What Is The Real Cost Of A New Car?
This article was not written by editorial staff, but by Promutuel, a Car Guide partner.
Nothing compares to the feeling of a brand new car! Many consumers opt for new as opposed to used cars in order to save on repair costs and enjoy a new car. However, what is the cost related to the purchase of a new car?
How to calculate your expenses related to the vehicle:
To understand the calculation of expenses, here are some tips to determine what your car costs you. Make yourself a grid for the costs.
Operational Costs
Depending on the time of the year, these costs vary. This is based on the distance travelled over a year.
- Gas: Fill a tank full of gas and write down the distance travelled to get the average cost per kilometre.
- Maintenance: Routine maintenance is an important element in the life and depreciation of your vehicle. This is why you need to take care of all repairs and follow maintenance schedules. The method used to estimate the average cost of maintenance is to note all the expenses based on the distance you’ve travelled.
- Tires: Tires can influence the depreciation of the car. There are several factors that contribute to tire wear: the type of driving, tire inflation, tight cornering, acceleration, frequent stops, etc. The average cost is calculated using the same method based on the distance travelled.
- Ownership Costs
These costs are mandatory in order to have the right to drive the car in question.
- Insurance: In order to estimate the cost of car insurance, you need to combine all insurance costs. The insurance premium varies depending on many factors such as the driver’s experience, the driver’s insurance history, the mileage driven, etc. Check all these with your insurer!
- Driver’s licence and vehicle registration fees: These are annual flat fees.
- Taxes: Taxes are a one-time fee at the purchase of the car and calculated over its lifetime. On the other hand, vehicles under lease are charged monthly.
- Depreciation: Depreciation is the difference between the purchase value of the car and its resale price (or market value).
If you would like to evaluate the cost of your car, you can also use the CAA online tool. Quick and easy, it helps you calculate the cost of your car. There are two options: the average cost per year based on the type of vehicle or the cost based on the brand or the model of your car.
The average expense for a new vehicle in Quebec
According to a survey conducted by BMO, Canadians spend an average of $26,000 every five years for the purchase of a new vehicle. This represents an investment of $437 per month. Also, this expense is the third largest after housing costs and food. In comparison, in the province of Quebec, the survey mentioned Quebecers pay an average of $22,693 every five years.
The best advice remains to be to compare the different potential vehicles. Take a look at the used car market. It is often possible to find vehicles with good service histories through private sellers or used car dealers.