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The Costs Of Owning A Car: A Guide

Rachel Horan

Rachel Horan

May 19, 20218 minute read
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While the purchase price is the most expensive cost of owning a car, there are also other expenses involved. From registration to insurance and servicing, there are a lot of factors that go into running a car.

If you’re planning on buying a car, whether it’s brand new or used, here’s a handy guide of what costs you need to know about.

Purchase price

Before we get into the nitty-gritty, let’s give a quick rundown of the average purchase price of small, medium, and large cars.

According to a survey conducted by Canstar Blue:

  • The average cost of small cars is $27,092;
  • Medium cars, also known as sedans, cost on average $37,846;
  • Large cars (SUVs), on average, cost $41,697.


Prices can also vary depending on the brand. For example, the average car cost of a Suzuki is $19,032, while the average price for an Audi is $80,975.

Car loan

It can be expensive to purchase a car outright. If you’re in need of car financing, the most common option is a car loan. There are two main types of car loans: new car loans and used car loans.


The factors that can influence the cost of a car loan can include:

  • The cost of the car (how much you borrow);
  • How long the loan term is;
  • The interest rate charged on the loan.

What other costs are associated with running a car?

Alongside the purchase price, there are other main costs associated with the general operation of a car. These include petrol, servicing and repairs, registration, tyres, and car insurance.

Petrol

In Australia, there are three main types of petrol available: Unleaded 91, Premium Unleaded 95, and Premium Unleaded 98. The average prices of each type of fuel is outlined below:

Petrol Type Price (High) Price (Low)
Unleaded 91 165 cents per litre 120 cents per litre
Premium Unleaded 95 182 cents per litre 136 cents per litre
Premium Unleaded 98 188 cents per litre 144 cents per litre

In addition, some cars can take E10, Diesel, or Premium Diesel. However, these figures are more difficult to track. E10 can vary from 122 cents per litre to 155 cents per litre, while the national average price for Diesel is 127 cents per litre. The national average for Premium Diesel is 89 cents per litre.

Servicing and repairs

There are a range of factors that influence the price of a service on your vehicle. This includes the car’s make and model, mileage, the mechanic you use, and the type of service required. Typically, you can be expected to pay anywhere from $185 to $2,225 for general car servicing.

To give an idea of when servicing might be more expensive, these are considered to be major services (which can be more expensive):

  • 60,000km;
  • 120,000km;
  • 180,000km;
  • 240,000km;
  • 300,000km;
  • 360,000km.

Repairs are another cost that most drivers will need to consider. Whether you accidentally knocked off a side view mirror, scratched your car, or someone hit the side door, fixing your car can be costly. However, on average, you can expect an auto-repair bill to be around $500 to $600.

Registration

Another major cost associated with owning a car is registration. However, the cost to register your car will vary by state or territory.

To give you a general idea of how much it might cost you, we’ve outlined below the prices for a twelve-month registration period for each state:

State or Territory Registration Costs
Queensland bases their registration costs on the amount of cylinders the vehicle has. Vehicle 1, 2, 3 cylinders, electric or steam – $673

Vehicle 4 cylinders – $744.45

Vehicle 5 or 6 cylinders – $939.60

New South Wales bases their registration on the price and weight of the vehicle. Registering a brand new vehicle worth $20,000 can cost:

Small (975kg) – $933

Medium (976kg to 1154kg) – $968

Large (1155kg to 1504kg) – $1,024

Victoria calculates their registration fees based on what area the person operating the vehicle lives. Metropolitan area (high risk) – $834.80

Outer metropolitan (medium risk) – $779.80

Rural (low risk) – $716

Tasmania also bases registration fees on the amount of cylinders the vehicle has. 3 cylinders – $$557.52

4 cylinders – $577.52

5 and 6 cylinders – $610.52

South Australia considers both the cylinders and location of the vehicle. It is difficult to calculate the registration costs in South Australia, but an example is given. 4 cylinder in “District One” (high risk) – $646.06

4 cylinder in “District Two” – $526.39

Western Australia charges registration based on the weight of the vehicle. They divide vehicles into “lightweight” and “heavyweight” and the registration is entirely dependent on the individual car. Suzuki Swift (lightweight) – $202.12

Holden Commodore (heavyweight) – $349.16

Additional cost: Motor Injury Insurance (mandatory) – $442.24

Northern Territory considers a number of factors, including the registration, insurance and admin fees. Registration is not only based on cylinders, but the size of the engine. 4 cylinder car with 900cc engine – $661.10

4 cylinder car with 2600cc engine – $762.10

6 cylinder car with 2600cc engine – $813.10

8 cylinder car with 5700 cc – $1,140

Australian Capital Territory doesn’t provide much general information on their pricing, but is considered the most expensive place in Australia for car registration. The average registration cost is $1,140 (without factors of cylinders, location or any other information so pricing will vary).

Please note, the information shown in the above table reflects the current rates of each state or territory and may change over time.

Tyres

The cost of tyres will vary depending on the brand, size, and quality of the vehicle. The cheapest tyres available are around $80, but tyres can be up to $700 each.

Generally, tyres only need to be replaced every two to three years, depending on how you treat them. It’s important to note that you may need to purchase four tyres, for example, $80 x 4 = $320. If you require $700 tyres, it can be a significant car cost.

Brand

The brand of tyre will influence its price. Well-known brands typically cost more and tend to be of a higher quality.

Size

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.

Quality

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 which come with a larger price tag.

Car insurance

One of the major costs of car ownership is car insurance. There are four main categories of car insurance in Australia:

  • Compulsory Third Party (CTP)
  • Third Party Property Damage
  • Third Party Fire and Theft Cover
  • Comprehensive Car Insurance

Each of these types of insurance will come with a different price tag. The price of car insurance can also vary by age, as younger people (under 25s) will have to pay more for car insurance.

According to Mozo, these are the average costs of car insurance by age nationwide.

Age Car Insurance Quote
20 and under $2,061
21 to 24 $1,328
25 to 29 $1,284
30 to 39 $1,152
40 to 49 $1,018
50 to 59 $895
60 to 69 $797
70 and over $885

Keep in mind that these prices are without factoring in the type of insurance, state of residence, or any other contributing factors like past accidents. However, it can give some helpful insight into how much you can expect to pay for car insurance.

Stamp duty

Vehicle stamp duty is a tax that you must pay when you purchase 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. Additionally, links to the stamp duty calculators for each state are provided.

State or Territory Stamp Duty Cost
Australian Capital Territory Determined by the vehicle’s price and its Federal government Green Vehicle rating.
New South Wales Based on either the price of the vehicle or its market value.
Queensland Calculated based on the engine type, the number of cylinders and the purchase price.
South Australia Based on the purchase price.
Northern Territory Calculated at a rate of three per cent of the dutiable value of the vehicle plus a $17 transfer of ownership fee.
Tasmania Based on a sliding scale based on the value of the vehicle.
Victoria Whether the vehicle is new or used, passenger-carrying or not is used in the stamp duty calculation.
Western Australia In Western Australia, calculating stamp duty is based on a variety of factors. It is best to use the calculator provided.

A case study

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 25 years old and purchased her first car, a brand new Suzuki Swift, for $21,490. She lives in Queensland and drives her car to work everyday, 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.

  • Petrol: Her car requires 95 Petrol and has done 20,000km. A Suzuki Swift uses 4.8L of petrol per 100km. If she did 20,000km, that means that she needed 960L of petrol. If she purchased this petrol for, on average, $1.59 per litre, she needed to pay $1,526.40 for petrol.
  • Car Service: Since her car is under warranty for five years, she gets capped-price servicing. So, for her first year, she only has to pay $295 for her car service.
  • Registration: Her Swift is a 4 cylinder car and she lives in Queensland, so she has to pay $744.45 for vehicle registration.
  • Tyres: She has to replace one tyre. She purchases an $85 tyre from Jax Tyres.
  • Stamp Duty: She had to pay stamp duty of $645.
  • Car Insurance: Finally, she had to pay for her car insurance. Since she is only 25, she had to pay $1,284 for her insurance.


Adding up all of these costs, excluding the initial purchase price of her car, Amanda had to pay a total of $4,579.85 to run her car for one year. Add in the initial purchase price and that’s a total of $26,069.85.

A final note

Overall, the cost of running a car is dependent on your individual circumstances. The type of car, age, gender, and where you live are contributing factors in how much it costs to run your car. However, by knowing how much your car may cost you, you can budget accordingly and enjoy the freedom that comes with owning a car.


Copyright © www.jacarandafinance.com.au Jacaranda Finance Pty Ltd ® ABN 53 162 078 195 Australian Credit Licence 456 404, Pawnbroking License Number 4221738. The information on this web-page is general information and does not take into account your objectives, financial situation or needs. Information provided on this website is general in nature and does not constitute financial advice.


Rachel Horan
Rachel Horan

Written by Rachel Horan

Rachel Horan is a Content Writer for Jacaranda Finance. Rachel has previously produced content for Brisbane City Council, Black & White Cabs, and Clubs Queensland. She has a Bachelor of Mass Communication with Distinction from the Queensland University of Technology.

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