The major assumption behind the operating and ownership costs methodology is that motorists travel 15,000km a year. This is slightly above the ABS Survey of Motor Vehicle Use (12 months ended 31 October 2014) which estimates that the average Victorian-registered passenger car travels 14,100km a year. An assumed distance of 15,000km a year has been maintained for the purpose of comparing with previous years' results.
The cost of ownership is calculated over a five-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 this ownership period and operating distance.
The 2016 operating and ownership cost calculations only apply to private buyers and the costs associated with vehicle ownership and operation have been specifically targeted to them.
As with previous years, the ownership costs are estimated for the year 2016 and future predictions based on CPI are not included.
The vehicle selection is based on sales figures with the top-selling vehicles in each class being chosen. Other models of interest (e.g. hybrids and electric cars) are also included.
The base model variant is generally chosen except where the price of a higher-spec variant is more comparable with other vehicles in that class. Where available, a manual transmission is chosen for cars in the Micro category while an automatic transmission is selected for all other vehicles.
The cars selected for the Small SUV class are all two-wheel-drive where available. In the other SUV classes a four-wheel-drive model was chosen although several two-wheel drives are also included for comparison purposes. Petrol-powered vehicles are typically chosen for the Small and Medium SUV categories and diesel-powered vehicles for the larger categories.
These are the costs associated with the purchase and ownership of the vehicle which are payable regardless of whether the car is used. Standing costs include depreciation, on-road costs, loan interest, registration, insurance, auto club membership and licence fees.
Although the cost of depreciation is not realised until the vehicle is sold, the figure is assumed as an average for the five years. This cost is based on the predicted trade-in value after five years and 75,000km of a vehicle in average condition as determined by Glass’s Future Values. The difference between the purchase price and the estimated trade-in value is used to calculate the amount of depreciation.
These are determined by getting the total cost of:
List price of the new vehicle
A standard dealer delivery fee (based on averages for each manufacturer)
Government stamp duty
VicRoads number plates charge
Registration including compulsory third party insurance (TAC)
Where a vehicle manufacturer publishes a list price that is an ongoing drive-away price, then this is used instead of the above.
This is based on repayments made on an RACV Finance car loan. It is assumed that 100% of the on-road cost of the vehicle is borrowed and that repayments are made monthly over a total loan period of five years.
Registration, comprehensive insurance and auto 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 a medium-risk suburb
- The vehicle is for private use only
- The vehicle has been financed with RACV finance
Auto club membership is basic RACV Roadside Care.
Licence costs are for half a 10-year Victorian licence.
The running costs are the additional amounts that must be paid in order to use a vehicle. Running costs include fuel, tyres and servicing costs.
The fuel prices used in the 2016 operating costs survey were determined by RACV as the Melbourne metropolitan average for the 12 months prior to the study (up to the latest possible month). The average fuel costs used are:
- 91 RON petrol – 123.0 cents per litre
- Premium petrol – 133.6 cents per litre
- Diesel – 118.6 cents per litre
- LPG – 54.1 cents per litre
Fuel consumption is based on the ADR 81/02 combined test figure as published in the Green Vehicle Guide
It is assumed one full set of tyres will wear out within the study period given that on average tyres last 45,000km (as estimated by RACV auto care centres).
Replacement costs are quoted on tyres 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 comprises two costs: the cost associated with regular servicing and the cost of unscheduled servicing and repairs.
Standard service parts and labour times follow the owner’s handbook schedule and services are performed using only original equipment parts. The manufacturer-specified service intervals for time or distance are used, whichever comes first. Where available, fixed or capped-price service programs are adopted.
Unscheduled servicing and repairs incorporates a number of common replacement parts including parts that experience wear and tear due to normal use of a vehicle. For example, brake pads and rotors, windscreen wipers (assumed to be replaced yearly) and a battery are included. Windscreens are commonly damaged as a part of normal driving and so their replacement cost is also included.
Standard labour times as specified by the vehicle manufacturers are used for each service and for the replacement of unscheduled replacement parts.
Parts prices are sourced from the vehicle manufacturers as the most up-to-date information. Windscreen and battery prices are sourced from RACV Windscreens and RACV Batteries or the manufacturer when needed.
Labour rates have been averaged from a survey of metropolitan service centres. The average labour rate is varied for each manufacturer.