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The true cost of owning a car is higher than ever. Here’s how to get it

Canadians have more cars on the road than ever before, and some drivers aren’t even factoring maintenance costs into their budget

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Canadians already know that owning a car is a big cost, but many potential owners do not take into account the additional costs when buying. The pandemic put more cars on the road, by 6.5 percent Between 2020 and 2021according to Statistics Canada.

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inflation and Supply chain demands have had an impact on the industry.

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The reduced supply of semiconductor chips used in functions such as navigation – combined with the shutdown of pandemic factories – has led to Less manufacturing of new cars. Which in turn led to an increase in the demand for used vehicles. The result was an increase in prices for both markets.

The price of new vehicles increased by 7.2 percent in March 2022, compared to the previous year. Meanwhile, used car prices have risen more than 20 percent in the same period. With more of your salary directed toward car payments, it may prompt you to put off car maintenance to save some cash in the short term.

This could be a terrible move, says Christine D’Arbelles, director of public affairs for the Canadian Automobile Association (CAA).

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“A lot of people look at the car and its sticker price and think that’s the price it’s going to cost me for the car… and then I’ll go on a fun road,” she says. “There are a lot of costs that they forget to include in their budget.”

Should you buy new?

When considering buying a new car, some Canadians may think that buying a new car will lower maintenance costs, and they may be right. However, people still tend not to put an adequate level of savings away from maintenance, says D’Arbelles.

A study conducted by the Civil Aviation Authority in 2018 suggested that [67 per cent of Canadians](https://www.caa.ca/news/canadians-unclear-about-the-true-cost-of-owning-a-vehicle/#:~:text=OTTAWA%20%E2%80%93%20Two %2Dthirds%20 (67, Chief%20Strategy%20Officer%2C%20CAA%20National) Don’t understand the full cost of the car.When polled, 20% underestimated the annual cost of the car by $1,000 or more.

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“A small mid-size car like a Honda Civic, if you drive about 20,000 kilometers a year, you want to set aside about $1,200 a year for maintenance costs,” she says. “This is the maintenance recommended by the manufacturer, which is a good thing to keep in mind.”

But of course, right now, it’s very difficult to get new cars, with supply chain requirements leading to massive waiting times for Canadians looking for a new car.

It includes Electric vehicles (EVs), which D’Arbelles says can actually reduce maintenance costs. While you still have to take care of the car, you avoid the cost of replacing things like hoses and belts. And while the initial costs can be higher, in the long run they may be worth it.

“If you go from $2,000 to $300 of the dollars you use to power your car…you usually break within five years,” says D’Arbelles.

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D’Arbelles says that as electric vehicles become more popular, so do maintenance costs. While you won’t go down to zero, the difference could be more than $2,000 per year.

“In general, to be honest with you, the cost of owning and operating an electric vehicle is much cheaper than a gas-powered vehicle,” she says.

What about the beater?

Another option is to buy a used car, and you can save tons of money by buying a used car with some wear on it. This is something Canadians might consider because used car prices are also increasing.

At the start of the pandemic in 2020, the average cost to buy a used car was $27,029, Autotrader spokesperson He told CTV News. However, by June 2022, the average cost had risen to $38,097; An increase of 41 percent.

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“Some people don’t have credit Or availability to buy an expensive car,” says D’Arbelles, and that might be the only option they have. Maintenance is huge in this case.

In addition to recommended basic maintenance, D’Arbelles recommends setting aside $25 to $50 of each paycheck to account for not just maintenance, but repairs.

“This is different from maintenance,” she says. “If you’re buying an old car, you’ll need money to fix it.”

Cut costs

No matter which route you choose, D’Arbelles says, there are ways to keep both maintenance and costs low. The CAA Has tips for fuel efficiency can reduce gas pricesIt also helps with maintenance.

Some of these tips include keeping your tires inflated, which allows for maximum performance and keeps your vehicle more fuel-efficient. You can also refrain from doing a “rabbit jack starts” (where the driver presses hard on the gas), says D’Arbelles and slows down to slow.

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“All of this saves money on gas, but it does wonders on maintenance schedules, too,” she says. “You extend the life of your brakes, and you extend the periods you have to brake.”

“It’s not fun”

D’Arbelles says buying a car should be fun, but that’s simply not the case these days. With both fuel and automobile prices on the rise, even used cars can be very expensive. And D’Arbelles says Canadians should continue to prepare for some sticky shocks, even in the used car market.

“Five thousand dollars is not going to get you what you got a few years ago,” she says. “It’s not fun to get used vehicles these days.”

But don’t let that get in the way of keeping up with maintenance costs, says D’Arbelles.

“If you stick to the recommended maintenance schedule, your car will last longer,” she says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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