How much it really costs to own a car in Australia

William Jolly By on October 2, 2018
Ongoing car costs savings

After you’ve paid the purchase price for a new car, the reality is you aren’t done paying for that car at all.

The ongoing costs of owning a car can be enough to drive your finances over a cliff if you’re not careful.

Besides the interest costs on a car loan (if you have one), there are really five main costs that can influence how much your car will truly cost you:

  • Fuel
  • Registration & licensing
  • Insurance
  • Maintenance costs & servicing
  • Depreciation

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.


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 are currently sitting at around $1.60 – a four-year high.

The Australian Automobile Association’s (AAA) March 2018 Transport Affordability Index reported the average two-car Australian household (two adults, two children) pays $71.27 for fuel every week! You’ll probably pay less than this if it’s just you driving your car, but that still amounts to over $1,850 per year.

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.

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 $1,635.27 in capital cities and $1,483.22 in regional areas. The AAA also reflected this in a weekly cost figure between the capital cities:

City Weekly registration, CTP & license fees Rank
Canberra $38.97 1
Sydney $35.08 2
Perth $34.61 3
Melbourne $31.82 4
Adelaide $30.45 5
Darwin $29.00 6
Brisbane $28.99 7
Hobart $22.65 8
Capital Average $31.45

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.  


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 report, these are the average weekly household costs of comprehensive car insurance for both new and used cars:

City Weekly cost of comprehensive car insurance Rank
Melbourne $32.20 1
Sydney $29.44 2
Darwin $26.14 3
Brisbane $22.59 4
Adelaide $21.94 5
Canberra $19.46 6
Hobart $17.76 7
Perth $14.66 8
Capital Average $23.02

Based on this data, the average Joe or Jane’s annual comprehensive insurance premium would be about $1,197.

Savings tip: You can reduce your insurance premiums by installing security features in your car. Shopping around each renewal could also save you hundreds, since many providers increase premiums year-on-year by default. 

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 pays $22.98 each week, or $1,194 each year.

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. 


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.

Research from RACQ found that in 2018, depreciation was actually the biggest ongoing motoring cost in Australia. RACQ calculated that Australia’s best-selling vehicle, the Toyota Hilux ute, costs roughly $100/week in depreciation (assuming it’s driven 15,000 km per year) – that’s more than $5,000 a year. The models with the biggest depreciation costs are the Tesla electric cars, which have an average depreciation of up to $238 per year. 

Savings tip: These are average figures – 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 has calculated the cost of depreciation, fuel, tyres, servicing, insurance and registration as well as potential interest repayments on nearly 140 vehicles in Queensland in order to work out the average cost of each one over a single year, based on cars that have travelled 15,000 kilometres. The results are not particularly pretty.

  Cheapest car (annual cost) Costliest car (annual cost)
Small car Kia Cerato S ($6,685) Toyota Prius Hybrid  ($10,356)
Medium car Skoda Octavia 110 TSI Sport ($9,799) Volkswagen Passat 132 TSI ($11,503)
Large car Holden Commodore RS ($11,643) Kia Stinger 330S ($14,836)
Ute Mitsubishi Triton GLX ($11,721) Volkswagen Amarok Core Edition ($13,194)
Sports Mazda MX-5 Roadster ($10,138) Ford Mustang Fastback ($17,100)

Source: RACQ

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 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? Ridesharing services like GoGet allows you to book cars to use for a specified period of time – these cars currently include a Toyota Yaris, a Toyota Carolla, KIA Sportage and more.

Let’s take the Toyota Yaris for example. Its listed price is currently around $17,000, and according to the RACQ, its average annual running costs including all of the above ends up at around $7,122, or $136 weekly.

Comparatively, renting the same car from GoGet for 10 hours a week on the GoFrequent Plan will cost you roughly $110 a week (minus the insurance excess), based on:

  • $30 a month fee ($6.92 weekly)
  • $63.50 for 10 hours rental
  • $40 for the 100km worth of fuel
  • $0.40 per kilometer travelled

This service only has a few select cars though, but there are other ones like Car Next Door that let you borrow from people who are willing to rent out their own personal cars.’s Two Cents

Try using each of our five 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. Pay for your registration annually instead of semi-annually
  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. Take care of your car and keep it indoors to minimise depreciation!
William Jolly
William Jolly joined as a Financial Journalist in 2018, after spending two years at financial research and comparison website Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.


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