When Asad Chaudhary and his wife purchased their first home in 2019, they took a familiar concept in their sprawling city – drive until you qualify – and tried a different route.
The couple was renting a two-bedroom 1,100-square-foot condo in downtown Calgary, close to work and their son’s daycare. They wanted more space, ideally another bedroom and a small yard. To find a home within their $400,000 to $600,000 budget, they’d have to move farther from the city core, a trade-off familiar across Canada.
“We decided we would do a variation of what folks normally do, which is you drive five minutes farther on the highway, and your housing price goes down,” Chaudhary says. Instead, they looked for neighbourhoods along Calgary’s LRT lines with safe cycling routes for their e-bikes.
That “e-bike until you qualify” approach led them to Westgate, a southwest Calgary community, where they found a three-bedroom bungalow on a large lot. It was a bit smaller than their condo, but close enough to transit and bike routes that their one car sat mostly unused.
That wasn’t an accident. Growing up, Chaudhary had seen how car dependence shaped daily life when his family moved to Westchester County, N.Y., where long commutes were just part of the deal. Later, living car-free in Edmonton, he discovered he could get around easily (and cheaply!) by bike. When it came time to buy in Calgary, those earlier experiences reframed how he thought about the decision.
Chaudhary estimates a second car would have cost them hundreds of dollars a month. As young professionals with student debt and little kids, he and his wife found that maintaining a car-light lifestyle was a big part of making their mortgage work. He points to the cost of maintenance alone: over five years, he’s spent about $1,500 total on two e-bikes, compared to the $1,400 to $1,500 Canadians typically spend maintaining a single car in just one year. Add in financing, insurance, fuel, and registration, and the savings from avoiding a second vehicle speak for themselves.
Chaudhary’s approach is not the norm – most Canadians leave transportation out of the affordability equation entirely. Yet transportation costs, largely driven by vehicle ownership, can rival or even exceed housing costs, creating a hidden second mortgage.
The savings from avoiding a second vehicle can add up to tens of thousands of dollars over a few years.Pexels
The Affordability Action Council calls this an ‘affordability paradox’: Canadians must choose between lower-cost suburban homes that require costly car ownership, or higher-cost housing in urban cores where transit can make car ownership unnecessary. Part of what makes the paradox so costly is that most people don’t have a clear picture of what car ownership is actually costing them.
Canadians typically account for the obvious costs like payments, insurance, and gas, but they often overlook maintenance, financing costs and eventual replacement. “Transportation is a hugely underestimated expense,” says Shay Steacy, a Certified Financial Planner at Modern Cents, an advice-only firm in Ontario.
According to Ratehub.ca, the average car costs about $1,373 per month, covering car payments, gas, maintenance, insurance, administrative fees, and parking. For a new car, that number climbs to $1,504. Those figures are on par with a mortgage payment in some parts of Canada, except the asset is losing value the whole time.
Over nine years, which is the average period Canadians own a vehicle, those costs add up to roughly $139,716. That’s not a rounding error. Nearly $140,000, and almost no one thinks to weigh it against what they’re spending on a home.
And that’s before accounting for inflation. The escalating conflict in the Middle East has pushed gas prices significantly higher, adding an average of $76 a month in fuel costs alone as of April 2026. There are also costs that are harder to measure, like the value of time lost to long commutes or the spending they tend to trigger, from takeout meals to convenience purchases.
After about nine years, the vehicle will need to be replaced, either with an upfront purchase or a new set of monthly payments. According to the AutoTrader Price Index, a new vehicle in Canada averages $63,439 plus sales tax, while a used vehicle costs $35,201. And that’s just for one vehicle. Many Canadian households have more than one: according to Statistics Canada, 34% have two vehicles, and 14% have three or more, meaning a two-car household is paying close to $2,750 a month on transportation alone.
Society acknowledges being ‘house poor’ far more than being ‘car poor,’ even though the two can look remarkably similar. “I find people get into trouble financially with two big things: overspending on a house or overspending on a car,” says Steacy.
Some Canadian cities like Edmonton have set targets for their residents to spend less than 35% of their household budget on housing and transpotation.benedik / Getty Images
Some regions in Canada are rethinking the math, and Metro Vancouver is leading the way. For more than a decade, the district has studied housing and transportation costs together, challenging the conventional benchmark that defines housing as affordable if it consumes less than 30% of a household’s pre-tax income.
“We’re highlighting that not only is housing cost important to affordability in a region, but actually where that housing is located and the transportation options has a huge impact on how truly affordable a neighbourhood is or is not,” says Jonathan Cote, Metro Vancouver’s deputy general manager of regional planning and housing development.
A 2025 study update found that the average household spends about $22,000 annually on housing and $19,000 on transportation. In several municipalities, average transportation costs exceeded housing costs. By contrast, households in urban centres and along rapid transit corridors, particularly the SkyTrain network, consistently faced lower combined costs. According to the study, delivering good public transit remains one of the best ways to improve affordability.
Edmonton is also challenging the 30% guideline for housing. Its City Plan sets a target of residents spending less than 35% of average household expenditures on housing and transportation combined, and the city aims to transform its mobility system to achieve this. Of course, not every city prioritizes reliable transit networks or safe bike infrastructure, leaving millions of Canadians to see driving as the only practical choice. For those people, the lesson is that car dependency needs to be factored in from the start, not discovered after the house is already bought.
Steacy says the current housing market is forcing a rethink of long-held financial norms, including the idea that homeownership is the default path to financial security. Chaudhary sees a similar unquestioned norm around transportation. “A lot of people just have the assumption, 'I’m now 16, I have a driver’s license, therefore I’m going to get a car, and I will always have a car,'” he says. “That’s held up as normal, and so it’s hard for most people to look beyond that.”
But looking critically at transportation norms and costs means the “cheaper” home – usually in the suburbs – often isn’t cheaper at all. The sticker price is lower, but the bills arrive every month as car payments, insurance premiums, and multiple tanks of gas. Canadians who do the full math tend to find that access to transit is worth more than they thought, and that the home they can actually afford isn't always the one with the lowest asking price. As the saying goes, caveat emptor – and yes, that includes buyers of cars, too.
