If you’re looking to buy your first car, or upgrade to a newer model, you need to look at more than just the price on the windscreen. From purchase price to insurance, lets look at some of the upfront and ongoing costs of owning a car.
What are the costs?
Which car you choose can depend on many factors such as what you want, what you need and most importantly what you can afford.
You need to consider a car's costs over its expected lifetime. While a new car can be more expensive to buy, it may be cheaper to service.
On the other hand, a used car, will likely be cheaper up-front, but depending on the condition it will probably need more maintenance.
Before you buy a used car, get a professional to inspect it, even if you know your stuff.
Car history reports and financial searches
For a small fee, a Personal Property Securities Registry (PPSR), opens in new window search will tell you if the previous vehicle owner still owes money on the car.
This is important because if they do (and they default on a secured loan) 'your' car could be repossessed, even after you've bought it.
For a larger fee, you'll get a more comprehensive car history report. This gives you the car's financial history, as well as other important details such as:
- approximate valuation of the car
- odometer readings
- write-off history
- if it's been stolen.
Stamp duty can be a large one-off cost and is calculated on the price of the car you’re buying.
Be mindful that each state has different stamp duty costs, opens in new window depending on what type of vehicle you’re purchasing (e.g. small car, ute, hybrid).
If you’re buying a new car, some dealers may also add stamp duty on top of the purchase price.
What are your annual costs?
Purchasing roadside assistance is often a good idea as, depending on your package, professional assistance is only a call away if your car breaks down.
This is a large ongoing cost you need to budget for each year. When you first buy your car, you'll also need to factor in registration transfer (and registration renewal if it’s about to expire).
Registration fees can vary but your local vehicle registration centre will be able to tell you how much you'll need to pay and by when.
When you purchase your car, make sure you've got appropriate insurance as finding yourself without it can be costly.
It's a good idea to shop around for the best deal on car insurance as prices can vary. Some insurers might even give you a discount if you've got other insurance, such as travel or home, with them.
What are your ongoing costs?
As we’ve already discussed, when you buy a car you’ll need to budget for many annual costs including insurance, registration and roadside assistance.
Here are some other ongoing costs you'll need to consider:
- road tolls
- servicing and maintenance
- new tyres
- parts and repairs
- loan repayments (if applicable).
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.