How Much Car
Can I Afford?
The sticker price is just the starting point. Here's how to calculate the real cost of vehicle ownership in Canada — and set a budget that won't squeeze you.
Start with Your Take-Home Pay, Not the Sticker Price
Most people start by browsing vehicles and then work backwards to see if they can afford them. A better approach is to start with your monthly budget, decide on a maximum payment, and then find vehicles that fit — not the other way around.
At $400/month over 72 months at 9.99%, you could finance approximately $23,000. Add a $3,000 down payment and your vehicle budget is around $26,000 before taxes.
The 6 Real Costs of Vehicle Ownership
Budget for all of these before committing to a monthly payment.
Monthly Loan Payment
Your principal + interest payment each month. This is the number most people focus on, but it's only part of the picture.
Insurance
In Canada, insurance averages $1,500–$3,000/year depending on province, age, driving record, and vehicle. Get a quote before you commit to a car.
Fuel
A pickup truck at $2.00/litre driving 20,000 km/year costs roughly $3,200 in fuel annually. A hybrid can cut that in half.
Maintenance & Repairs
Budget $600–$1,200/year for routine maintenance on a used vehicle. Older, higher-mileage vehicles can exceed this.
Registration & Licensing
Annual plate renewal, licensing fees, and any safety/emissions tests — typically $100–$400/year by province.
Depreciation
Not a monthly bill, but a real cost. A new vehicle loses 20–30% of its value in the first year. Consider this if you plan to sell.
Don't Forget Taxes and Fees
In Canada, the purchase price is almost never what you actually pay. Add these to your budget:
Provincial Sales Tax / HST
Ranges from 5% (Alberta) to 15% (Atlantic provinces). In Ontario, HST is 13%. This is added to the loan — so a $30,000 vehicle becomes $33,900 financed.
Dealer and Documentation Fees
Administration fees, registration, and documentation charges can add $300–$600 to the total cost. These are often negotiable or waivable.
Freight and PDI
On new vehicles, freight and pre-delivery inspection charges ($1,500–$2,000) are added by dealers. Always ask for these to be itemized.
Extended Warranty / Add-ons
Extended warranties, rust protection, and paint sealant are sometimes added to loans without obvious disclosure. Review your contract carefully.
Common Questions
Know Your Number Before You Shop
Use the Motofi calculator to see real monthly payments, then apply and let lenders compete for your business.