How has the cost of running a car over the past 50 years changed

RACV RoyalAuto Magazine

The expense of a car is constant and endless; every kilometre, the vehicle uses fuel, wearing out tyre rubber, losing its resale value, etc. At various stages of the vehicle’s life all – and the car itself – must be replaced.

You might resent the scale of the cost, because nothing is getting cheaper, is it? But would it help to know, in the quest for cheaper and more efficient motoring, whether, in real terms, the car is cheaper to run than, say, 10, 20 or 50 years ago?

After compiling all the facts and figures for this year’s RACV Driving Your Dollars survey – where we reveal the actual costs of owning and running a vehicle, every week and every kilometre – it was decided to do the historical comparison.

So I spent an afternoon in a corner of the RoyalAuto office, going over previous running costs surveys. Looking back, it is amazing to see how far we’ve come in some areas, while some of the core issues of motoring haven’t changed.

RoyalAuto has been publishing these figures for more than 50 years, the result of intense study every year by our technical department and now our vehicle engineering team.

In 1965 we examined just one vehicle type, while by 1995 it was eight specific models. The 2015 study provides individual results for 111 different cars.

First let’s look back to see how things have changed, by following the progress of a typical 6cyl Australian family car.

1965

The units of measurements and currency in RoyalAuto’s running costs survey look almost foreign. RACV researched the cost of owning and operating the likes of a Ford XP Falcon or HD Holden. The average price was £1278 ($2556 when Australia converted to decimal currency the following year). This is equivalent to more than 10 months of the average wage – $56 a week before tax. Petrol was 3s10½d per gallon (8.5 cents a litre) and was consumed at 27 miles per gallon (10.5L/100km).

1975

Now our study had more detail with cars split into five categories and an average cost given for each. The Medium category included 6cyl cars such as a Holden HJ Kingswood and Ford XB Falcon. With an average wage of $148 a week and purchase price of $4150, they were much more affordable – equal to about 6½ months of pay. (We probably spent the spare cash on a new TV set – colour came to Australia in 1975.) These big beasts were thirsty, though, using around 14.1L/100km but in 1975 fuel was 60 cents a gallon (13.2cpl).

1985

The February 1985 issue of RoyalAuto brought good news, with little change in the cost of motoring in the year prior, “effectively ending the cost spiral which made motoring such an expensive business in the late 1970s and early 1980s”. Prices had reached new highs in the early 1980s following the energy crisis. Our typical large family car was a VK Commodore or XF Falcon at an average price of $12,700 and the average wage had increased to just under $400 per week before tax. This drop in affordability meant it cost almost 7½ months’ pay. The large car had shed some weight and fuel consumption dipped to 12.5L/100km. Petrol was 49.9cpl.

1995

“The costs of running a private car have risen dramatically during the last 12 months,” read the opening line of RoyalAuto’s 1995 article. This was attributed to interest rates and depreciation rather than fuel price, which was 71cpl. The flag for the 6cyl family car was flown by the VS Commodore and EF Falcon, at an average price of $29,676. This was a big hit to affordability, as the car’s price was now around 10½ months of the $650-a-week average wage. (So only the careful savers were adopting this decade’s newest toy, the personal computer.) Cars were bigger but more efficient engines brought fuel use down to 12.0L/100km.

2005

The 2005 results look a lot more like what you’ll find on the following pages in this magazine. We surveyed 37 vehicles across 11 categories, and the typical large family car was the BA Falcon and VZ Commodore, with Toyota Camry and Mitsubishi Magna included for good measure – the four Australian-built cars of the time. The average purchase price hadn’t shot up that much, though; $35,000 against an average weekly wage of $1044. This signified an increase in affordability with less than eight months of pay required to buy a car. (Which meant more spare cash for luxuries such as the phenomenal iPod.) Fuel prices teetered around $1 a litre but fuel consumption was just 11.3L/100km. We had a detailed look at LPG and found that, at less than 40cpl, it only took around three years before LPG users were saving money compared with having bought a petrol car.

2015

A drop in fuel prices and interest rates has led to an overall reduction in operating costs over the past year. The recent free trade agreement with Japan has also caused price drops for many popular models. Our stalwart 6cyl family cars are fast approaching their final versions as we move to the end of Australian manufacturing and smaller cars and SUVs become more popular.

The irony is the Australian cars are better and more affordable than ever. The average price for a locally built 6cyl family car is back to near 2005 prices at $35,960. With an average pre-tax wage of around $1500 a week, this is equal to less than six months’ pay. There’s been a big gain in fuel consumption, too, with these family cars down to 8.9L/100km, and there’s also been a 10% drop in the price of petrol – over the past 12 months it’s averaged 134.5cpl. The 2014 average was 144.9.

1909 FORD MODEL T

As a point of interest we looked back to the grandfather of the mass-produced motor car – the Ford Model T. When released in Australia in 1909, the Model T cost £300, which was well beyond the means of the average person – the annual wage for a factory worker was about £70. The Model T could achieve 21 miles per gallon (13.5L/100km) and fuel was about 1 shilling a gallon.

Written by Blake Harris, Photos Carolyn Ridsdale
July 01, 2015