The Cost of Owning a Car

Figuring out the true, ongoing cost of a car is a challenge, whether you’re a first-time buyer or expanding your fleet.

On average, according to data from the Australian Automobile Association, Australians spend 16% of their income on transport costs annually ^[1], a large part of their overall household income.

With car prices continuing to rise, running costs can be very different between new and used cars, so before you buy a new vehicle, it is important to know what ongoing costs might set you back.

The following figures, based on the AAA’s Transport Affordability Index ^[1], show the average annual transport costs for a typical household in an Australian capital city. Note that these reflect a household’s total transport budget, not the running costs for a single car.

Quick Stats

• Total Annual Transport Cost: ~$24,484 for a typical household.
• Household Fuel Costs: ~$4,775 annually.
• Registration, Licensing & CTP: ~$1,838 annually for all vehicles in the household.
• Household Car Insurance: ~$2,632 annually for comprehensive cover on the household’s vehicles.
• Maintenance & Tyres: ~$1,915 annually for servicing the household’s vehicles.
• Household Car Loan Repayments: ~$11,252 annually.

Licensing and Car Registration Cost

Car registration costs can vary based on the state and vehicle type. For instance, larger car models typically incur higher registration fees than electric vehicles or cars with smaller engines, which may lead to lower registration costs.

Compulsory Third Party (CTP) insurance is mandatory in all states, and depending on where you live, it may be included in your registration costs or require you to find your own provider.

Budget Direct does not offer CTP insurance.

This mandatory cover will protect you financially in case you cause injury to someone else in an accident. But it will not cover you for any damage to your vehicle or another party’s vehicle or property.

To help reduce your licence fees, you can renew for a longer term instead of on a yearly basis. Further information can be found on licensing costs for longer terms on the relevant state and territory website.

Licensing and Car Registration Costs by State and Territory

Please note ACT was not included due to ACT calculating registration costs based on emissions compared to weight as of December 2025.

Any figures provided for car registration and licensing costs are indicative and approximate only. Actual costs can vary significantly based on specific conditions set by individual states and territories. It is best to check with the relevant state or territory road authority for precise and up-to-date information applicable to your specific vehicle and circumstances.

Car Insurance Cost

Your insurance cost will depend on several factors, including the type of car you have, where you are located, your claims history and your driving record. This is why it can be difficult to estimate how much you are likely to spend on insurance, as each driver’s situation is unique.

To find out exactly what your car insurance costs would total, you will need to get a tailored quote for an accurate price or view our car insurance calculator.

Quote First with Budget Direct Car Insurance

Getting Car Insurance on the day you purchase your car can offer protection for your new car for you as the new owner.

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Each year you have car insurance, you will pay a car insurance premium, but you will also be paying any excesses towards repairs if you are found at fault when making a claim.

Your insurance costs primarily involve two types of payments: your premium (the amount you pay to keep your policy active) and an excess (a contribution you pay towards any at-fault claims you make).

If you are looking to cut costs on car insurance, it is worth keeping an eye out for discounts and incentives where you can. For instance, Budget Direct Car Insurance offers 15%^ off your first year’s premium if you initiate a new policy online.

For a general understanding of what insurance in Australia can cost, here is a run down from the research team at Canstar ^[9].

Average Annual Comprehensive Car Insurance Policy Cost by State and Territory*

*ACT not included in the data.

How is your premium calculated? Insurers assess your individual risk, your vehicle, and your driving habits to calculate your cost. However, several factors can help lower your premium, including:

• A good claims history: Being a safe driver pays off.
• Higher excess: Choosing to pay a higher excess will mean higher costs at claim time, but lowers your annual cost.
• Low kilometres: Driving less can mean paying less.
• Secure parking: If your car is parked in a garage overnight instead of on the street, then your premium may be lower.

Smart choices now mean savings later. Making informed decisions can save you hundreds of dollars each year while keeping you fully protected.

What can affect car insurance premiums?

Find out what can affect car insurance premiums, including the type of policy you have, the driver, the type of car you have and more.

How much does car insurance cost?

Car Service Cost

Understanding maintenance costs is essential, as regular servicing can keep your car running safely and reliably, and potentially reduce larger expenses in the future.

Think of it as insurance for your mechanical investment. Spending a few hundred dollars on maintenance now could prevent a catastrophic breakdown later.

Regular servicing is crucial for keeping your car running safely and reliably. For proper servicing intervals, you should check your car’s manual or directly with the vehicle manufacturer. The total cost of a service is influenced by your car’s make and model, the level of work required, and whether you choose a dealer or an independent mechanic.

Some dealers offer Capped Price Servicing (CPS), which sets the maximum price you will pay for each standard scheduled service for a specified period of time.

While the price may be different for each service interval (for example, a 30,000 km service may have a different capped price than a 15,000 km service), you will know the most you have to pay for each one before it takes place. This provides greater predictability for your budgeting and helps you avoid unexpected costs for the items covered in a standard service.

You will also need new tyres every two to three years, depending on how often you drive your car. Tyres are essential for safety. Unroadworthy, bald tyres pose a danger to you and others on the road.

According to the Australian Automobile Association, for Q3 2025, the cost of servicing and tyres was on average $1,915 for capital cities and $1,812 for regional centres, annually ^[1].

Average Annual Servicing and Tyres Cost by Capital City

Cost of Petrol

Fuel is one of the biggest ongoing expenses for car owners, with prices fluctuating across the country.

You could save on fuel by adjusting your driving habits, such as efficient driving by avoiding hard acceleration and heavy braking.

The benefits of this careful approach can result in lower fuel costs, reduced wear and tear on your car, and safer driving overall.

Additionally, you can also use technology to help save money on your car. Using online fuel price trackers to find the lowest prices and taking advantage of fuel discount apps can help you save money in the long run.

Electric vehicles (EV) have become a more popular choice, with EVs now accounting for 12.1% of all Australian new car sales, per the EVC’s State of EVs 2025 report ^[10].

With the ever rising cost of fuel, the cost of running an electric car is proving to be significantly lower than for a conventional petrol or diesel vehicle. Charging at home, especially with solar panels or during off-peak hours, can reduce these costs even further.

Data shows Australian drivers spend around $92 a week on average on fuel in capital cities ^[1]. However, the cost of fuel for your car will depend on whether it is petrol, diesel or a hybrid, its weight, engine size, how much you travel and your driving style.

Car Loan Costs

A car loan can help you avoid a large upfront payment by spreading the cost into manageable monthly payments, helping you financially purchase the car over a few years.

However, depending on your financial situation, this can be a long-term commitment. You can find the rough costs of a car loan per state below to gauge what you may need to pay ^[1]. Keep in mind, this does take into consideration average household loan repayments, which include one or more financed vehicles.

Other Car Expenses

Beyond the major costs, plenty of smaller expenses can also add up. Although none of these are extreme costs, it is still worth considering so you can factor them into your budget.

Batteries

A car battery’s lifespan typically lasts three to five years, depending on the type of battery, how you use your car, and the local climate conditions.

The replacement cost of your car’s battery can range from $120 for a standard battery to $1,000+ for a premium battery ^[11]. Keep in mind that callout fees will apply without Roadside Assistance.

Toll Roads

Tolls can add up quickly, particularly in highly populated areas in New South Wales, Queensland and Victoria.

The average weekly cost can be up to $60 for Sydney drivers, which translates to an annual impact of up to $3,120 for regular commuters ^[1]. If possible, consider weighing up if an alternative route will suit you better to help save money.

Roadside Assistance

Roadside assistance can give you the comfort of knowing that help is there if you need it. This covers emergency fuel, if you lock your keys in your car, tyre and battery help, and towing to a repairer.

The average yearly cost in Australian capital cities of Roadside Assistance is $132 ^[1].

At Budget Direct, our annual price of roadside assistance is $89.95/year. You can save 15%‡ on your first year’s membership when you purchase Standalone Roadside Assistance online.

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Total Cost of Owning a Car**

After you’ve paid for the initial purchase price, the running costs of your car can vary due to your unique situation.

With 2025 industry data ^[1], we have calculated a typical household’s expenses for their vehicle(s) based on the average of Australian capital cities, so you can get an idea of what you may pay on a weekly and yearly average.

**Public Transport was removed from this calculation due to not impacting the cost of owning a car.

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