The Cost of Owning a Car in Australia

Editorial Team — 14 February 2022

Australia is the great southern land — and to reach most places a car is essential. There are 20.1 million registered vehicles on the road according to the Australian Bureau of Statistics. Though it’s undeniable that car ownership is not only convenient but the primary way to get around, Australians frequently complain that their cars are ‘cash sinks’ in terms of insurance, registration, repairs, maintenance, and fuel. But how correct is this perception?

As mentioned, there are 20.1 million registered vehicles on the road. The average age of these cars are 10.6 years, an increase over 2020. 71.7% of all cars are petrol driven; followed by 26.4% using diesel, and 1.8% on “other,” presumably electric or hybrid vehicles.

Every state is different, with some states deregulating the Compulsory Third Party insurance, such as New South Wales. Tasmania’s registration system is quite complicated — registration cost is determined by the number of cylinders in the vehicle. Western Australia’s rego is determined by kerb mass, while NT’s rego fee will depend on the number of cylinders and the size of the engine.

In Victoria, registration fees differ depending on proximity to urban centres. Three classifications exist, which attract different fees: Metropolitan ($845.90), Outer metropolitan ($790.90) and Rural ($726). The stated reason for this difference is level of risk, ranging from high to low respectively.  

In NSW, WA, and Tasmania, drivers have the option to choose their Compulsory Third Party insurance provider through the free market. This is commonly known as a ‘green slip.’ In Victoria, CTP is regulated and administered through a government statutory body, the Transport Accident Commission. 

Licence renewal fees
 Licence renewal fees also vary from state to state, particularly if the licence must be renewed at a Road Authority centre (for a new headshot) or online. In South Australia, the issue or renewal fee per year is $48. A one-year renewal in NSW for an unrestricted licence is $60, with discounts for the longer you renew your licence for. Heavy vehicle licences typically cost more — and seniors may need to submit eyesight or competency tests before they are approved for a licence (80 years and above.)

Ongoing costs of transport
 According to the Australian Automobile Association, Australians spend a significant 14.8% of our income on transport costs as a national average – most of which is comprised of car loan repayments ($166.48), fuel ($78.04), and servicing/tyres ($30.13). This all rose sharply since Q4 2020, where total costs rose from $309.92 per week to $367.63 per week. Sydneysiders pay $477.56 per week and 15.5% of their incomes; Melbourne $466.96 per week and 16.4% of their income.

 Insurance in Australia is optional, but in most cases if your vehicle is under finance, it may be a condition of loan approval. Comprehensive insurance covers vehicle theft, collisions, vandalism, hail or other weather damage, and accidents regardless of who is at fault. Many comprehensive policies also include roadside assistance, emergency accommodation, new-for-old replacement, and complimentary car hire. The average insurance cost per household according to the AAA is $25.76 per week, with Melbourne shelling out the most at $34.62. This means the average annual premium is $1,340. Of course, if you do get into an accident and make a claim, you will have to pay an excess, which is between $600-$800 on average.

Servicing and maintenance
 According to the AAA, servicing and maintenance takes up about 8.2% of yearly transport costs in Australia, averaging out to $1,567 per year — a $12 increase since Q2 2021. The most expensive place to get your car serviced is Canberra, setting you back an average of $2,083. 

Toll Roads
 Only three states operate toll roads: New South Wales, Queensland, and Victoria. As for how much these cost on average, Sydney was the most expensive at $88.24 a week, followed by Melbourne at $54.80 and Brisbane at $53.58 (all on average.)

Car loan repayments
 AAA statistics say that that the average car loan repayment per year is $8,653 over all of Australia — the interesting statistic is that the difference between highest and lowest is only $118 – $8,721 in Perth and $8,603 in Darwin. Savvy Managing Director Bill Tsouvalas says this hews closely with the average spend on cars, and where tastes are heading in terms of the marketplace. “If we extrapolate these numbers to a standard five-year loan, this gives us $43,265. The average spend on a new car in Australia is about $40,729. We arrive at this figure because of the appetite for SUVs in Australia. In our last report, we found that for every standard car sold, four SUVs are driven off the lot.”

Increasing prices due to inflation, COVID-19, supply chain issues
 Ongoing issues with the COVID-19 pandemic such as industry shutdowns and the global semi-conductor shortage have led to an increase in prices, with used car prices soaring up 37% above the pre-pandemic high in February 2020.

Since many remain reluctant to take public transport amid ongoing COVID-19 infections, demand for new cars have also skyrocketed. According to the ABC, there’s been a 68% increase in new car sales since last year. However, a report by the Federal Chamber of Automotive Industries found that car sales in November 2021 dropped 15.3% over the previous year, as the supply shortage started to bite into consumer sentiment.


Car ownership Budgeting