My car

fundamental assumptions

The major assumption behind the operating and ownership costs methodology is that motorists travel 15,000 km per year. This is in line with the ABS Survey of motor vehicle use which estimates that the average Australian registered motor vehicle each travelled an average of 14,600 km per year (ended October 2007). The cost of ownership is calculated over a 5 year period.

The operating and ownership costs are only indicative of the costs associated with a vehicle driven in these exact conditions. No conclusion can be drawn about the vehicle operating costs outside of these ownership period and operating distance.

The 2011 operating and ownership cost calculations only apply to private buyers and the costs associated with vehicle operation and ownership have been specifically targeted to them.

As with previous years the ownership costs are estimated for the year 2011, and future predictions based on CPI are not included.

vehicle selection

A range of popular models were selected, and configured according to popularity (eg. manual or auto transmission) in an attempt to ensure comparability within a given class. In addition the base model vehicle was generally chosen (if prices are still similar) out of all the variants of that model.

standing costs

These are costs associated with the purchase of the vehicle. The loan costs were incurred monthly over the 5 year period of the loan for a fully financed vehicle. Although the depreciation cost is not realised until the vehicle is sold the figure is assumed as an average for the five years. Depreciation costs were based on the age and distance travelled of the vehicle. Interest, Insurance, Registration and RACV Membership were taken as annual costs.

depreciation

This cost is based on the predicted trade in value of the vehicle in average condition as determined by Glass’s Future Values. The estimated trade in value of the car after 5 years and 75,000 km is used to calculate the amount of depreciation. The on road cost of the vehicle is used as the purchase price as new.

The on-road cost of the vehicle is defined as:

List price of new vehicle as provided by Glass’s
+
Government LPG rebate (if applicable)
+
A standard dealer delivery fee (based on averages for each manufacturer)
+
Government stamp duty
+
Optional equipment, chosen at our discretion to reflect buying trends and comparability within a given model class
+
VicRoads number plates charge
+
Registration including compulsory third party insurance
=
On Road Cost

loan repayments

This was based on repayments made on an RACV Finance car loan. It was assumed that 100 percent of the on road vehicle cost was borrowed for the purpose of these calculations, interest was payable at a rate of 9.25 percent per annum, and that repayments were made monthly, over a total loan period of five years. A loan application fee of $260 was included.

registration, comprehensive insurance and club membership

Registration costs include:

• VicRoads registration fee
• TAC compulsory third party injury insurance premium

Insurance is calculated using RACV comprehensive insurance premiums allowing for:

• RACV Insurance product
• Maximum rating
• No claim bonus
• Youngest owner driver is a 30 year old male
• The vehicle is garaged in Donvale
• The vehicle is for private use only
• The vehicle has been financed with RACV finance

Club Membership is basic RACV Roadside Care.

License costs are for half a 10 year Victorian License ($81.10 total).

running costs

Fuel and tyre costs vary with the distance travelled, however servicing costs can vary with time and distance travelled.

fuel costs

The fuel prices used in the 2011 operating costs survey were determined by RACV as the Melbourne metropolitan average for the last 6 months (up to the latest possible month). The average fuel costs that were used;

• ULP – 134.2 cents per litre
• PULP – 143.1 cents per litre
• UPULP 98 octane – 148.2 cents per litre
• Diesel – 136.8 cents per litre
• LPG – 60.5 cents per litre

Fuel consumption is based on the ADR 81/02 Combined test figure as published on the Green Vehicle Guide

tyre costs

It is assumed that 1 full set of tyres will wear out within the given period given that on average tyres last 45,000 km (as estimated by the RACV service centre).

Replacement costs were quoted on wheels fitted and balanced. Replacing the full set of four tyres will also require the tyre fitter to perform a wheel alignment. The replacement cost will be quoted at the recommended retail price (e.g. no sale prices) on an equivalent replacement tyre brand and type.

service and repairs

This comprised two costs, the cost associated with regular servicing and the cost associated with unscheduled servicing and repairs.

Standard service parts and labour times followed the owner’s handbook schedule and services were performed using only original equipment parts. Either the manufacturer specified service intervals for time or distance were used whichever came first.

Unscheduled servicing and repairs incorporated a number of common replacement parts (eg. batteries).Several parts that experience wear and tear within the ownership and operating period were also included.  For example Brake pads and rotors, windscreen wipers were assumed to be replaced yearly and windscreens are commonly chipped and damaged as a part of normal driving and so their replacement costs was included.

Standard manufacturers labour times as quoted by the vehicle manufacturers were used for each service.

For unscheduled or replacement parts such as brake pads, the manufacturer specified fitting time was used where available.

Parts prices were sourced from the vehicle manufacturers as the most up to date information. Windscreen prices were sourced from RACV windscreens and battery prices were sourced from RACV batteries or the manufacturer when needed.

Labour rates have been averaged from a survey of metropolitan service centres. The average labour rate was varied for each manufacturer.