Owning and running a car can be hard on your wallet. Expenses add up!
Many people don’t know what a car actually costs to own as there’s more to the cost of a car than just the drive-away price.
Here’s The Buzz car costs equation to help you work out your cars’ real cost before you make the purchase:
Cost of a car = purchase price + rego & car insurance + running costs (service, parts, fuel) + depreciation (& any loan interest)
Registration & Insurance
Each Australian state and territory has different registration charges. Check your State/territory government motor authority website for details.
Along with rego, every vehicle in Australia is required to have Compulsory Third Party Insurance or CTP. CTP insurance covers the cost of injuries to people - passengers in your vehicle, and other road users.
You can opt for Comprehensive Car Insurance which covers the vast majority of incidences e.g. your car is stolen, damaged by hail in a storm, or involved in an accident; or you can choose to cover your car for what suits your needs and circumstances. *
When you buy car insurance you are buying the security of a great claims experience so compare your insurance provider’s service and claims service track record – read the blogs and ask around!
Running Costs
Your spend on fuel depends on a number of factors such as the fuel efficiency of the car, your driving habits, type of fuel etc.
If you drive long distances, making the right decision about petrol vs diesel vs LPG will have a huge impact on running costs. But just before you go Hybrid consider whether the extra purchase price of a diesel or a Hybrid engine car is justified.
Service costs vary across different makes. A minor service job (every 10,000km) may cost as little as $150 compared to over $400 for others. Consider what your car service would cost.
Depreciation - the biggest cost of car ownership!
It’s great to buy a new car, but its value drops the minute you get behind the wheel and drive off. A car may lose half its value in the first three years.
When calculating the cost of ownership of your car, don’t forget to factor in the interest on a loan if applicable.
Do your math before you make the purchase. It’ll help you make the right decision without straining your budget.
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*Please read The Buzz Product Disclosure Statement when considering your insurance needs. Insurance issued by Insurance Australia Ltd trading as The Buzz Insurance.
The content, thoughts and opinions stated in this article are of the relevant contributors. The Buzz Insurance do not necessarily share or endorse those opinions. Neither The Buzz Insurance nor any of its employees makes any warranty, expressed or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, product, or process disclosed.
