Vehicle Ownership

Vehicle purchases can be very complicated. For some people buying a vehicle is steeped in emotion. They have been bitten by the bug and for them a vehicle is much more than just transportation.

We, however, are going to look at vehicle ownership solely from a financial perspective. And to put it bluntly, vehicles are a wealth destroyer. Decisions you make about vehicle ownership will impact your financial future in a major way. This is because transportation is usually the third largest expenditure for the typical family (taxes are #1; housing is #2).

Vehicles are very expensive to own. You get wealthy by owning assets that go up in value every year. Vehicles do the opposite; they drop in value a lot every year (this is called depreciation). Vehicles are also very expensive to operate (financing, maintenance, insurance, gas and parking).

Wealth tip: The longer you can put of vehicle ownership the better off you will be financially. By a lot! But the key is to save and invest the difference.

The annual cost to own a vehicle

The cost of vehicle ownership is much higher than most people think. Ratehub estimates it costs $1,387/month or $16,644/year to own the average car in Canada in 2024. Remember, this is the amount after-tax. This is the same as $25,600 before-tax (assuming a 35% tax rate). Is that what you would have estimated? To read more click here.

CAA Driving Costs Calculator

To help you build a better understanding of all the ongoing costs of owning a vehicle using the calculator click here.

Got to Own a Vehicle?

Having an affordable and reliable form of transportation is essential for lots of people (for work and/or family reasons). What are the best options from a financial perspective? Click here.