Most folks on the prairies know the old saying that the cheapest thing about a horse is buying it. After that, the real expenses add up fast – recurring vet bills, feed prices, boarding and equipment costs can take the joy out of any ride.
For Albertans, that same wisdom applies to car ownership. Everyone loves the convenience that driving can offer, but over time the cost of car ownership can become a buzz kill – especially when you watch expenses rise and the car’s value depreciate with each passing kilometer.
Cost of Car Ownership
Take the example of a new standard compact car purchased for around $27,000. Depreciation of 25% during the first year takes a swift and deadly bite out of the car’s value, peeling an additional $7,000 off its new owner.
Then, after the first year, routine maintenance kicks in and tasks like replacing brake pads, fluids and oil changes are necessary to maintain warranty but can make annual expenses soar.
| Cost of Car Ownership (Compact Car) | |
| Purchase – New Vehicle | $27,705 (MSRP) |
| Year 1 Depreciation (25%) | $6,926 |
| Insurance | $1,316/year |
| Fuel | $878/year |
| Maintenance | $1,450/year |
| Parking | $3,600/year |
| Total | (-$14,170) |
Unavoidable fuel costs take another $1.17/litre out of the pocketbook. With most Alberta drivers logging 15,200km per year, that’s around $878 annually (based on 5L/100km). Older and larger vehicles can average far less efficiency than 56km/litre, making that cost burden climb much higher. Insurance and parking, especially for urban dwellers, can be sinkholes for hundreds of additional dollars each month.
Car-Free Reality
An increasing number of savvy Calgarians are making the switch to car-free lifestyles, for plenty of great reasons. For some, it’s frugal practicality or the desire to reduce emissions. Others simply want to shed some non-essential burdens in favour of a lighter lifestyle.
Flexible transportation options like car shares and on-demand car services are steadily growing to meet demand. Trends like work-from-home are quickly becoming a long-term way of life and urban Calgarians are choosing exciting new living spaces located in walkable, well-connected communities – all driving down the need to rely on a car.
Between shifting lifestyle preferences and the deterrent of vehicle costs, the old dream of owning a car is swiftly being replaced by the possibilities of carefree, car-free living.
JEMM Properties’ newest development, Bridge, is a car-free rental development under construction in the heart of urban Bridgeland. Bridge will offer residents cutting edge convenience that keeps the fun going, with electronic parcel delivery and smart building technology. Sign up to get connected with the latest news about Bridge.
Want to learn more about the cost of vehicle ownership? Check out these helpful sources:
- https://www.autotrader.ca/newsfeatures/20200409/march-2020-price-index-results-released
- https://www.thinkinsure.ca/car-insurance/alberta-quote.php
- https://www.canadadrives.ca/blog/maintenance/setting-your-annual-car-maintenance-budget
- https://www.cbc.ca/news/canada/calgary/calgary-downtown-parking-2019-price-check-1.5082994
- https://www.thinkinsure.ca/insurance-help-centre/average-km-per-year-canada.html
- https://www.motortrend.com/features/small-cars-subcompact-compact-best-gas-mileage-mpg
- https://ama.ab.ca/auto/buying-selling/driving-cost-calculator
- https://www.finder.com/ca/what-is-car-depreciation
- https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000101&pickMembers%5B0%5D=2.2&cubeTimeFrame.startMonth=01&cubeTimeFrame.startYear=2021&cubeTimeFrame.endMonth=12&cubeTimeFrame.endYear=2021&referencePeriods=20210101%2C20211201