Does One Really Need to Own a Car in the GTA? Or Are We Better Off Without It?

With local transit services having improved significantly after the FIFA fixtures in the city, and with extensions being actively considered to connect more residential and business areas in the Greater Toronto Area (GTA), the necessity of car ownership for Torontonians is now a topic of serious debate.

Many experts assert that a car is no longer essential, and they have valid reasons for this view. According to Statistics Canada, transportation is the third most significant expense for Torontonians, following shelter and food. Ratehub found that car-related expenses can total more than $139,000 over nine years. This figure was calculated before the recent surge in gas prices, representing a substantial amount of money that could be more useful given the current climate of financial scarcity.

Experiences shared by Canadians from various provinces suggest that living without a car can lead to a better quality of life.

Mark Lotocky, a financial planner and owner of The Dixon Davis Group, a fee-only financial planning firm in Victoria, shared that he lived car-free from ages 19 to 35. “I basically lived in a transit- and bike-friendly area throughout my 20s and into my mid-30s. I found the no-car lifestyle easy to adapt to, and I loved the experience,” he said.

However, this lifestyle can be easier said than done. Ultimately, it comes down to individual preferences. For many, deciding against car ownership when alternative and economical modes of transportation are available is straightforward. But what happens when those options are limited? The costs of taxis, ride-hailing services, rentals, and car shares can quickly add up. In such cases, owning a vehicle can offer significant convenience, allowing spontaneous trips within the city, family outings, or camping excursions. For some, living without a car may not be practical. Yet, many experts argue otherwise.

Mark contends that, aside from occasional road trips, giving up car ownership is still a viable option. He questions how often people truly take long drives. For rare instances when someone needs a vehicle to travel outside the city, he recommends using a car-share service. Michael D’Amato, a life sciences expert living in Vaughan, supports this view. “How wise is it to purchase and maintain a car for years, hoping we might eventually need it for long-distance travel?” he asks. “If we only need to travel to an area without transit occasionally, how much are we really spending?”

Reflecting on his experience visiting a friend, Mark mentioned, “It probably costs $85 to $90 for the night, which is expensive, but still much cheaper than the ongoing expense of owning a car.” He makes a valid point: renting a basic vehicle or borrowing one from friends or family for a small fee can often be more economical.

Janet Gray, a financial planner, offers a more nuanced perspective on the car ownership debate. She believes the decision should be based on one’s daily or weekly commuting requirements rather than a simple yes-or-no question.

For example, Janet lives in Ottawa, where residing outside the city core often leads to excessively long commutes on public transit. She emphasizes that caregiving and work obligations can significantly influence the decision to own a car.

“You’ve seen parents struggling on transit with strollers, or tired fathers returning home from work lugging multiple bags of groceries. Public transit isn’t a practical option for everyone in those situations,” Gray said. “Additionally, if a job requires constant travel or if a person is caregiving for a parent or child, having a car can be incredibly helpful.”

However, in the absence of such pressing needs, the value of car ownership lessens when you factor in expenses like maintenance, repairs, parking, insurance, gas, and especially the significant depreciation that begins the moment a vehicle is driven off the showroom floor, even if it’s a used car.

In this ongoing debate about the pros and cons of car ownership, Mark proposes a middle-ground solution for those who find it difficult to part with their cars. “If giving up your car feels too extreme, consider a trial period of living without one,” he suggests. He recommends parking the vehicle and using alternative modes of transportation for six months while tracking the costs of renting versus owning a car.

“What it ultimately comes down to is the experience,” says Mark. “Think about the experiences you gain from having a car compared to those you would have without one, and then ask yourself, ‘Is the cost worth it to me?‘”

If your answer is no, and you feel that you’d be happier without the financial burden of maintaining a vehicle, congratulations—you’ve made a wise decision. Now, your only concern is how to manage the extra cash in your monthly budget, which could be hundreds of dollars.

For older individuals, this additional money can help build a nest egg, while younger people might choose to direct these savings into an emergency fund or a tax-free savings account.

No matter where you decide to allocate that extra money, it’s important to give it a specific purpose and remain disciplined. Janet points out, “When people eliminate their car payment, it takes self-discipline to set aside that cash. Otherwise, they might end up expanding their lifestyle—thinking, ‘I’ll go out for dinner four times a week’ or ‘I’ll travel more’—which means they aren’t really saving at all.”