The monthly payment is the primary among the two significant factors when deciding from a cost perspective: the car payment and the insurance cost. Most of the time, customers focus on it as insurance payments are way beyond their control, making it the most sensitive aspect of their purchase decision.

The following graphic shows the average monthly payment before taxes vs the vehicle make between 2016 and 2020:

Figure 1: 2016-2020 Average monthly payment among all vehicle brands in Canada. The list includes High-end vehicles (BMW, Mercedes-Benz, Audi, Acura, Mini, Infiniti, Lexus, Cadillac, Buick, Volvo, Land Rover, Lincoln, Jaguar & Porsche) and popular ones (Toyota, Honda, Volkswagen, Mazda, Ford, Nissan, Subaru, Hyundai, Chevrolet, Kia, Dodge, Jeep, GMC, Mitsubishi & Chrysler)

• The average monthly car payment before taxes is at about CA$456. For high-end vehicles, it is about CA$699 (see Figure 6), while for popular brands, it averages at CA$403 per month (see Figure 2).
• GMC, Ford and Dodge rank above average due to the volume of pickup trucks that tend to have an above-average MSRP. (see Figure 2)
• Jeep and Subaru rank above average mainly because of the high proportion of SUV and All-Wheel-Drive vehicles in the inventories, which tend to have an above-average MSRP. (see Figure 2)
• The specific case of Fiat is due to the “low-cost” Fiat 500 model, although not too popular as the other bottom brands are. (see Figure 2)

Figure 2: 2016-2020 Average monthly payment among most popular vehicle brands in Canada: Toyota, Honda, Volkswagen, Mazda, Ford, Nissan, Subaru, Hyundai, Chevrolet, Kia, Dodge, Jeep, GMC, Mitsubishi & Chrysler. 

• On average most consumers that lease vehicles among the most popular brands pay between CA$ 370 - 425 per month before taxes. (see Figure 2) 

• For brands like Volkswagen, Chevrolet, Nissan, Honda, Mazda, Kia, Toyota & Hyundai, the price difference does not make much of a critical decision pivot point as these are all marginally close. (see Figure 2)

Figure 3: Average monthly payment over time for most popular vehicle brands in Canada: Toyota, Honda, Volkswagen, Mazda, Nissan, Subaru, Hyundai, Kia, Jeep, Mitsubishi & Chrysler. (excluding the top pickup brands)

Figure 4: Average monthly payment over time for most popular vehicle brands that include the top-selling pickup trucks in Canada: Ford, Dodge, Chevrolet & GMC. 

Figure 5: Average monthly payment over time for most popular vehicle brands in Canada for payments under CA$400/month: Toyota, Honda, Volkswagen, Mazda, Nissan, Subaru, Hyundai, Kia, Jeep, Mitsubishi & Chrysler. (excluding the top pickup brands)

• The average monthly cost of leasing a car/SUV with the most popular brands has increased 26% over the past 15 years, slightly under the 28.5% inflation during the same period. (see Figure 5)
• On average most consumers that lease vehicles for monthly payments under CA$ 400/month, among the most popular brands, pay between CA$ 325 - 347 per month before taxes (about 336 per month). (see Figure 5)
• In the specific case of BMW, Audi, Mercedes, Volvo, Lexus, Lincoln & Infiniti, the average price ranges between CA$680 - 780 per month, which is slightly irrelevant from a cost perspective. (see Figure 6)
• The average monthly cost of leasing a high-end vehicle has increased 21% over the past 15 years, slightly under the 28.5% inflation during the same period of time and less than the popular vehicles increase. (see Figure 6)

Figure 6: 2016-2020 Average monthly payment for high-end vehicle brands in Canada: BMW, Mercedes-Benz, Audi, Acura, Mini, Infiniti, Lexus, Cadillac, Buick, Volvo, Land Rover, Lincoln, Jaguar & Porsche.

Figure 7: Average monthly payment over time for high-end vehicle brands in Canada: BMW, Mercedes-Benz, Audi, Acura, Mini, Infiniti, Lexus, Cadillac, Buick, Volvo, Land Rover, Lincoln, Jaguar & Porsche.

Implications

• Monthly/bi-weekly/weekly payments move together with inflation, so customers who pay now CA$ 336 are expected to be paying about 370 per month by 2025 and 410 by 2030, assuming inflation rates remain average to the past two decades. For high-end vehicles, today’s price is CA$ 699, then CA$ 771 by 2025 and CA$ 852 by 2030.
• Right now, a monthly payment above CA$ 300/month and under 350 is what most customers understand as “acceptable” or “average”.
• Upper trim models are respectively understood to be more expensive and to stand at an above-average pricing structure. 

This article is part of the 2021 Study done by LeaseCosts Canada Inc. that included over 23,000 lease contracts from all over Canada.