The Auxiliary Costs of Car Ownership in Toronto
Sick of lugging groceries onto the bus or paying for Uber? You may think buying a car can help avoid those expenses, but be careful with hidden costs. Many people forget the cost of maintenance, parking, gas, and insurance. These auxiliary fees can really add up and be a drain on your budget. Here’s a peek at some of the costs you need to consider before becoming a car owner.
How Much Is the Loan or Lease Payment?
Buying or leasing a car usually requires a down payment. Financial advisors suggest having 20% of the value available as a down payment. You should also stretch your auto loan or lease no longer than five years. Car payments vary according to the type of car and features you want. But it’s pretty safe to say that your car payment will be at least $300/month, even if you buy a used vehicle.
What About Gas?
The price you’ll pay for gas depends on how many kilometers you drive each week. The fuel efficiency of your chosen vehicle can also impact the bottom line here. Let’s estimate that you’ll drive at least 500km per month, which means filling up at least once a month. Gas is around $1 per liter in Ontario, suggesting a $50/month fill up average.
Don’t Forget About Maintenance
Buying a used car can save you money on car payments and insurance, but you may pay more in maintenance. If your car doesn’t have a warranty, you should be setting aside money each month. The monthly allowance covers maintenance costs like oil changes, filters, tire rotations, and any unexpected repairs.
Administrative and Parking Fees Add Up
Don’t forget the cost associated with registering your vehicle and getting your plates. Some provinces also charge for emissions testing, which can be extra. A license plate sticker must be renewed every year and costs at least $120 in Ontario.
Parking can be expensive or cheap, depending on where you live. A house with a driveway comes with free parking. Toronto has a $16/month street parking permit. Garages, metered street parking, and parking lots all charge different prices. You should expect to spend at least $50 a month on parking, but those costs may go up.
The Cost of Insurance will Factor In
The average cost of auto insurance in Ontario is around $1,500 per year. Providing an absolute number here is hard since many factors determine the rate you pay. Look at Toronto auto insurance quotes from many different companies to paint a more accurate picture of the cost. You should expect to pay at least $200/month for auto insurance, but the cost may be more. You’ll need to speak with an insurance provider to learn your true cost.
Can Uber or Lyft help?
You may be tempted to take up a part-time job as a ride-share driver to help offset the cost. Just be aware that these gigs have increased maintenance costs for your vehicle and may cost you more on your insurance.