Canadians are less likely to own a vehicle due to high rate of inflation, shows report

TORONTO — According to the second annual Car Ownership Index from Turo, in partnership with Leger, Canadians are concerned about the monetary pressures of car ownership caused in part by high rates of inflation and an increased cost of living.

The Index is a benchmark study surveying a representative sample of 1,500 Canadians, which analyzes the state of car usage and ownership in Canada.

Financial motivators and economic swings have had a strong influence on consumers’ approaches to car ownership.

Findings of the 2023 Index revealed:

• Over one in three Canadians (39 per cent) surveyed are less likely to buy or lease a vehicle this year due to recent rates of inflation.
• Of those surveyed who own or lease a vehicle, but are planning to stop in the future, 55 per cent cited high costs as their main reason for doing so.
• Twenty-four per cent of Canadians surveyed were particularly concerned about monthly payments, citing it as the primary motivator for ending ownership, which is double the 2021 report figure.

Although car ownership is a significant expense for Canadians, cars remain underutilized. Those surveyed pay an average of $4,810 a year for their vehicle, even though it sits idle 96 per cent of the year. However, when they are using their cars:

• More than half (55 per cent) of car owners surveyed who work agree they would have to change jobs if they did not have a car.
• In addition to commuting, Canadian car owners cite convenience (31 per cent) and the desire for freedom (20 per cent) as the top reasons for having a vehicle.

“Given how integral vehicles are to our ability to work, explore, and perform everyday tasks, it’s understandable that many feel it would be impossible to go without one despite increasing financial pressures and low usage rates,” said Cedric Mathieu, Senior Vice President and Head of Turo in Canada. “The findings highlight that Canadians could benefit from cost offsetting solutions like peer-to-peer car sharing, which transform idle assets into sources of income. Peer-to-peer car sharing also allows Canadians to keep their essential vehicles while making car ownership more efficient and affordable.”

While 26 per cent of those interested in buying or leasing EVs are motivated to choose a better car for the planet, a larger proportion (38 per cent) are driven by a desire to save money on gas. Similarly, hesitations around purchasing an EV relate back to monetary considerations, as 31 per cent of those surveyed across Canada cited costs as their primary apprehension about buying or leasing an EV.

Despite these concerns, Canadians’ interest in alternatives to combustion engine vehicles remains strong. Similar to Turo’s first Car Ownership Index, over half of Canadians surveyed (54 per cent) plan to buy a hybrid or electric vehicle. For Quebecers, who are the most eager to adopt EVs, this figure jumps to 64 per cent.

For many, extended test drives offer an attractive opportunity to convert interest into adoption. Most Canadians surveyed (54 per cent) would be more comfortable buying an EV if they had the opportunity to test drive one for a few days or weeks before making a decision to purchase.

“Although the focus around car ownership and usage has shifted to affordability this year, the study shows several Canadians continue to seek EV and hybrid options,” said Christian Bourque, Executive Vice-President and Senior Partner, Leger.

The survey was conducted by Leger for Turo in Canada, from January 9 to 18, 2023. It consisted of a representative sample of 1,500 English or French Speaking Canadians 25 years of age or older.