Can the majority of consumers afford to purchase and operate a vehicle in Canada?
According to DesRosiers Automotive Consultants (DAC), acquiring a vehicle became slightly more expensive last year, even as operating one became cheaper thanks to lower gasoline prices in 2020. The CPI for the purchase of passenger vehicles is up 2.3%, which is a slight decrease from 2.6% in 2019.
“While other costs rise and fall, it is gasoline prices that have the most immediate impact on Canadian vehicle owners,” said Andrew King, Managing Partner of DAC. “The drop in gasoline prices seen in 2020 acted as somewhat of a smokescreen, hiding rising prices elsewhere.”
DAC said prices, measured through the consumer price index, revealed a number of notable changes in 2020 — one of them being the shift in gasoline prices. The decrease in prices during this period made operating a light vehicle 2.6% less expensive overall, even as increases were observed in all other operating categories.
For example, insurance was up — by 6.0% — a number DAC considers even more remarkable when we look at how often (and it was not often) that people drove their vehicles in 2020.
Vehicle maintenance and repair costs for parts and services also increased, at a modest 1.7%, and the CPI for service increased at a greater rate than for parts — a trend that DAC has seen consistently in recent years.