The Cost Of Owning A Car

If you’re shopping around for a new or used car, securing the best possible car loan deal is a good start. But there are other costs to consider, beyond the purchase price of your chosen vehicle. And by understanding the cost of owning a car, you can make an informed decision about the car that suits your lifestyle needs, and your budget.

The figures below are a weekly breakdown of some costs connected to owning and running a car, thanks to data from the Australian Automobile Association's (AAA) December 2022 Transport Affordability Index. As cost-of-living pressures hit households and businesses across Australia, fuel prices will continue to fluctuate.

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

Fuel

When it comes to budgeting the cost of owning a car, fuel is the most regular ongoing expense.

But with petrol prices continually on the move it's hard to pin down a precise figure. Based on analysis of fuel prices for the last quarter of 2022, the AAA reported a $98.31 fuel bill each week for the average two-car Australian household (two adults, two children). That adds up to more than $5100 a year.

Fuel prices vary, depending on where you live in Australia, and are also affected by seasonal triggers. How you drive can also impact fuel consumption, with stop/start driving in metropolitan areas using fuel differently to open road country driving.

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

Look for apps that point you to the closest and cheapest petrol price near you. PetrolSpy, Fuel Map and MotorMouth are all handy. But remember: cheap petrol hunting is a false economy if you have to drive too many extra kilometres to save a cent or two a litre.

If you have an electric vehicle (EV), your running costs will be connected to the rate you’re getting from your energy provider. You can, of course, shop around for a better electricity deal.

The cost of your car loan

After fuel costs, servicing your car loan is probably the next most regular ongoing cost related to car ownership.

According to AAA data, car loan payments don’t differ much between cities (assuming you’re comparing the same interest rate), with almost no difference in weekly costs across capital cities or regional towns.

Based on the average weekly cost measured in the eight Australian capital cities, car loan repayments can add up to an average annual cost of $8100.

Location	Car loan payments (weekly)
Perth	$157.18
Sydney	$157.03
Melbourne	$156.12
Hobart	$155.60
Canberra	$155.52
Adelaide	$155.48
Darwin	$155.37
Brisbane	$155.16
Capital average	$155.93

Shopping around for a car loan can make a big difference to your ongoing costs. Getting pre-approval helps ensure you’re ready to go when you do see a great car deal you want.

Car insurance

Recent data comparing the average cost of car insurance in Australia (based on comprehensive insurance), is just over $25 per week, with an annual total of more than $1220. But there are a range of factors that impact the cost of your insurance premiums, including the location the car is kept and your own age and driving experience. As you age and your driving habits change, it’s worth looking for better deals to suit your circumstances.

The bottom line

If you own your car and want to keep it in good condition, maintenance is another expense. Just how much it will cost you depends on what type of vehicle you drive and whether it gets serviced by a dealership, or with an independent mechanic.

Registration costs also vary across states and territories in Australia and the type of vehicle also impacts the price you can expect to pay.

But if the alternative to owning your own car is relying on public transport, or car sharing, crunching the numbers in a direct comparison is the best way to decide if car ownership is a smart financial choice for you.

Go deeper: What is pay as you drive car insurance?

Financial disclaimer

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.