Buying a car is one thing. Running a car is another. While the purchase price is often the most expensive cost of owning a car, the expenses don’t stop there. Read more to find out what the average cost of owning a car in Australia is.
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The national average annual cost of owning a car in 2025 is $23,389 per year, or $430.50 per week, based on data from the Australian Automobile Association's (AAA) Transport Affordability Index for the March 2025 quarter (and taking out public transport costs included in the index). That’s around 15% of household income!
While that might seem like a decent sum, it was actually an improvement in transport affordability in relation to incomes compared to the previous quarter.. Specifically, the AAA found the proportion of income that typical households spent on transport fell nationally in the March quarter and in all benchmark locations, except Canberra and Bunbury.
Still, according to AAA, typical households now spend significantly higher portions of their incomes on transport costs than before COVID. In Q4 2019, the typical Australian household spent just 13.9% of its income on transport. But in Q3 2022, this proportion rose to 14.9%, and it peaked at 17% in the June quarter of 2024.
Before we get into the nitty-gritty of running a car, let’s have a quick look at how much a car purchase will set you back.
New car prices in Australia continue to climb, with the average cost now starting around $35,000 (According to PopCar). Recent data from Cox Automotive suggests that the average price of a new car in 2025 could be as high as $47,462. Even used cars often sit between $10,000 and $25,000.
According to a survey of 1,500 new car owners conducted by Canstar Blue in September of 2023, Aussies spend an average of $37,362 on new cars.
That survey also found:
Interestingly, Queenslanders are likely to spend the most on average for a new car at $39,730.
| State | Average car cost |
|---|---|
| Tasmania | $33,520 |
| South Australia | $36,233 |
| Queensland | $39,730 |
| Victoria | $37,346 |
| New South Wales | $36,687 |
| Western Australia | $37,647 |
*Excluding Northern Territory
Alongside the purchase price, several other main costs are associated with owning and running a car. These include petrol, servicing and tyres, registration, CTP and licensing, insurance, roadside assist and tolls.
According to the Australian Automobile Association (AAA), the average Australian car requires just over $23,300 yearly including loan repayments to cover these costs.
In Australia, there are three main types of petrol available: Unleaded 91, Premium Unleaded 95, and Premium Unleaded 98; as well as E10 fuel, Diesel, or Premium Diesel.
According to the ACCC, in the March quarter of 2025, average retail petrol prices across the five largest Australian cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) were 182.2 cents per litre (cpl), an increase of 2.4 cpl from the previous quarter.
The average Australian household is spending $94.95 per week on fuel, according to the Australian Automobile Association's (AAA) Transport Affordability Index for the March 2025 quarter, a cost accounting for more than 21% of their weekly car expenditure. That’s nearly $5000 per year. The cost of petrol rose by more than $3 per week from the previous quarter, according to AAA.
Here’s how much the typical household spends on petrol in a year as of Q1 2025, according to the AAA:
| Average Annual Cost | Change (from Q4 2024) | |
|---|---|---|
| Average Capital City | $4,854.66 | +128.70 |
| Average Regional Centre | $5,032.19 | +194.04 |
| Highest – Canberra | $5,072.60 | +249.60 |
| Lowest – Adelaide | $4,660.08 | +24.44 |
Read More: 6 Steps to Save on Fuel
According to AAA’s report, the average annual cost for servicing and tyres is $35.15 per week or $1,828 per year, or around 8% of yearly transport costs.
To give an idea of when servicing might be more expensive, these mileage milestones are considered to be major services (which can be more expensive):
Sometimes, you might need to pay for repairs outside of insurance, especially if you don’t have comprehensive coverage. These repairs can sometimes cost thousands of dollars, in which case you may want to consider a personal loan from Jacaranda Finance.
Cars typically have a very high rate of depreciation. This means that, from the time of purchase, their value decreases substantially each year. A good rule of thumb is taking 10-15% off your car’s value the minute you drive it from the dealership!
Another significant cost of owning a car is licensing, the vehicle's registration and CTP. Combined these services will cost an average of $1,766.77 annually in Australia, or about $32 weekly, according to AAA. This equates to around 7% of the yearly cost of having a car.
The cost to register your car in 2025 varies by state or territory:
You must apply for an Australian driver’s licence if this is your first time driving. Alternatively, your current driver’s licence may need to be renewed around the same time you buy a car.
The application and renewal processes in Australia can cost hundreds of dollars alone. Each state has different renewal fees, so you must check which are relevant to you.
As an example, here’s what it costs in July 2025 to renew your licence in our three biggest states:
| NSW | VIC | QLD | |
|---|---|---|---|
| 3-year renewal | $168 | $94 | $157.95 |
| 5-year renewal | $228 | N/A | $205.05 |
| 10-year renewal | $422 | $321.90 | N/A |
The cost of tyres will vary depending on the brand, size, and quality of the vehicle. The lowest tyres cost may be around $80, but tyres can be up to $800+ each.
Generally, tyres only need to be replaced every few years, depending on how well you treat them and whether you regularly service your car. It’s important to note that you may need to purchase four tyres, meaning the cost of each tyre will be multiplied by four (e.g. $80 x 4 = $320). If you require $700 tyres, these can be a significant car cost.
Different costs are associated with tyres, like brand, size and quality.
The brand of the tyre will influence its price. Well-known brands typically cost more but tend to be of a higher quality.
Your tyres need to fit the rim of your car, with larger tyres being more expensive. So, if you have a larger car, you will likely need to pay more for tyres.
You can buy lower quality tyres for cheaper, but with that comes a risk that they will wear faster. Tyre quality ranges as heavier cars and racing cars require specialised tyres with a larger price tag.
Read More: The Average Cost of Replacing Tyres
While not everyone will use toll roads – roads that require the car owner to pay a fee to use them – the average weekly cost for most households is $7.38 according to the AAA Transport Affordability Index for the March quarter 2025. This is just under 2% of all costs. This will really only apply in capital cities as regional areas don’t tend to have toll roads.
You can try to get away without having roadside assist, and some new cars even come with roadside assist for a few years, but the older your car is, the more important it will be. That is, if you don’t want to get stuck broken down somewhere!
According to AAA, roadside assist typically costs $2.45 per week, or just 0.5% of all costs. At that price, it seems worth having it!
In Australia, your car needs to have Compulsory Third Party (CTP) insurance. This covers personal injuries to both yourself and others in the event of an accident.
In Victoria, Tasmania, South Australia and Western Australia, CTP is included in your annual registration fee. However, Queensland and New South Wales drivers need to pay for CTP separately from their registration.
Third-party car insurance (property damage or property, fire and theft) is a car insurance policy offered to drivers. In the event of an accident, this insurance will cover you for damages caused to other vehicles, but it won’t cover your own expenses if your vehicle is damaged.
Finder also found the average annual cost of third-party insurance is $522 per year as of January 2025.You won’t need to pay this separately to comprehensive car insurance premiums if you have a comprehensive policy.
Comprehensive car insurance is the most popular type of vehicle insurance. In the event of an accident, comprehensive insurance covers your vehicle damages and other involved vehicles. This is the most secure type of insurance, as it has the lowest out-of-pocket expense if you do have an accident.
The cost of insurance varies from person to person. On average, annual comprehensive insurance can cost over $2,637 in capital cities and $2,282 in regional areas. As a result, it accounts for more than 10% of car costs, according to the AAA report.
Despite these costs, many car owners don’t shop around when buying insurance, meaning they usually lose out on big savings.
Factors that influence insurance premiums include:
Vehicle stamp duty is a tax you must pay when purchasing a car. It can vary greatly between states and territories.
Below, we’ve listed the factors that go into calculating the cost of stamp duty to get an idea of how much it might cost you:
| State or Territory | Factors involved in stamp duty cost |
|---|---|
| Australian Capital Territory | Vehicle’s price and its Federal Government Green Vehicle rating |
| New South Wales | Purchase price of the vehicle |
| Queensland | Vehicle type, motor type and vehicle value |
| South Australia | Purchase price of the vehicle |
| Northern Territory | Dutiable value (sale price plus accessories and on-road costs) |
| Tasmania | Market value or consideration paid (whichever is greater) and vehicle type |
| Victoria | Dutiable value (the greater of either vehicle’s total purchase price or market value) |
| Western Australia | Dutiable value (incurring a rate) and vehicle weight. |
If you’ve taken out a loan for your vehicle, you need to factor in regular car loan repayments, which can be a significant expense for years. According to Finder, around 12% of Australians had a car loan in July 2024. That’s approximately 2.5 million people!
AAA’s index shows the average household spends more than $210 per week or $10,920 per year on car loan repayments, enough to make them the single most significant ongoing car expense, at 47% of total costs.
| City | Average Annual Car Loan Repayment |
|---|---|
| Perth | $11,111.36 |
| Sydney | $10,996.44 |
| Melbourne | $10,971.48 |
| Canberra | $10,962.64 |
| Adelaide | $10,908.04 |
| Darwin | $10,876.32 |
| Brisbane | $10,832.12 |
| Hobart | $10,909.08 |
Check Out Our Calculator to Estimate What Your Car Loan Repayments Might Be!
Taking into account all the factors we’ve discussed so far, let’s use an example to show how much a person might pay to run their car for one year.
Amanda is 26 years old and purchased her first car, a brand-new Suzuki Swift, for $25,150. She borrowed $15,000 with a fixed-rate car loan over 25 months and spent the remaining $10,000 as a deposit.
She lives in Queensland and drives her car daily to work, racking up 20,000km in one year. Her car takes 95 Petrol, and she drove into a pothole on her way to work one day, so she had to get a tyre replaced.
Let’s work this out!
After adding up all of these expenses and her car loan repayments, Amanda’s total annual car ownership costs are over $17,000.
Read More: The Cheapest Cars to Run
Taking the expenses outlined above into consideration, it’s clear to see that owning a new car can become quite expensive. As the purchase price is their most considerable expense, many people choose not to purchase outright and instead opt for a car loan and repay it in instalments.
That’s where we come in!
Jacaranda Finance offers fast online car loans for up to $30,000 with loan terms of up to 48 months. By applying for an online car loan with Jacaranda Finance, you could receive pre-approval for funding on the same day2, helping you get on the road on your terms.
Apply online or via our Better Credit app today!
$3,000 - $25,000
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