Vehicles are shown at a Windsor car dealership on March 4, 2025. (Credit: WINDSOR STAR – DAN JANISSE)
As the price to own a car in Canada climbs, there’s a growing disconnect among Canadians between what they expect to pay and reality.
More than 80 per cent of Canadians expect to pay less than $750 per month for a car payment, while 32 per cent expect to pay less than $250, according to a recent survey from Deloitte Touche Tohmatsu Ltd.
Yet according to data from J.D. Power and Associates, the average new car payment is nearly $900 per month, while the average used car payment exceeds $760 monthly.
AutoTrader predicts monthly payments will just go higher.
“If new car prices climb due to the trade unclarity with the United States, we may see an increase in monthly payments to over $1,000, which would be a first in Canada,” the company said in a recent report.
AutoTrader – which reported used car monthly payments at $637 – expects that figure to climb as well.
“With no expectation of a significant decline in vehicle prices, limited prospects for meaningful interest rate cuts, and assuming consumer demand remains broadly stable, we expect monthly payments to remain elevated but largely steady in 2026,” it said in the report.
The disconnect can also be seen in car loans, where 81 per cent of respondents to the Deloitte survey expect to sign a loan for 60 months or less, while JD power suggests more than half of vehicle loans have an 84-month duration.
Just five per cent of respondents said they expect an 84-month loan or longer.
According to AutoTrader.ca, the average cost of a new car was $63,439 in December 2025, down 2.7 per cent year-over-over. The average cost of a used car was $35,201, up two per cent year-over-year.
However, still elevated prices, higher interest rates and more costly auto insurance are keeping more buyers on the sidelines, as Canadians hang on to their current vehicle a little longer, the report said.
Insurance rates are expected to remain high, despite an 18 per cent drop in auto thefts since 2024, said a recent report from RateHub.ca.
“With theft rates on the decline, it can help in achieving a more stable market for pricing insurance in the near future,” Matt Hands, vice-president of Insurance at Ratehub.ca. “However, the cost of claims alone is still higher than pre-pandemic levels, due to more expensive vehicles, repairs and maintenance.”