How much it really costs to own a car in Australia

Besides the purchase price of a car, there are really six main costs that can influence how much your car will truly cost you. So, buckle your seatbelts and read on to see a break-down of how much the average Aussie driver can expect to spend on these things each year. 

Below is a breakdown of the weekly average cost of running a car, based on data from the Australian Automobile Association's (AAA) December 2022 Transport Affordability Index.

Cost breakdown	Estimated cost ($)
1. Fuel	$98.31
2. Car loan costs	$155.96
3. Car insurance	$31.67
4. Maintenance & service	$31.48
5. Registration & licensing	$30.17
Total	$347.59

Ongoing costs of car ownership

1. Fuel

Fuel is almost certainly the car expense you’ll pay for the most regularly. The mere act of using your car is drying up the fuel tank, and most people would fill up their cars every couple of weeks or so. A report by the Australian Competition and Consumer Commission (ACCC) found that the average petrol prices in our five biggest cities sat at around $1.77 per litre in the September 2022 quarter. Whereas the year prior, average petrol prices sat at $1.52 per litre.

The AAA reported the average two-car Australian household (two adults, two children) pays $98.31 for fuel every week. That amounts to over $5,100 per year!

City	Weekly cost of fuel	Rank
Hobart	$98.72	1
Darwin	$97.13	2
Canberra	$96.67	3
Sydney	$96.59	4
Melbourne	$96.42	5
Brisbane	$96.26	6
Perth	$93.65	7
Adelaide	$93.32	8
Capital Average	$96.10

Source: AAA Transport Affordability Index

Savings tip: There’s no shortage of smartphone apps that help you identify where the cheapest fuel is near you (there can be a variation of as much as 20 cents in different stations!). Check out apps like PetrolSpy, GasBuddy, Fuel Map and MotorMouth.

2. Car loan costs

Car loans are probably the next-most frequently-occurring cost of car ownership, often being paid out weekly.

According to AAA data, there isn’t much of a difference in car loan payments between cities assuming the same interest rate, and there’s almost no difference in weekly costs between capital cities and regional cities or towns. This is because car loan interest rates aren’t really determined based on the city someone lives in, although it can have a slight effect. Instead, car loan rates tend to be influenced by:

• The age of the car and what make/model the car is: older cars can come with higher rates since they’re considered a greater risk to the lender 
• Your credit history: lenders often have different interest rates for people in different credit score bands 
• Your financial status: factors like your current income, other loans or credit you might be paying off and your spending habits have a big influence on your potential interest rate
• The lender itself: you’ll find certain lenders are able to offer lower car loan interest rates than others 

Based on the average weekly cost of the eight capital cities, car loan repayments can cost an average of more than $8,100 a year. 

City	Weekly car loan payments	Rank
Perth	$157.18	1
Sydney	$157.03	2
Melbourne	$156.12	3
Hobart	$155.60	4
Canberra	$155.52	5
Adelaide	$155.48	6
Darwin	$155.37	7
Brisbane	$155.16	8
Capital Average	$155.93

Savings tip: there are plenty of different car loan products out there and interest rates can vary significantly. Getting a car loan with a good interest rate can help you pay less than that average figure.

In the market for a new car? The table below features car loans with some of the lowest fixed and variable interest rates on the market.

Important Information and Comparison Rate Warning

3. Car insurance

Car insurance is a necessity in Australia, and in the case of CTP car insurance, it’s actually compulsory. CTP car insurance is designed to cover you for the liability costs of causing injury or death to other people, but a higher level of insurance coverage is highly recommended. These higher levels are:

• Third-party car insurance (cover for damage to other people’s property)
• Third-party fire and theft car insurance (same as above plus fire and theft protection for your car) 
• Comprehensive car insurance (highest level of cover – all of the above plus coverage for damage you’re on the receiving end of)   

The cost of a car insurance premium varies based on:

• Your car
• Your age
• Your driving history 
• Your gender (males pay more due to their less than stellar record on the road) 
• Your suburb
• And many other things, such as how far you travel, where you keep the car overnight and even the colour of your car. 

Australia’s car insurance market is very competitive, so it often pays to take advantage of that by shopping around and getting quotes from different providers each year when it comes time to renew your policy. According to AAA’s data on the average weekly household costs of comprehensive car insurance for both new and used cars, a typical Perth household spends around $950 a year on comprehensive insurance costs while those in Adelaide spend over $2,200. That's quite a big jump...

City	Weekly cost of comprehensive car insurance	Rank
Adelaide	$43.38	1
Melbourne	$42.51	2
Darwin	$40.43	3
Brisbane	$40.11	4
Sydney	$35.34	5
Canberra	$28.95	6
Hobart	$24.73	7
Perth	$18.29	8
Capital Average	$34.22

Based on this data, the average Joe or Jane’s annual comprehensive insurance premium would be about $1,779. This is over $220 more than the previous year.

Savings tip: Shopping around each renewal could also save you hundreds since many providers increase premiums year-on-year by default. Australians pay about $3.6 billion every year in ‘loyalty taxes’ due to staying with their current insurers. 

4. Maintenance costs and servicing

Services and repairs are a significant hidden cost of car ownership. You’ll need to get a regular service done if you want your car to remain functional, and you never really know when you might blow a tyre or have your air conditioner start spewing toxic fumes. Servicing your car can be expensive, but fortunately, many new cars come with ‘capped price servicing’, which puts a ceiling on the cost of your services for a period of time. 

The costs of maintaining your car will vary quite a lot as there are so many different things that can go wrong with it. Including tyre replacements, AAA found the average household paid $31.48 each week, or $1,637 each year. The difference here between the cheapest and most expensive capital city is $825 a year, while the typical household in the most expensive regional area (Bunbury) pays $621more. 

City	Weekly cost of maintenance and servicing	Rank
Canberra	$42.02	1
Perth	$33.79	2
Melbourne	$33.59	3
Sydney	$33.06	4
Darwin	$32.78	5
Hobart	$30.69	6
Brisbane	$26.38	7
Adelaide	$26.15	8
Capital Average	$32.31

Savings tip: Using local mechanics can be cheaper than an official dealership while doing just as good a job. You can check they’re credible by reading online reviews of them. It also pays to know that servicing can be more expensive once your car’s odometer reaches a certain number of kms. The highest-priced services tend to arrive at every 60,000 kilometres, although it can depend on the car. 

5. Registration & licensing

Any car driven on a public road must be registered with your state or territory’s Department of Transport and driven by a licensed driver. Registration will typically cost you an upfront registration fee as well as an ongoing annual or semi-annual fee while you’ll need to pay to have your driver’s licence renewed every few years. Often included in the cost of registration is the CTP (compulsory third party) car insurance premium.  

According to AAA’s report, the average annual cost of registration, CTP and licensing for a two-car Australian family is $1,606 in capital cities and $1,527 in regional areas.

These costs vary significantly from city to city. For example, there’s a $916 difference between what a typical Hobart household pays for registration and licensing each year and what a Canberra household pays. 

City	Weekly registration, CTP & license fees	Rank
Canberra	$40.74	1
Perth	$34.66	2
Melbourne	$34.07	3
Darwin	$31.55	4
Brisbane	$31.23	5
Adelaide	$27.51	6
Sydney	$24.17	7
Hobart	$23.12	8
Capital Average	$30.88

Savings tip: You’ll have the option of paying your registration either annually, semi-annually and sometimes quarterly. You can save a fair bit of cash by paying for the annual option and getting it out of the way for another year. Of course, you’d need to consider whether you intend to own the car for another year.  

6. Depreciation

As a general rule, cars are a terrible investment, at least in a financial sense. The instant you drive off from the dealership in a brand new car, that asset’s value has fallen as much as 10%, and it only gets lower from there. All cars depreciate over time, and some do faster than others, so by the time you try to sell yours, you could have lost thousands. 

No matter which make or model you’re interested in, there’s a simple formula to calculate a car’s approximate depreciation. You can use Redbook or similar sites as a guide for your vehicle’s current value. Here’s the easy formula:

1. Find the difference between the new car value and its value today

2. Divide that difference by the new-car value, then multiply by 100

As an example:

1. $35,880 (new-car value) - $23,700 (car’s current value) = $12,180

2. $12,180 divided by $35,880 x 100 = 33.94% (that’s the depreciation rate)

Savings tip: You can reduce how much your car depreciates by if you regularly service your car, keep it well maintained and cleaned and store it in a garage to minimise environmental wear-and-tear. 

How much does this all cost in total?

A lot. All of these costs can seriously add up, and unfortunately, there’s no real way to avoid them. By owning and driving a car you have to commit to paying for fuel, registration and servicing, while depreciation is sadly a given no matter how often you lovingly wash it. 

RACQ's 2022 Running Costs Report revealed the average running costs for each type of vehicle in Queensland. The results are not particularly pretty. 

Vehicle category	Average monthly cost	Average annual cost
Light cars	$841.38	$10,096.56
Small cars	$1,038.65	$12,463.75
Medium cars	$1,317.17	$15,806.05
People movers	$1,575.15	$18,901.80
Electric	$1,465.73	$17,588.72
SUV small	$994.50	$11,934.05
SUV medium	$1,309.40	$15,712.76
SUV large	$1,572.26	$18,867.17
Terrain	$1,927.35	$23,128.19
Light commercial 4x2	$1,413.39	$16,960.69
Light commercial 4x4	$1,634.25	$19,611.02

So the mere act of owning your car can cost you well over $10,000 a year – that’s in addition to the cost of actually buying the car. But you can see above that there can be a big difference in annual costs for different types of vehicles. If you’re a fan of substance over style, then it’s well worth your time to look around for cars with cheap servicing and low-fuel use.

Rent a car?

If this has put you off buying a car, you could consider renting one. Ridesharing services like GoGet allow you to book cars to use for a specified period of time.

Let’s take the Toyota Yaris for example. Its listed price is currently around $27,000, and according to the RACQ, its average annual running costs including all of the above ends up at around $10,100, or $194 weekly. Comparatively, renting the same car from GoGet for 10 hours a week on the GoFrequent Plan will cost you roughly $169 a week (minus the insurance excess), based on:

• $30 a month fee ($6.92 weekly) 
• $76 for 10 hours rental 
• $87 for the 120km worth of fuel 
• $0.44 per kilometer travelled 

This service only has a few select cars though, but there are other ones like Uber Carshare (previously known as Car Next Door) that let you borrow from people who are willing to rent out their own personal cars, while services like Popcar and Carbar operate as car subscription services where you pay a weekly or monthly fee for a nice new car. 

Car-sharing service price comparisons 

Service	Cost to borrow/rent a car (cheapest plan)
Uber Carshare	– No monthly fee  – $6.99 booking fee  – $5 per hour or $25 per day  – $0.21 per km
Go Get	– $49 annual subscription fee  – $12.10 per hour usage fee  – $0.44 per km  – $102 per day  – $250 per-authorisation on sign-up
Flexi Car	– No joining fee – $49 annual subscription fee – From $12 per hour – $80 per day  – $0.40 per km
Popcar	– $10 joining fee – $19.90 monthly fee – $5.50 hourly usage rates  – $0.40 cost-per-kilometer
Carbar	The cost varies between different car models and the year made. Here are some examples: Toyota Yaris 2019 - from $181 per week Nissan Qashqai 2019 - from $224 per week Hyundai Santa Fe 2019 - from $269 per week Audi Q2 2020 - from $339 per week

Prices correct at the time of writing (February 2023). 

Savings.com.au’s two cents

Try using each of our six savings tips to see how much of a difference it can make to your running costs over the course of a year: 

1. Use smartphone apps to find the cheapest petrol nearby 
2. Do your research to find a good car loan interest rate
3. Use comparison sites to find the most suitable insurance policy and make your car safer to lower premiums 
4. Check that your local mechanic is cheaper than an official dealership when the time comes for a service 
5. Pay for your registration annually instead of semi-annually 
6. Take care of your car and keep it indoors to minimise depreciation! 

If you find owning a car too expensive for how much you use it, then you can also consider renting a car using some of the services mentioned above.

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