July 2021Read article
Buying a new (or used) car is an exciting time. It’s like a shiny new toy! However, there can sometimes be a few hidden or forgotten costs when buying a car. There’s a lot of investment that goes into maintaining the car, not just the purchasing of it.
So what are the real costs of owning a car? We’ve put together a quick guide to help you be the best car owner to give your car all the love it needs to last as long as possible.
The actual purchase
Once you’ve figured out what car you’d like to buy, whether you’re buying a new or used car, you’ll need to think about the costs involved with either option.
Buying a new car
If you’re buying new, you’ll need to pay things like stamp duty, registration fees, and any other add-ons you’ve selected, like floor mats. However, buying new may give you an advantage with your servicing costs as most dealers will offer discounted service packaging when you pre-pay your services.
Buying a used car
Buying used usually has a few less hidden, up-front costs. You will need to pay registration transfer fees and other fees related to getting the car legally under your name.
When looking at the car, it’s recommended to get someone to inspect the car for any issues from a professional mechanical perspective. A range of service providers can do this for you for a cost.
When you’re at the purchasing stage, if you need finance for a new car, explore your options. Some car loan providers provide discounts for eco-friendly cars, which will help you in the long run.
For example, our Green Car Loan is a great option to be rewarded for a lower interest rate for getting an eco-friendly car. That doesn’t mean it has to be completely electric but simply be relatively new and meet the emissions requirements. This is a great option for those looking to save money while making a positive impact on the environment.
Once you’ve bought your car, there’s a couple of costs to start including (if you haven’t already) in your budget. These include things like:
- Insurance. In Australia, it’s compulsory to have at least third-party insurance to cover you on the road.
- Registration. Every year, you’ll need to pay for your registration. Some states, like Victoria, now have 3-month registration payment options.
- Roadside assistance. While not compulsory, it’s always beneficial to have roadside assistance for those unexpected breakdowns or tyre pops.
All of these costs are worth building up in a piggy bank account if you can, so start saving now so you don’t get shocked with a big bill when it comes around.
You won’t be shocked to learn, but there are also some ongoing costs to owning a car to remember.
It’s always a good idea to budget for your ongoing car costs as they’re not something you can avoid for the most part. These costs might include:
- Fuel. Some major fuel providers have apps that allow you to ‘lock’ in petrol rates for a period of time too to avoid fluctuating fuel costs.
- Maintenance and servicing. Maintaining the car and getting it serviced is essential and can sometimes be costly depending on if there are any issues as well.
- Tyres. Obviously, you can’t drive around on bald tyres or you wouldn’t be roadworthy. When you’re due for tyres, you can buy them online for cheaper these days and send them directly to your mechanic.
- Car loan costs. If you got finance to fund the purchase of your car, you’ll likely have ongoing repayments and other costs involved.
- Depreciation. Did you buy a new car? This will probably depreciate quicker and isn’t a direct out of pocket cost but impacts the future value of the car.
- Road tolls. If you can avoid tolls, great. Sometimes we just want to cut some time off our trip so keep a small budget aside for commuting on any toll roads to add to your toll account.
Overall, there’s a number of costs involved in owning and maintaining a car. One particular cost that usually stings people is servicing. That’s why it’s always recommended to get a professional to inspect a car if it’s used so that you can avoid any unexpected costs to fix pre-existing issues.
You should also consider budgeting for your costs in advance so whenever you receive a bill you can simply dip into those funds and pay it. With peace of mind, you’ll have most of your bills covered, you’ll be enjoying your new car as much as you possibly can.
Some people opt for public transport or Uber, but there’s no better feeling than having your own car to access whenever you want.
Good luck with your purchase and safe travels!