The Real Cost of Vehicle Ownership

Updated: March 1, 2022

Most people don’t truly understand all of the costs associated with owning/purchasing a vehicle. Let’s take a look at the math.

For this example, we are going to use Ford because I drive an F150. I based vehicle purchase costs on the manufacturer’s suggested retail price (MSRP) as reported in Canadian Black Book. The trade-in values are the average wholesale values from Canadian Black Book. Be realistic, in your analysis, about kilometres driven per year, litres/100 kms (based on driving style), insurance rates, repairs and maintenance and, particularly now, the cost of fuel.

The point is, put pen to paper and do some calculations. My two sample calculations are based on buying a 2010 Ford Focus and a 2010 Ford F150 new in 2010 and then selling them six years later. Both vehicles were financed at a five percent interest rate for six years.

The details are as follows:  

Now that you have done all of the calculations let’s start thinking about what this all means. Assume the Ford Focus’s cost per kilometre is $0.27, and the Ford F150 is $0.43.

I live in Quispamsis, NB, and it’s a 13 km trip each way to my office in Saint John, or 26 km round trip (you’ll need to add the costs of tolls if that applies to you). I drive a Ford F150, so that costs me $11.18 per day, $55.90 per week and approximately $246 per month just to drive back and forth to my office.

That is necessary travel; there is a cost for it, but I could reduce the cost dramatically if I drove a cheaper, more fuel-efficient vehicle such as the Ford Focus.

For some people, it actually may make sense not to own a vehicle. It might be more practical to use public transit, walk, bike, and use taxis for regular travel and rent a car when you have to take a more extended trip. Not owning a vehicle works well for people living in large urban centres but not so much for individuals residing in rural areas or families with children.

Where you need to consider this cost is on all of your discretionary travel. For me, a Saturday trip to Moncton (263 kms round-trip – $124), or a shopping trip to Costco in Saint John (30 kms round trip – $14). The lesson is, think about the cost of ownership before you buy and then think about the cost of use and think ahead to consolidate trips, skip the trip, or carpool with friends and co-workers.

The cost of vehicle ownership also needs to be considered when you choose where you live. While the cost of housing may be cheaper in rural New Brunswick, the travel cost can offset the housing cost savings. Add to this the exorbitant cost of fuel, which shows no signs of reducing in the near future, choosing where to live needs to be considered carefully.

If we had a meter in our vehicle that required us to pay for each trip, we would probably pay closer attention to the cost.

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