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The true cost of owning a car a surprise to Canadians

May 27th, 2018  |  Canadian Business

Over half of Canadians don’t know the true cost of owning a car, according to a new study.

Conducted by the Canadian Automobile Association (CAA), the poll revealed that more than a quarter of those surveyed couldn’t even offer a rough estimate of how much they thought running a car cost. Of those that did take a stab at guessing, 20% underestimated the annual cost by nearly $1,000 or more, and 21% over estimated the cost by more than $1,700.

In reality, the average cost of owning and operating a gas-powered car is $3,300. With transportation costs coming in as ”the second-biggest monthly expense” for Canadians, drivers should be clear about how much money they should budget for their car. While things like monthly insurance payments, filling up on fuel, license fees and routine services may be at the forefront for saving, car owner’s should also consider saving an emergency fund incase of any unexpected damage or accidents which could leave them out of pocket.

Additionally, one of the most common costs to be overlooked by driver’s is depreciation, which can almost double the cost of owning a car.

"Depreciation is the loss in value your car incurs over time," says David Wurster, President of Vincentric, a transportation data company that provides the data that powers the CAA Driving Costs Calculator. "In the first year of ownership your vehicle's value drops on average 30%; and between 60 to 70% in the first five years. That is important if you are thinking of re-selling your vehicle in the first five years."