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Car running costs 2017

The cost of owning a car doesn't end when you hand over the cheque to the dealer. A car continues to cost you, every week and every kilometre, and knowing just where and how can help you choose the most cost-effective vehicle for you when you next buy.

RACV's annual Driving Your Dollars vehicle operating costs survey takes the mystery out of owning and running a car, and it's a vital tool for every motoring consumer.

Australia’s Best Cars awards

the rear of a BMW 320i

Australia's Best Cars is a co-operative venture between Australia's state motoring clubs and is the nation's most comprehensive and reliable consumer-focussed vehicle testing and awards program. 

It examines around 200 models on the Australian market, in 15 vehicle categories, and is designed to help consumers make informed buying decisions.

Each car within the 15 categories is assessed in three broad areas: value for money, practicality and on-road attributes. It's a totally objective evaluation of each vehicle, based on input from consumers on what's most important to them when choosing a car to buy.

The highest-scoring car in each category receives the prestigious Australia's Best Car award.

The 2016/17 Australia's Best Cars winners will be announced on 21 February, 2017.

Visit the Australia's Best Cars website Buy the Australia's Best Cars Magazine online

How are operating costs calculated?

Fundamental assumptions

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 30 June 2016) which estimates that the average Victorian-registered passenger car travels 14,500km 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 2017 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 2017 and future predictions based on CPI are not included.

Vehicle selection

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.

Standing costs

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.

Depreciation
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.

On-road costs
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.

Loan repayments

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.

Running costs

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.

Fuel costs

The fuel prices used in the 2017 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 – 123.7 cents per litre
  • 95 RON petrol – 132.7 cents per litre
  • 98 RON petrol – 138.7 cents per litre
  • Diesel – 124.1 cents per litre
  • LPG – 63.9 cents per litre

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

Tyre costs

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 RACV Mobile Tyre Service price 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.

Reimbursement rates

The 2017 vehicle reimbursement rates are indicative of the cost to private motorists to own and operate their own vehicle and are intended as a guide only.

Vehicle segment Average cents/km Average weekly cost
Micro 41.2 $118.76
Light 50.5 $145.67
Small 57.2 $164.92
Small (Luxury) 76.2 $219.81
Medium 71.5 $206.26
Medium (Luxury) 99.6 $287.30
Large 88.0 $253.82
Large (Luxury) 142.1 $409.94
Sports 85.0 $245.20
People Movers 82.2 $237.00
Small SUV 60.2 $173.59
Small SUV (Luxury) 86.4 $249.20
Medium SUV 73.7 $212.67
Medium SUV (Luxury) 100.8 $290.65
Large SUV 80.6 $232.50
All Terrain SUV 100.3 $289.34
2WD Ute 75.9 $219.01
4WD Ute 85.4 $246.27

Choosing a greener car

Fuel consumption label

Fuel consumption label

Fuel consumption labelling on all new cars aims to help car buyers choose a car. Model-specific labels on the windscreen of new vehicles give an indication of how many litres of fuel the car would use to travel 100km in particular driving conditions, i.e. a combination of city and highway. (Actual consumption will depend on a range of factors, including traffic and weather conditions, vehicle maintenance and driving style.)

The label also indicates the amount of carbon dioxide, the main greenhouse gas, that will be emitted – the lower the better.

The greenhouse gas emissions and fuel consumption information on the label is the same as that in the Green Vehicle Guide.

Fuel consumption guide

When buying a used car, refer to the Australian Government's Fuel Consumption Guide Database. It provides comparative data on the fuel consumption of many vehicles sold in Australia between 1986 and 2003. When comparing vehicles of the same fuel type, the higher the fuel consumption the higher the greenhouse gas emissions.

Fuel type

Different fuel types also result in different levels of air pollution and greenhouse gases. Provided they are operating properly, diesel, LPG and CNG engines emit fewer greenhouse gases than conventional petrol engines. CNG also results in less air pollution than regular fuels. Diesel produces more particles than other fuels. Electric vehicles produce no emissions themselves, however greenhouse gases and air pollutants are emitted when electricity is made from fossil fuels such as brown coal.

  • Visit Green Wheel an online guide enabling consumers to assess greenhouse emissions of all passenger cars sold in Australia.

Different cars have different impacts on the environment. The size, weight and engine type of a car affect its fuel consumption and hence its emissions. Emission controls also differ between cars.

In general, larger cars are less efficient because they are heavier and need more energy (fuel) to move around. Modern engine technologies mean that newer cars tend to use less fuel than older cars of the same size. However, the added weight and power required for automatic transmission and extras such as air-conditioners can reduce the efficiency gains of newer technologies.

The emission control technologies used in a car affect the amount of air pollution emitted. For example, catalytic converters which were introduced to Australian cars in the mid-1980s substantially reduced air pollution levels. Emission standards for cars have been getting stricter over the past 20 years and will continue to improve. Some overseas cars are equipped with pollution controls that are better than current Australian requirements.

If you have a choice between cars, choose the most efficient and least polluting car that meets your particular needs for everyday motoring. Choosing a newer car over an older car of the same size will tend to mean less air pollution (provided the newer car is well maintained).

Green Vehicle Guide

When buying a new car, refer to the Australian Government's Green Vehicle Guide. It rates all new cars on their greenhouse and air pollution performance and gives them a star rating out of five. The higher the rating the better. The guide also provides a relative fuel consumption figure.

Half of the Green Vehicle Guide score relates to greenhouse and half to air pollution. So a car that uses a lot of fuel and therefore creates a lot of greenhouse gases might still get a reasonable score if it has particularly good air pollution emission controls. Likewise, a car with low fuel consumption but only average emission controls would also get a reasonable rating.

 

Estimate your fuel emissions

A Low Emission Vehicle (LEV) is very fuel efficient and creates substantially less carbon dioxide (CO2) emissions than the average vehicle on our roads. The Greenwheels website features:

  • Buyer’s Guide – what is the most suitable low emission vehicle for your needs?
  • Compare Your Car – vehicle comparison calculator
  • Top-rated LEV Vehicles

To estimate the fuel consumption and environmental impact of your vehicle compared with a Low Emission Vehicle (LEV), visit Green Wheels

Cars for parents

As with any purchase, buying a family car should revolve around its main purpose: transporting the family. This is especially so for young children whose needs include child restraints If you already have child restraints, take them with you when looking at cars to buy to ensure they will fit. If you are just starting a family and/or need new restraints, look at the options on our website.

When choosing your next vehicle, think about safety, space, anchor points and seatbelts.

Safety

  • Choose a car with a good safety rating. While this may seem a daunting task, RACV has some great tools to help you. For new vehicles check out its ANCAP safety rating, and for older vehicles look at the Used Car Safety Rating.
  • Airbags are an important part of the vehicle safety system. However in a crash they go off with some force, so children 12 years and younger shouldn’t be seated in the front if there is a spare position in the rear. 
  • The good news is that research indicates a child can sit next to a rear seat curtain airbag.

Space

  • Check to see if the rear seats can take two or three restraints, and that a front passenger will still have enough leg room with a restraint fitted.
  • Two-door vehicles can be very difficult for fitting restraints. Getting children in and out of restraints can also be very awkward.

Anchor points

  • Look at the number and position of anchor points. Restraints use a tether strap connected to these anchor points. A poorly positioned anchor point can mean the tether strap can severely reduce luggage room, e.g. for prams and shopping.
  • Make sure there is enough room between the back seat and the anchor so that the tether strap can be adjusted properly.
  • People movers seem ideal, but some do not have anchor points for each seat position. Also the tether strap and size of some child restraints can reduce the seating capacity, so make sure this is not an issue.
  • If buying a new car, ask the dealer for fittings for each anchor point as they are often not supplied.

Seatbelts

  • A car with a centre lap/sash seatbelt in the rear is safer than one with just a lap belt. Fortunately newer cars usually have lap/sash belts all round.
  • Make sure the seatbelts are long enough. Some are too short to thread through child car seats when in the recline position.

Guide to buying or selling a car

No matter if you're buying or selling a used car in a private sale, or getting one brand-new straight from the dealer's showroom, there are laws and procedures to guide and protect you. In partnership with RACV, VACC and VicRoads, Consumer Affairs Victoria has produced a guide to everything you need to know, check and do to protect yourself and get the fairest deal from your next car purchase or sale.

Consumer Affairs Victoria's guide to buying a car