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Owning a car: Costs you should consider

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The running costs of a car

When you’re buying a new car, don’t just look at the price tag. Owning a car comes with a lot of extra (often expensive) costs that you need to consider too. 

To better prepare yourself for car ownership, here are the costs of owning a car you need to consider: 

Upfront costs 

When budgeting for your car purchase, don’t forget to include these costs, as well. 

Stamp duty 

Stamp duty is the tax you pay to the State or Territory Government. The amount depends on the price and type of car. Each state and territory has a different stamp duty cost for used cars, hybrids, electric cars, utes, and the like, as well. 

If you’re buying a brand-new car, some dealers may include stamp duty costs in the final price. But it’s always best to double check and make sure. 

Registration and Compulsory Third Party Insurance 

All cars in Australia being driven on public roads must be registered. Registration typically comes in the form of an upfront fee, plus an ongoing annual or semi-annual fee. Don’t forget you’ll also need to pay to renew your driver’s license every few years too. 

Often, the cost of registration includes the compulsory third party (CTP) car insurance premium. By law, you’re required to pay for CTP to cover injuries caused by your car’s driver. Car registration and CTP fees are usually more expensive in capital cities compared to regional areas. 

According to Australian Automobile Association (AAA), the average annual cost of registration, CTP and licensing for a two-car Australian family is around $1,588 in capital cities and $1,472 in regional areas. You can save money by paying your registration annually, instead of semi-annually or quarterly. 

Dealer Delivery 

If you’re buying a brand-new car, you’re going to have to pay for dealer delivery. This is the cost of getting the model from the factory to the dealership. The fee also includes preparations such as detailing, final mechanical inspection, removal of packaging, and fitting accessories. 

Typically, the dealer delivery fee averages $1,500 to $2,000 depending on the dealer and manufacturer. 

Vehicle inspection 

Before buying a used car, it’s a good idea to have it inspected by a professional. Even if you’re a car savvy individual, it’s always better to have a second pair of eyes looking at a used car before purchasing.  

A vehicle inspection can be done by a mechanic or through your state or territory’s motoring club like the RACV or the RACQ. The inspection can be as low as $40 to somewhere around $280 depending on where and who is doing the inspection. 

Complete car history and financial reports 

This is extremely useful for those buying a used car. For only $2, you can go on the Personal Property Securities Registry (PPSR) website and see if the previous car owner owes money on the car you’re about to purchase. 

You can also get a more comprehensive car history report for a larger fee. You’ll get details like its write-off history, approximate valuation of the car, and odometer reading. You can also find out if it’s been stolen. 

Ongoing costs 

These costs are what you need to spend to use and maintain your car. Some costs are monthly, annually, or semi-annually.

Car loan payments 

Car loan repayments depend on the type of car and the type of loan you decide to take. If you want to save on interest and own your car faster, getting a low interest car loan on a 36-month or 48-mont term may be ideal. Most car owners take a five-year loan term, as well. To get a better idea on what your car repayments will look like, check out loans.com.au’s car loan calculator

Car Loan calculator

There are so many different kinds of car loans to choose, from new car loans to used car loans to variable car loans. Take your time and talk with lending specialists to figure out which is right for you.

Car insurance 

It’s wise to take out a higher level of coverage because CTP doesn’t insure your or other driver's cars against damage. Higher levels of car insurance include: 

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

Not only that, but the cost of a car insurance premium can vary based on many factors such as: 

  • Your car 
  • Your age (younger drivers generally pay a higher premium) 
  • Your driving history  
  • Your gender (males pay more as statistically they’re more likely to be involved in accidents) 
  • Your suburb 
  • How far you travel, where you keep the car overnight, etc 

According to the AAA the national average weekly cost of comprehensive car insurance is $24.63— a small price to pay for peace of mind. 


Repairs and regular servicing are hidden costs of car ownership but if you want your vehicle to remain roadworthy it’s highly recommended to get regular maintenance. 

Servicing your car can get pretty expensive but most new cars come with ‘capped price servicing’ which essentially means new car owners will know ahead of time exactly how much they’ll be charged rather than being surprised with a nasty bill at the end. 

The costs of maintaining your car can be hard to predict given how many things can go wrong with cars, but the AAA found the average household paid $29.55 each week, or $1,536 each year for maintenance and servicing. 


Although not a traditional cost, depreciation is something you should think about especially if you’re going to sell your car in the future. Cars typically depreciate in value over time losing thousands in value through the years. Keeping track of your car’s depreciation value will help you know when it’s time to sell or upgrade your car


Fuel is almost certainly a car expense you’ll pay the most regularly and it can be hard to predict how much it will cost because the price is always changing. Factor in the cost of fuel when purchasing a car so you don’t end up buying a fuel-guzzling vehicle instead of something more fuel-efficient.  

When you think about how often you need to fill up the car, the costs can quickly escalate especially if your vehicle isn’t very fuel-efficient. Keep track of your car use to get an estimate on your regular fuel costs.

If you’re in the market for a new car, why not consider a green car? A green car eliminates some of these ongoing costs such as fuel and maintenance. Car loan rates are also cheaper for eligible green cars at loans.com.au.

To find out more about your next green car book an appointment with one of our friendly lending specialists to get pre-approved today. 

Apply now

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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