Owning a car is expensive. Apart from the cost of buying it, you need to be able to keep it running! Those expenses can add up.

Costs associated with buying a car

Getting your licence

The combined cost of driver’s education courses and guides can be over $1,000, and exams are around $40. Then there’s your learner’s licence ($70.41) and your probationary licence ($175.68). That’s a big expense you may not have thought about. Make sure you include these costs when budgeting for a car.

Inspection

You can save money if you or a friend have some mechanical experience. Otherwise, you should expect to pay for an inspection that will tell you the condition of the car and what repairs are needed. Prices will vary based on the extent of the inspection. This is an important step in your decision to buy a used car and in negotiating the final price.

Taxes

Depending on whether you buy your car from an individual or a dealer, and whether it is new or used, taxes may apply This link will open in a new window. They can add up to hundreds or even thousands of dollars, so remember to budget for them.

RDPRM (Register of personal and movable real rights)

If you’re buying a used car, plan to spend at least $3 to consult the RDPRM This link will open in a new window, the Québec government’s on-line register where you can find information on the vehicle you’re thinking about buying. You can check whether it might be seized because someone else has defaulted on a loan. Consulting the register for a small fee could save you thousands of dollars!

Recurring annual costs

Borrowing costs

If you need to take out a loan to buy your car, consider the interest you’ll be paying. This is money you won’t be able to use for other expenses, so you might as well budget for it right away.

Example:

If you borrow $10,000 at an interest rate of 9% over a period of 3 years...

You will have paid $1,450.88 in interest costs.

Vehicle registration

Vehicle registration fees for 2019 in Québec vary between $194 and $269, depending on your region. Why so high? A large portion of these fees goes to pay for insurance covering road accident injuries. This is your contribution to the Québec auto insurance plan.

Insurance

All vehicle owners in Québec must purchase insurance. Depending on the coverage you choose, it can cost anywhere from a few hundred to a few thousand dollars. Find out the cost of insurance before you buy. Checking with several insurers could save you a bundle.

Maintenance and gas

Driving a car can cost several thousands of dollars per year. The CAA offers a  calculator This link will open in a new window to help you budget these costs.

Insight

Solutions for making it work

  • Save as much as you can before buying.
  • Avoid paying interest charges.
  • Draw up a budget to determine whether you can afford the annual cost of using your car.
  • Buy a car that you can afford.
End of the insight