What are the ongoing costs of owning a car and how can you budget for them?

Finance Journalist · 30 August 2021
After you’ve purchased a car, it may seem like the big expenses are firmly in your rear view mirror. But there are actually a number of ongoing costs you’ll need to budget for.

From registration fees to getting your car regularly serviced, we’ll cover some of the costs you’re likely to encounter as a car owner.

What are the ongoing costs of owning a car?

Some of the main ongoing costs of owning a car can include:

Car insurance

In Australia, compulsory third party insurance (or CTP insurance) is mandatory. This can protect you financially if you injure or kill someone in a car accident. Except in NSW, CTP insurance is usually included in your registration cost.

You may also decide to take out a higher level of insurance with a third party property damage, third party fire and theft, or comprehensive car insurance policy. Comprehensive car insurance provides the highest level of cover and it is typically also the most expensive. Comprehensive policies can also include roadside assistance as a standard or optional extra, or roadside assistance can be purchased separately such as through a motoring club like NRMA, RACV or RACQ.

The cost of comprehensive car insurance will depend on factors like your age, the vehicle you are insuring, where you live, your claims history and the excess you choose. To give you an idea of costs, Canstar has calculated the average cost of comprehensive car insurance premiums for a 30 to 49 year old in different states.

Average cost of comprehensive car insurance for a 30 to 49 year old

Profile Average premium
New South Wales $1,276
Victoria $1,243
Queensland $908
Western Australia $815
South Australia $904
Tasmania $814

Source: www.canstar.com.au. Based on comprehensive car insurance policies rated in Canstar’s 2021 Comprehensive Car Insurance Star Ratings. Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess ranging from $600 to $750.

You can also see the average cost of premiums for different ages and driver profiles. You might also like to shop around and compare policies, with Canstar Research revealing you could save hundreds by switching to an award-winning car insurer.

Registration and licence fees

You’ll also need to pay ongoing car registration fees and drivers licence fees. The cost of your registration will vary depending on where you live, as well as factors like the type of car you have and vehicle specifications. As we mentioned, depending on which state or territory you live in, your registration fees may also cover the cost of CTP insurance.

Research from the Australian Automobile Association (AAA) found that the average Australian household (a couple with children and two cars) paid $29.28 per week for registration, CTP and licensing costs, or about $1,523 per year.


To keep your car moving, you’ll also need to pay for regular fuel. According to AAA, the average price of regular unleaded petrol was 143.4 cents per litre in Australian capital cities and 140.3 cents per litre in regional areas in the second quarter of this year. For the typical household with two cars, this equated to spending $73.09 a week on fuel, or about $3,801 a year.

Downloading a fuel monitoring app could help you save money. There are a number of apps like FuelCheck (for NSW residents), MotorMouth, Fuel Map and Petrol Spy that will search current petrol prices and show you where you can find the cheapest fuel in your area. You can also keep track of regular expenses like fuel using a budgeting app, such as the new Canstar App that’s powered by Frollo.

Servicing and maintenance

Another ongoing cost to factor in is getting your car serviced. Regular servicing is important to make sure your car stays in good shape and it can potentially help you avoid more expensive issues down the track. So how often should you be getting your car serviced? According to AutoGuru, the basic rule is that you should service your car every 10,000 kilometres or six months, whichever occurs first.

AutoGuru found that the average cost of a car service in Australia is $245 for a minor service and $386 for a logbook service. This figure is fairly similar to the AAA, who put the weekly price of servicing and tyres at $29.88 per week or about $1,554 per year on average for a typical household with two cars. However, the cost can vary depending on your car’s make and model and what is required, including repairs. Because of this, it can be a good idea to have an emergency fund at hand so you are able to cover any large out-of-pocket costs.

Loan repayments

If you purchased your car using a car loan, you will also have to make regular loan repayments until the loan is paid off. This may be your biggest ongoing cost. How much your loan repayments are will largely depend on how much you borrow, how long the loan term is, the interest and the fees charged. You can use Canstar’s Car Loan Repayment Calculator to estimate car loan repayments (noting that it does not consider all fees and charges).

If you don’t make your loan repayments on time, you could risk damaging your credit score. Your lender may also repossess your car if you have taken out a secured loan, or take you to court to recover the outstanding amount.

In addition to these ongoing costs, it’s worth factoring in any parking and road toll costs you may need to pay, as well as car depreciation. Although this isn’t an actual cost you will need to budget for, it’s important to keep in mind that your car will generally lose value over time. Depreciation can vary depending on factors like the make and model of your car

Remember that the cost of owning a car can vary significantly depending on the vehicle in question, including whether it is a diesel, petrol, hybrid or electric car, as well as factors like how often you drive your car, where you live and whether you purchased the car outright or using a car loan.

Cover image source: Nopphon_1987/Shutterstock.com.

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