Key takeaways
- Adult transit in big cities: about $90 to $155 a month (October 2026)
- The CRA’s 2026 car allowance is $0.73 per km for the first 5,000 km and $0.67 after: about $730 a month for 12,600 km a year
- Insurance is often the biggest surprise for newcomers with no Canadian driving record
- A car can make sense for suburban jobs, shift work or families with young children
Is it worth buying a car in Canada?
For most newcomers in Toronto, Vancouver, Montreal, Ottawa or Calgary, not in the first months. Transit costs a fixed, known amount. A car adds a loan or a large cash payment, insurance, fuel, parking, maintenance and winter tires. You also need a licence that is valid in your province.
A car can be worth it if your job is far from transit, you work shifts when buses do not run, or you carry young children every day. Try your own numbers in the car vs transit calculator.
Starting with transit also buys you time. In your first months you can build a Canadian credit history, get your provincial licence, and collect a driving record. All three can lower what you pay for a loan and insurance later.
What transit costs (October 2026)
| City | Adult monthly transit |
|---|---|
| Halifax | $90.00 pass |
| Edmonton | $102.00 cap |
| Montreal (Zone A) | $110.00 pass |
| Vancouver (1 zone) | $117.20 pass |
| Winnipeg | $119.35 pass |
| Calgary | $126.00 pass |
| Ottawa | $138.50 cap |
| Mississauga | $145.00 pass |
| Toronto | About $155.10 cap (47 × $3.30) |
From each agency’s fares page. Full details on our monthly pass by city page.
What a car really costs each month
A car has two kinds of cost. Fixed costs you pay even if the car sits in the driveway: the loan or lease payment (or the value the car loses each year), insurance, registration and parking at home. Running costs grow with every kilometre: fuel, oil changes, tires and repairs.
A simple official benchmark is the Canada Revenue Agency (CRA) “reasonable” per-kilometre allowance that employers can pay for work driving. For 2026 it is $0.73 per km for the first 5,000 km and $0.67 per km after that in the provinces. It is meant to cover the full cost of running a car.
| Driving per year | At CRA 2026 rates | Per month |
|---|---|---|
| 5,000 km | $3,650 | About $304 |
| 12,600 km (15 km each way to work, plus errands) | $8,742 | About $729 |
| 20,000 km | $13,700 | About $1,142 |
This is an estimate, not a quote. A paid-off older car costs less; a new car with a loan and downtown parking can cost more.
Car insurance: the cost that varies most
Insurance is required in every province. The price depends on where you live, your age, the car and your driving record. Newcomers often pay more because insurers cannot see a Canadian record.
Industry averages give a rough idea. A secondary summary of General Insurance Statistical Agency (GISA) data reports an average premium of about $2,117 a year in Ontario and $1,820 in Alberta for 2025. In provinces with public insurance it reports about $1,408 in British Columbia (ICBC) and about $1,350 in Manitoba (MPI). In Quebec, the public plan (SAAQ) covers injuries and private insurers sell the rest.
- Many new drivers in Toronto are quoted far more than the provincial average.
- A letter from your insurer at home showing claims-free years can lower your price. Ask for it before you move.
- Get at least three quotes, or use a broker.
Ontario changed its accident benefits rules on July 1, 2026: some coverages that were mandatory are now optional. Read what you are dropping before you choose a cheaper policy.
Fuel and parking
Fuel: multiply your monthly kilometres by your car’s fuel use and the pump price. For example, 1,050 km a month in a car that uses 8 litres per 100 km is 84 litres. At $1.50 a litre, that is $126. Check real prices in your city in Statistics Canada’s monthly gasoline price table.
Parking: many apartments charge extra for a parking spot, and downtown monthly parking near offices can cost more than a transit pass on its own. Ask your landlord and employer for the real price before you buy a car.
Winter: budget for winter tires and rims. In Quebec they are required from December 1 to March 15. Our winter shopping guide covers the basics.
Side-by-side example: a commute in Toronto
Example only. Your own quotes will differ.
| Monthly cost | Car (example inputs) | TTC |
|---|---|---|
| Car payment | $500 | – |
| Insurance | $250 | – |
| Fuel (1,050 km, 8 L/100 km, $1.50/L) | $126 | – |
| Parking at work | $150 | – |
| Maintenance and tires ($0.10/km) | $105 | – |
| Registration and licence (monthly share) | $10 | – |
| Transit | – | $143.00 (43 trips × $3.30) |
| Total | About $1,141 | $143.00 |
Even if you cut the car payment and parking to zero, this car costs about $491 a month: more than three times the TTC. The CRA benchmark for the same distance is about $729.
Costs newcomers often forget
- Your licence. Most provinces give you a short time to switch to a local licence. If your country has no exchange agreement, you pay for tests and maybe lessons. See licence costs by province.
- Credit and the loan rate. With no Canadian credit history, a car loan usually has a higher interest rate, or needs a large down payment.
- Sales tax on the car. GST, HST or provincial sales tax applies to most car purchases, including many private used-car sales.
- Depreciation. Even with no loan, a car loses value every year. That loss is a real cost when you sell.
- Tickets and tolls. Parking tickets, speeding fines and toll highways such as Ontario’s 407 ETR add up.
When a car makes sense
- Your workplace is in an industrial area or a suburb with poor transit, such as warehouses near airports.
- You work night or early-morning shifts.
- You live outside a big city, where buses run rarely or not at all.
- You drive for work (and your employer pays a per-km allowance).
A middle path: live near transit, and rent a car or use car sharing for big shopping trips. Before you buy, read buying your first car in Canada and check how to exchange your licence.
Common questions
How much does it cost to own a car in Canada per month?
Why is car insurance so expensive for newcomers?
Is transit cheaper than driving in Toronto?
Can I deduct my car or transit costs on my taxes?
Sources
- CRA: Automobile allowance rates (2026)
- TTC: Monthly fare capping
- TransLink: Pricing and fare zones
- STM: Monthly, All Modes A
- Calgary Transit: Fares and passes
- Edmonton Transit Service: Fares and passes
- OC Transpo: Fares
- Winnipeg Transit: Fares
- Halifax Transit: Fares, tickets and passes
- MiWay: Fare prices
- Statistics Canada: Monthly average retail prices for gasoline (table 18-10-0001)
- WealthNorth: Average cost of car insurance in Canada (secondary summary of GISA, ICBC, MPI and SAAQ data)