The average car payment in Canada is $700–$750/month for a new vehicle — driven by rising prices (average new vehicle $66,000+) and higher interest rates. Here’s the full breakdown.
Average Car Payments
| Vehicle Type | Average Payment | Average Price | Average Term |
|---|---|---|---|
| New car | $735 | $66,000 | 84 months |
| New truck/SUV | $800 | $72,000 | 84 months |
| Used car (3–5 years old) | $475 | $32,000 | 72 months |
| Used car (5+ years old) | $350 | $20,000 | 60 months |
Payment by Loan Term ($40,000 at 6.99%)
| Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 36 months | $1,234 | $4,432 | $44,432 |
| 48 months | $956 | $5,888 | $45,888 |
| 60 months | $792 | $7,488 | $47,488 |
| 72 months | $684 | $9,248 | $49,248 |
| 84 months | $607 | $10,988 | $50,988 |
Extending from 60 to 84 months saves $185/month but costs an extra $3,500 in interest.
How Much Car Can You Afford?
| Gross Monthly Income | Max Payment (15%) | Affordable Price (5 yr) |
|---|---|---|
| $4,000 | $600 | ~$28,000 |
| $5,000 | $750 | ~$35,000 |
| $6,000 | $900 | ~$42,000 |
| $8,000 | $1,200 | ~$56,000 |
| $10,000 | $1,500 | ~$70,000 |
Lease vs. Buy
| Factor | Lease | Buy (Finance) |
|---|---|---|
| Monthly payment | $400–$600 | $700–$800 |
| Own the vehicle | No | Yes (after payoff) |
| Mileage limit | 16,000–20,000 km/year | Unlimited |
| Wear and tear | Charged at end | Your problem |
| Long-term cost (10 years) | Higher | Lower |
| Best for | Low-mileage, new car every 3 years | High-mileage, keeping 5+ years |
Bottom Line
The average Canadian car payment at $735/month is historic high territory. The best way to reduce it: buy used (3–5 years old), choose a 60-month term or shorter, and put 10–20% down. A 3-year-old vehicle saves you the steepest depreciation while still being reliable and potentially under warranty.
See our car loan rates guide or lease vs. buy analysis for more.
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