Regionally, the price drops to $421.17, with the NSW town of Wagga Wagga spending the least, coming in with a weekly spend of $387.22.
Though these figures include costs such as petrol, registration, insurance, tolls, roadside assistance, servicing and tyres, licences and public transport, across all the major cities and regional centres, the lion’s share of this spending goes towards car repayments, which account for a whopping 46.2 per cent.
SUVs now make up more than 43 per cent of new car sales.
The next highest expense is, you guessed it, fuel (between $100 to $103.06 per week), with insurance taking out the bronze medal (between $39.04 and $47.54 per week).
While there are noticeable variations between the regions and major cities when it comes to costs such as public transport and tolls, when it comes to car repayments, what Australians spend is neck and neck: an average of $211.87 a week for those living in major cities and $211.76 for those in the regions.
With just 11¢ a week between city and regional residents (or $5 over the year), we could just split the difference and call it a day.
Loading
I’m not here to yuck anyone’s yum, and I’m certainly not going to peddle tired and often offensively simplistic one-liners like, “why don’t you just sell your car and use public transport?” when discussing how to reduce transport costs.
Because aside from the cultural connection we have to driving, the options of public transport, walking or riding a bike simply aren’t available for millions of us. But do I think we can find potential savings when it comes to reducing the cost of our cars during a prolonged cost-of-living crisis? You betcha.
First, let’s start with the $11,000 elephant in the room: car repayments. According to the Australian Bureau of Statistics, the number of Australians taking out a personal loan for road vehicles in July 2024 rose by 4.9 per cent. In total terms, that equates to $1.5 billion.
Considering new car prices have risen by almost 20 per cent since April 2020, it’s not surprising that we’re now spending so much on car loans. But what is notable is that in small car models, prices have gone up by as much as 25 per cent.
This, perhaps, goes some way to explaining why we’re now seeing so many sports utility vehicles (SUVs) on our roads. As data from the Federal Chamber of Automotive Industries shows, of the more than 1.2 million new cars purchased in 2023 alone, SUVs accounted for 56 per cent (627,187), while passenger vehicles comprised just 17 per cent (195,116). In the top 10 selling vehicles for the year, the top three were utes and the rest were SUVs.
The Hyundai i30 is a cheaper option when it comes to repayments.
On paper, when you compare car loans for once-trusty smaller models such as the Hyundai i30 (which starts at around $27,000) to an SUV such as the best-selling Toyota RAV4 (starting at around $35,000), the difference may seem minimal in the grand scheme of things.
But if you compare the two on a new car loan rate of 5.6 per cent with no changes to interest rates over five years, the monthly repayments for the smaller model are $527 and $680 for the SUV. I don’t know about you, but I wouldn’t turn my nose up at an extra $153 per month.
In addition to the payments, the fork in the road really comes when you start to factor in fuel costs and insurance. Not only are SUVs substantially more expensive to fill at the petrol station, they also come with much higher insurance premiums.
Loading
That’s because, in part, you’re statistically less likely to be in a crash when driving a sedan or hatchback than you are in an SUV. What’s more, if you are in an accident while driving an SUV, due to the vehicle’s size and weight, more damage is likely, which means your premiums will also rise.
Large cars may be the vehicles du jour right now, but when it comes to cutting costs, smaller might just be better for your daily commute and your hip pocket.
Victoria Devine is an award-winning retired financial adviser, best-selling author, and host of Australia’s number one finance podcast, She’s on the Money. Victoria is also the founder and co-director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.