Average cost of running a car
Besides the purchase price of a car, there are really six main costs that can influence how much your car will truly cost you:
- Registration & licensing
- Car insurance
- Car maintenance & service cost
- Car loan costs
Below is a breakdown of the weekly average cost of running a car:
||Estimated cost ($)
|2. Registration & licensing
|3. Car insurance
|4. Maintenance & service
|5. Car loan
*Calculated by RACQ based on Australia’s best-selling vehicle, the Toyota Hilux ute.
How much does it cost to get your car serviced?
According to data from The Australian Automobile Association’s (AAA), maintenance and servicing costs the average household $23 a week, or $1,194 per year. This cost will vary based on different cars and it's driven, but you should factor this cost in when buying a new car.
How to save money on your car
- Shop around for fuel. There’s no shortage of tools to help you identify where the cheapest fuel is near you. Check out apps like PetrolSpy, GasBuddy, Fuel Map and MotorMouth.
- Pay your car registration annually. You can save a fair bit of cash by paying annually as opposed to semi-annually or quarterly. Of course, you’ll need to consider whether you intend to own the car for another year.
- Shop around for car insurance. 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.
- Get your car serviced by a local mechanic. Servicing a car at an official dealership can be more expensive than local mechanics, who may do just as good a job.
- Take good care of your car. You can reduce how much your car depreciates by if you regularly service it, keep it well maintained and cleaned and store it in a garage to minimise environmental wear-and-tear.
- Compare car loan rates before committing. There are plenty of different car loan products out there and interest rates can vary massively between lenders. Getting a car loan with a good interest rate can help you pay less than that average figure.
Is it better to rent a car?
If the costs of running a car have put you off owning one, you could consider renting instead of buying. There are several options out there you can try such as GoGet, which allows you to book cars to use for a specified period of time, Car Next Door that lets 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.
Which petrol should you use?
When it comes to the different fuel types, it’s the number that really matters – 91, 95 and 98. These numbers are called the ‘octane-rating’, and are an indication of how well the fuel resists burning too early inside the car’s engine.
Standard petrol is given a 91 rating, while premium unleaded is both 95 and 98. There are also two ethanol-based fuels – E10 and E85 – which are more environmentally friendly options.
Below is a comparison of these petrol types, what they mean and how much they cost on average:
||What it means
||Avg. cost ($)/L
|Standard unleaded (91)
||Most common type of fuel though less fuel efficient than the premium types.
|Premium 95-octane unleaded
||Designed to be more fuel efficient and give a smoother engine operation, which in turns improves performance.
|Premium 98-octane unleaded
||Highest octane unleaded fuel, providing higher engine power and performance as well as less pollution
||Ethanol-based fuel; 10% ethanol and 90% unleaded petrol. More powerful than standard unleaded petrol but the presence of ethanol does mean it can be slightly less fuel efficient.
||85% ethanol and 15% regular petrol. Powerful with less effect on the environment.
How to save money on fuel
The general rule of thumb is: the difference in fuel efficiency is about 1% per octane rating – 91 and 95 unleaded fuels, for example, have roughly a 4% difference. If there is a lesser price difference between the two, then it’s highly likely that it’s worth switching.
Other ways you can save more on fuel are:
- Switch your engine off when stuck in traffic, or invest in a car that does this automatically
- Maintain a steady speed and drive smoothly
- Use cruise control on long trips
- Ensure your tyres are inflated properly
- Remove excess weight (don’t keep heavy objects in the boot if they’re not essential
- Take public transport or ride when you can