Turo Finds Car Ownership Falling as Inflation Rises

More Canadians are concerned about the monetary pressures of car ownership because of high inflation and cost-of-living increases, finds the second annual Car Ownership Index from Turo in partnership with Leger.

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. The 2023 survey reveals financial motivators and economic swings have had a strong influence on consumers' approaches to car ownership.

Key findings of the 2023 Index revealed:

• 39% of respondents reported being less likely to buy or lease a vehicle this year because of recent rates of inflation.
• 55% of those surveyed who own or lease a vehicle, but are planning to stop in the future, cited high costs as their main reason.
• 24% of Canadians surveyed cited monthly payments as the primary motivator for ending car ownership, which is double the 2021 report figure.

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

• 55% of car owners surveyed who work agree they would have to change jobs if they did not have a car.
• 31% cite convenience as the reason for owning a car
• 20% cite the desire for freedom for owning a car

"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 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."

Economic challenges are contributing to the growth in carsharing in Canada, the survey found.

Since Turo's inaugural Car Ownership Index, the use of carsharing services among respondents has increased from 7% to 9%, indicating an upward trajectory in adoption. Over one in 10 car owners surveyed (11%) are open to listing their owned car on a sharing marketplace. In line with Canadians' focus on monetary pressures this year, most of these respondents are drawn to the financial benefits of carsharing. When confirming their primary motivations, 35% cited additional income, and 28% noted offsetting the cost of car ownership or leasing.

"By regularly sharing their otherwise underutilized vehicle on Turo, our hosts earn hundreds of dollars in additional income per month, on average, which improves vehicle affordability. This also supports the development of a more efficient system that allows for fewer cars on the road, accessed by more people," said Mathieu.

The survey also took a closer look at electric vehicle ownership.

It found 26% of those interested in buying or leasing EVs are motivated to choose a better car for the planet, while 38% reported being driven by a desire to save money on gas. Meanwhile, 31% of those surveyed 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%) plan to buy a hybrid or electric vehicle. For Quebecers, who are the most eager to adopt EVs, this figure jumps to 64%.

The survey found extended test drives offer an attractive opportunity to convert interest into adoption. Most respondents (54%) said they would be more comfortable buying an EV if they could test drive one for a few days or weeks before deciding to purchase it.

"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.

"Canadians' lack of experience with EVs remains a strong barrier to adoption and, given the continued interest in extended test drives from our initial index into this year, we believe increased exposure to EVs may accelerate ownership in Canada," said Mathieu.