pay for it bi-annually. 


If you are financing a vehicle, then your monthly payment should figure into the cost of ownership as well. The longer your term is, the lower the monthly fees – but they do come at a price. Longer financing terms tend to drive interest rates up, which amounts to a higher price for the vehicle. According to Consumer Reports, interest accounts for about 11 per cent of ownership expenses over five years. You can find out the finance rates for your vehicle by checking out the Unhaggle dealer cost report. 

Costs by vehicle category 

Ownership costs vary by the size, fuel consumption and category of the vehicle. The location also plays into it since each province has its own corresponding fees. If you are interested in knowing what the ownership fees for each category are by province, you can check them on, but keep in mind that they may vary even among similar vehicles. 

Here are CAA estimates for Ontario: 

Example: Honda Civic
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $8535

Example: Toyota Venza
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $11,020

Example: Chrysler 300 S V8
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $15,673

Example: Nissan Altima
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $11,084

Example: Mini Cooper
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $9,037

Pickup Truck
Example: Ford F-150 3.5L ecoboost
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $14,388

Mid-sized SUV
Example: Toyota RAV4
Cost per litre of fuel: $2.00
Total driving costs per year (based on 20,000 km driven annually): $11,104

If you don’t want your car to surprise you with any unexpected costs, your best bet is to use the recommended resources and assign real numbers to any potential expenses you may have. We have named most of them, but if you foresee other expenditures, then be sure to include them on your list. That way, you will know exactly where you stand financially and hopefully make better use of your car as a result.