Within the last few years, owning a car in Toronto has become a lot more expensive. The price tag has increased but in 2024, the cost connected with car ownership is reaching sky-high levels. A new study from the personal finance app Hardbacon found that in the city the average price of owning a gas-powered vehicle has risen by 52% to $1,623 per month,a significant increase from 2019 when the monthly cost was $1,068.
The main reason for the hike is due to the high prices of new vehicles, even though the cumulative rise in related costs such as licensing, parking, registration, insurance, maintenance, and gas also plays a main factor. In 2019, the average cost of new vehicles jumped in price to $68,574, from $38,690. The surge is mostly because of the supply challenges and a shortage of labor, but there are also fewer entry-level cars on the market.
According to Statistics Canada, interest rates on new vehicle loans were just over 5% in 2019 and increased to 7.93% in 2023 and 8.24% in January 2024. The yearly average for auto insurance in Ontario is projected at $2,428 in 2024, with experts saying the total expense for a car bought in 2024 and kept for seven years, taking into account an annual target inflation rate of 2% is predicted to reach $140,408.
In Toronto, parking fines have also gone up significantly, with no-parking violations rising from $30 to $75 last year, while interest payments on car loans presently represent 16% of the total cost of ownership. The tax went up by $15 per ton from the 1st of April, which means it presently accounts for 17.6 cents for each liter sold, up about 3.3 cents per liter, while diesel increased about 4 cents per liter.
Julien Brault, CEO of Hardbacon, says in Toronto, the sharp rise in car ownership costs is a wake-up call for many people and it highlights the importance of considering all expenses which are related to owning a vehicle, and not just the purchase price.
