Car running costs: What to budget for

Whether it's for a weekend drive to the beach or the road trip of a lifetime, Aussies love to get out and about in their cars. That said — between the cost of the vehicle, petrol, services, rego and insurance — owning a car can be a little on the expensive side. While that can be off-putting, setting a realistic budget can keep you one step ahead.

Here are a few things to consider when figuring out your car budget.

Before getting on the road

  • Registration: Car rego must be renewed yearly. The cost might depend on the type of vehicle you drive – for example, a light commercial vehicle or van generally costs more to register than a motorcycle or passenger car. It also could depend on your postcode. In New South Wales, Victoria and South Australia, there are different pricing structures in metro and regional areas. Say if you live in metropolitan Melbourne, drive a sedan or 4WD, a yearly vehicle registration fee is $834.801. Whereas, if you live in rural Victoria even with the same kind of car, you'd only expect to pay $716.00 because you're in a rural lower risk zone.
  • Car Insurance: Comprehensive Car Insurance is a popular type of cover. Bingle Comprehensive Car Insurance covers things like vehicle damage, theft, collisions, vandalism and weather damage just to name a few, plus if you accidentally damage someone else's property through use of your car. Third Party Car Insurance, on the other hand, only gives you cover for accidental vehicle damage you cause to others, and not your own vehicle. An online quote can give you an estimate of how much car insurance will cost you.

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On-road costs

  • Fuel. What you spend on fuel depends on the car you have, and the type and size of its engine. Fuel efficiency can help you measure this cost. As a rule of thumb, anything less than 6 litres/100km is considered economical. To work out an estimate of how much you might spend on petrol per year, you can generally take the amount of kms you drive on average, multiply it by the fuel economy of your car and the average cost of fuel per litre.
  • Tyres. It's important to keep an eye on your tyre tread. Tread is what makes your tyres grip the road in wet weather. In Australia, all tyres require a minimum tread depth of 1.5mm. The good news is most tyres are now fitted with tread wear indicators, so it's easy to tell when they need replacing. Just look for the indicator bars moulded into the tread grooves. As a rule of thumb, tyres over 5 years old need to be checked yearly by a professional. Taking good care of your tyres' air pressure, wear, alignment, and rotation (eg, switching the rear tyres with the front tyres) means you'll get that extra longevity from your tyres.
  • Toll roads. Major cities like Sydney, Melbourne and Brisbane have toll roads in operation. For people living in these cities, the average weekly household cost of toll roads is on average $622. If you can't avoid tolls, you may want to think about factoring them into your overall running costs.

Other car expenses

  • Regular servicing. While every car is different, most vehicles should be serviced every six months or 10,000km, whichever comes first. There are generally different factors that make up the cost of your car service. Sometimes, it can depend on the type of car, mechanic, and how often you service your car. Speak to your mechanic in advance to request a quote and consider shopping around.
  • Depreciation. It's no secret that generally cars lose value over time. 'Depreciation' can be another hidden cost of owning a car. Some cars can hold their market value better than others, but almost all cars will drop in value over time. Visit to see the current valuation price of your car.

Ways to save on car costs

  • Review any car-related offsets. For example, NSW drivers with privately owned vehicles can save on their rego. If you're a NSW driver and spend either over a certain amount in tolls from the previous financial year3, you may qualify for one free 12-month rego (if you spend over $1300 or more) or one half-priced 12-month rego (if you spend over $780 or more), provided you meet Service NSW's eligibility requirements.
  • Claim car-related expenses on your tax. The ATO lists car-related expenses as cost deductible, so if you drive a lot for work, it can be useful to log the kilometres you've travelled as well as costs such as fuel top-ups.
  • Maintain your car. Keep your car in tip top shape by maintaining it with things like routine oil changes to help protect against engine wear and tear. You could regularly check your tyre pressure and tread which is also an important safety aspect.

Why is it important to budget for car ownership?

  • No one likes to get stung with unexpected repair or registration fees. Your budget doesn't need to be exact, but an estimate can give you an idea of how expensive car ownership can be.
  • Insurance could be something you may want to consider factoring into your budget too. Even a simple prang — let alone a major accident — may be costs that you can never entirely budget for. Bingle offers a few levels of insurance to choose from, so you can choose one that suits your needs and lifestyle.

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The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.

1 If the vehicle is in a metropolitan area (high risk zone): VicRoads registration fees
2 Australian Automobile Association - Transport Affordability Index Q4 2019
3 Service NSW - claim your toll relief