Transport cost increases above national average for Victorians

A Melbourne motorway at night, with streaks of light representing cars going by

Nicola Dowse

Posted November 18, 2022

The latest edition of the Transport Affordability Index has revealed transport costs have increased at a higher rate for Metro and regional Victorians compared to the national average.

According to the Australian Automotive Association’s (AAA) latest edition of the Transport Affordability Index, weekly transport costs have risen across almost all capital cities in Australia over the past three months as interest rate rises fuel higher car loan repayments. 

The average cost of transport across Australia has risen by $13.42 per week over the last year, or $698 annually. While almost every capital city and regional centre saw an increase over the past year, Victorians have seen costs increase well above the national average.

For residents of Melbourne and Geelong, annual costs have risen by $867 and $1,088 respectively.

RACV Head of Policy, James Williams says a slight decrease in fuel prices over July, August and September has been offset by other transport cost increases.

“Despite a brief reprieve on fuel prices between July and September the AAA’s report shows an overall increase in transport costs across Melbourne and Geelong. This increase was driven in most part by higher vehicle purchase prices.”

“Melburnians are paying $16.67 per week more for transport compared to this time last year and Geelong residents are paying an extra $20.93 per week.”

“To find the best deal for fuel at any location, motorists can download RACV’s arevo journey planning app. Arevo sorts by distance, lowest price or preferred brand with an interactive map that updates every 15 minutes. The Fuel Tracker continues to be available on the RACV website.”

A busy Monash freeway

Annual transport costs have risen by an average of $698 across Australia. Photo: Getty.

Transport costs rising in Australia

The Transport Affordability Index is a quarterly survey conducted by the nation’s peak motoring body, the AAA, and accounts for a wide variety of costs associated with transport, including fuel, vehicle registration, servicing, road tolls and public transport.

The regional areas surveyed across Australia as part of the report bore the brunt of rising costs, with regional cities now paying an average of $15.42 more per week for transport compared to the same time last year, while residents in capital cities are paying an average of $11.68 more per week. 

With those increases, from July to September of 2022, metro residents across Australia paid an average of $413.53 per week on transport costs, where regional residents pay $343.93.

While fuel costs were lower across the country (except Alice Springs) during the September quarter compared to the three months prior, Australians are paying on average $966 more for fuel than they did during the same time last year.

A full breakdown of the Transport Affordability Index is available on the AAA website.


A woman being given car keys at a dealership

Car loan repayments have increased over the last three months, growing $2.07 a week in Melbourne. Photo: Getty.

Melburnians paying more

The last quarter saw the total annual cost of transport for Melburnians rise by $137 over the past three months to a total cost of $24,109. 

In Melbourne, car loan repayments alone increased by $2.07 a week during this time, with registration, licensing, insurance, servicing and tyres, tolls, and roadside assistance also contributing to the growing transport costs which now account for 16.5 per cent of the household’s income.

Overall, Melbourne is the second most expensive Australian city to live in terms of annual transport costs, pipped at the post by Sydney ($25,255 per year). The cheapest capital city for is Hobart, with a total annual transport cost of $18,820.  

The quarter saw fuel expenditure decrease slightly, with fuel bought during this period still benefitting from the cut to Australia’s fuel excise (which returned in full on September 29).

Melbourne fuel expenditure dropped $1.94 a week from $97.29 in the June quarter to $95.35 in September. However, compared to the same time in 2021 Melburnians are still paying an extra $900 per year for fuel, though other capitals like Hobart, Darwin and Canberra are still paying more. 

Given the growing cost of transport and particularly car loans, knowing the true cost of owning any given vehicle in increasingly important for Victorians families and those on tight budgets.

RACV’s Car Running Costs Survey recently revealed the most affordable cars to run in 2022, highlighting the cheapest vehicles to own in Australia across multiple categories like small cars, SUVs, utes, and electric vehicles. 


A person refuelling their petrol car

The full fuel excise cut was in effect during the September quarter, helping decrease fuel expenditure. Photo:Getty.

Expenses increase in Geelong 

Rising costs aren’t just affecting metropolitan residents either, with motorists in Geelong also shouldering higher prices. Victoria’s second biggest city is now also the second most expensive regional centre in Australia for transport costs, beating out Bunbury with a total annual transport cost of $18,931.  

Geelong residents pay a weekly average of $116.98 for fuel, with regional towns like Mount Gambier, Launceston, Alice Springs and Bunbury all posting fuel expenditure costs higher than in any capital city.  

Like in Melbourne, Geelong residents were also hit by rising car loan payments which increased in line with the capital. 

Alice Springs remains as the most expensive regional city when it comes to transport (with an annual total transport cost of $19,648) while Wagga Wagga ($16, 107) was the cheapest. 

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