If you own a car, it's likely you don't know how much it's actually costing you. A study by the Canadian Automobile Association (CAA) revealed that 67 per cent of Canadians don't know the true cost of owning and operating a vehicle, which averages to about $9,000 per year—ouch! For those of us struggling financially, getting rid of our car can be one surefire way to get our finances back on track.
5 Car Expenses that can Break Your Budget
According to the Chief Strategy Officer of CAA National, Mr. Jeff Walker, transportation costs are the second-biggest monthly expense for most households. Most of us tend to forget about or overlook the extra costs that come with having a vehicle, such as fuel, insurance, maintenance and repairs, which can all add up very quickly.
After you’ve dropped some cash on a car, you need to protect it (and keep yourself and others protected). Of course, that’s not always going to be cheap, and where you live is a big factor. Car insurance rates vary widely across Canada, from about $640 annually in Quebec to nearly $1,680 in British Columbia (sorry, guys).
Your car is no good unless it’s gassed up. Unfortunately, that costs money! The Government of Canada keeps track of gas prices, and once again, looks like BC leads the pack with the highest fuel costs. (You guys just can’t catch a break.)
What would you do with an extra $800 a year? That’s what the average Canadian is spending on car maintenance. You also can't forget about tires, and because we live in Canada, you'll need two sets: One for winter and another for summer. Changing them will also cost you, which can be anywhere from $60 per tire to $125.
Some things increase in value over time—such as jewelry, artwork or real estate—but unfortunately, cars do not. In fact, cars start to lose their value the moment we drive them off the lot. Some experts agree that a new car can lose up to 20 per cent of its value after just one year.
Licence and registration fees
These fees can set you back a couple hundred bucks a year. It might not seem like much, but when you consider that 48 per cent of Canadians are just $200 away from being broke, that cost could make a big difference.
How to get by without a car
So, what can you do? If it’s possible (and I know it’s tough to consider), think about giving up that gas guzzler. Not only will you spare the Earth harmful carbon dioxide and greenhouse gas emissions, you’ll also be sparing your wallet a lot of money. (We didn't even mention the cost of parking, tolls, and tickets!) Consider these alternatives to getting around:
Use public transit. If you live in a big city, public transit can be your budget's best friend. Plus, many public transit systems now offer more spacious seating, televisions, and even free wifi!
Carpool. Talk to your neighbours, roommates, family, friends and co-workers to see if this is a smart solution for all of you.
Consider a car-sharing service. Sometimes you just need a car, and nowadays, you can pick one up by just using your phone. See if car-sharing services like Zipcar are available in your area.
Walk. That's right, hop on the heel-toe express! It’s not just good for you, it also gives you some good me-time. (And your pedometer will love you for it!)
Bike. If you haven’t ridden a bike since you were a kid, give it try! It’s actually kind of fun. Just be sure to wear a helmet.
Credit Canada can help find savings in your budget if you can't give up your car
If you’re struggling financially but giving up your car just isn’t an option, we’re here to help. Contact Credit Canada by calling 1.800.267.2272 and we'll set you up with a free counselling session with one of our certified Credit Counsellors. They will be able to review your budget and expenses, and help you find the savings you're looking for. It’s completely free, confidential, and non-judgmental, and we may be able to find a solution that doesn't require giving up your wheels!