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How Much Does a Car Really Cost?

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the true cost of owning a car

So you’re finally ready to buy a new (or used) set of wheels to get around town. Whether it’s a brand new hot off the boat buy or a second hand budget buster for a few grand, the cost of the purchase price is only part of the expenditure for a car. Here’s an easy guide to keep track of all the costs of having your own mode of transport. 

Purchase Price 

This will obviously vary widely depending on whether you are buying a brand new or a used car. The best thing is there is likely a car out there to suit your budget, but you need to be sure you know what you are after so its good to create a shortlist to keep you on track. Things like boot size, transmission (auto or manual), number of doors and engine capacity will all have to be factored in. What are your priorities and what are you prepared to compromise on (if at all)? Checking out the pros and cons of each vehicle you research with comparison sites such as might help to narrow down your wishlist.

Once you’ve found the one, there are a few ways to pay. Up front with cash, bank transfer, taking out a personal loan through a bank or via finance through the car dealership. If you’re taking out any kind of loan there will be a down payment or deposit required, so allow for this.


If you've taken a personal or car loan, or dealer finance, you'll need to factor in repayments. Ensure these have been factored into your weekly or monthly budget before you even think about making a purchase. Investigate payment and finance options carefully (never just go for finance at a car yard on the day without having looked into other alternatives or you could end up with a really expensive loan with unfavourable terms and conditions). Endeavour Mutual Bank has some very competitive car and personal loans available which may provide you with more flexibility and potential savings than a traditional car yard finance contract.

Fuel, parking costs and tolls

It’s kind of a no brainer, but it can be surprising to discover out how much you spend on fuel each week. It’s also something to consider at the beginning of the car search journey, can you find a model with good fuel economy rather than a petrol guzzler? Depending on the car it might cost say $60 to fill a tank, and perhaps that will last you a week (or more or less depending on how much you drive). Ensure you allow for the weekly tank fill into your budget.  Track your daily route to work and check to see if you'll be passing through toll roads.  Sydney tolls are not cheap.   Work out how much in tolls you’ll be paying and add it to your car budget costing. It could be up to $100 a week if you use several toll roads twice a day. 

Taxes and Registration

Once you buy your car you'll  need to register it under your name. If its a used car it may already have some time left on its registration under the previous owner, in which case the previous owner needs to transfer the registration over (this is a small cost of $33 plus any stamp duty which is about 3% of the cost of the purchase price).  Registering a vehicle also attracts a motor vehicle tax which could be $300 or more per year.


The cost of insurance is based on how much of a risk insurers perceive you to be. Eg, if you are a youngster who's just passed your test, you will pay more for your cover.  Its worth comparing policy options via several different insurers as prices of policies can vary by hundreds of dollars.

  • CTP: Everyone in Australia has to have CTP cover (compulsory third party) and is a requirement before registration can be completed.
  • Comprehensive or Third Party Property: Remember, insurance is designed to protect you. Comprehensive insurance will help cover the costs of an accident where you are at fault, and help pay for the repairs for both parties (you and the other driver). Comprehensive is the most expensive but also most extensive insurance policy for motor vehicles. If you only spent a couple of grand on a car you’ll only use to drive to the local shops and back and you don’t want to fork more than what the vehilce is worth to insure it fully, you can choose to limit your cover to just third party property, meaning if you cause an accident, the policy won't cover the cost of repairs to your vehicle but you'll be saved the stress and expense of the other car's repairs. Its a bit of gamble really, and a risk assessment exercise. If in doubt go for the best cover you can afford.

Servicing and Roadside Assistance

You'll need to get your car serviced regularly, typically every six months or once a year, it varies by model. Servicing ensures it’s safe to drive and for new cars keeps the manufacturer’s warranty valid. A routine service typically starts around $150 but will often reach far beyond if wheels are being realigned, new tyres are being fitted or brake pads need replacing. As a driver it is your responsibility to ensure your car is road worthy and safe to drive. It also makes sense to invest in road side assistance, as you’ll be glad you have it if the time comes when you’re stuck somewhere and need a new battery or your engine blows up, a small annual fee will keep you covered in times of emergency.

Go through all of the above add everything up and then divide it by 52 (number of weeks in the year) to get you the average weekly cost to keep a car. You might be surprised at the running costs. Just make sure you can afford it. Otherwise perhaps you’ll catch that bus after all!  For any help in securing a personal or car loan the friendly Endeavour staff can assist, simply call 1300 13 14 20 or visit your local branch for more information.  

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.