The Canadian Road Quality Rating Guide: Why Your City’s Budget Matters for Your Car Loan

Every spring, Canadian drivers play a high-stakes game of "dodge the pothole." While it feels like a personal annoyance, road quality is actually a major economic factor. If you live in a city that neglects its infrastructure, you are paying a "hidden tax" through rapid vehicle depreciation.

At carrefinancing.ca, we see the data: cars from cities with high-quality roads hold their value better, making them easier to refinance at lower rates. Here is everything you need to know about how Canadian roads are rated and who is leading the pack in 2026.

1. Decoding the Pavement Condition Index (PCI)

Municipalities across Canada use the Pavement Condition Index (PCI) to grade their streets. Understanding these numbers helps you realize when your daily commute is actively devaluing your asset.

• PCI 85–100 (Good): These are the "smooth sails." The road is new or recently resurfaced with no visible distress. Driving here puts minimal stress on your suspension.
• PCI 70–84 (Satisfactory): Minor cracking may be visible, but the ride is still smooth. Your car’s alignment is generally safe here.
• PCI 55–69 (Fair): You’ll notice "alligator cracking" and the beginning of small potholes. This is where accelerated wear and tear on your struts and shocks begins.
• PCI 40–54 (Poor): Frequent potholes and significant rutting. Driving on these roads daily can reduce the lifespan of your tires by 25%.
• PCI 0–39 (Serious/Failed): The road is structurally compromised. These are "rim-breakers" that can cause immediate, expensive damage to your vehicle's frame.

2. The 2026 Pothole Hall of Shame: Cities with the Worst Roads

Based on recent infrastructure reports and driver surveys, these cities are currently struggling with the highest density of "Poor" and "Failed" road ratings.

• Saint John, New Brunswick: A prime example of how climate and industrial traffic collide. Saint John is notorious for deep, recurring potholes that often sit unrepaired for weeks. The freeze-thaw cycles on the coast create "sinkhole-style" pits that are major hazards for low-profile vehicles.
• Hamilton, Ontario: For three years running, Hamilton has dominated the "Worst Roads" lists. Aberdeen Avenue and Barton Street East remain legendary for their bone-jarring conditions, leading to thousands of dollars in alignment claims every year.
• Prince Edward County, Ontario: Despite its beauty, County Road 49 continues to be one of the most distressed stretches of pavement in Canada, plagued by a crumbling concrete base that hasn’t seen a full overhaul in decades.
• Moose Jaw, Saskatchewan: This city frequently sweeps the rankings for the worst roads in the Prairies. The combination of heavy agriculture transport and extreme temperature shifts creates "washboard" road textures that rattle car interiors loose.
• Gatineau, Quebec: Roads like Chemin Pink and Chemin Cook are often cited for severe neglect, representing the broader infrastructure struggle facing many Quebec municipalities.

3. The Smooth List: Cities Investing in Your Car’s Longevity

On the flip side, some cities have prioritized "Asset Management Plans" to keep their PCI scores high, effectively protecting the residents' vehicle equity.

• Calgary, Alberta: Despite the brutal winters, Calgary’s "grind and patch" proactive maintenance is among the best in the country.
• Windsor, Ontario: After years of complaints, Windsor has aggressively moved several major arteries from "Fair" to "Good" through massive infrastructure injections.
• Waterloo, Ontario: Often rated highly for its bridge and culvert maintenance, Waterloo keeps its road network in a state of constant, incremental repair rather than waiting for total failure.

4. How Bad Roads Kill Your Refinancing Chances

Why does a pothole in Saint John matter to a loan officer? It comes down to Residual Value.

• The LTV Trap: When you refinance, we look at your Loan-to-Value (LTV) ratio. If your car has $2,000 in "hidden" road damage (worn ball joints, bent rims, or alignment issues), its trade-in value drops.
• Accelerated Depreciation: Cars driven in high-pothole regions depreciate roughly 5% to 10% faster than those in "Smooth Road" cities. This can leave you "underweight" or "upside down" on your loan, where you owe more than the car is worth.
• Maintenance Records: Savvy buyers and lenders look at the "wear and tear" profile. A car from a city with a high PCI score is perceived as a lower-risk asset.
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5. Protection Strategies for High-Impact Areas

If you live in a city like Saint John or Hamilton, you need a survival plan to protect your vehicle’s equity:

• Monthly Tire Checks: Keep your PSI at the manufacturer’s recommended level. Under-inflated tires provide no "cushion," meaning the metal rim takes the full force of a pothole hit.
• The 10-Day Rule: Most municipalities (especially in Ontario and New Brunswick) require you to file a "Notice of Claim" for road damage within 10 days of the incident. If a pothole breaks your car, document it immediately.
• Annual Underbody Wash: Bad roads trap more salt and grime in their cracks, which then sticks to your car. Professional underbody cleaning prevents the corrosion that "Fair" roads accelerate.