Your Guide to Vehicle Running Costs
Are you purchasing a car soon? If so, it is important to consider the running costs of the vehicle you are buying. Here are some important factors to consider.
What are vehicle running costs?
Purchasing a fuel-efficient car can do wonders for your financial budget. Vehicles that are thirsty at the bowser can impact the amount of money you have for spending on other important ownership aspects like repairs or upgraded insurance. High-performance cars or big SUVs typically consume a lot of fuel, though they can also vary greatly between models – so be sure to compare fuel consumption figures.
Car insurance costs
Other types of insurance include:
Third party property only - Pays for any damage you cause to another vehicle or other property if you get in an accident.
Fire and theft - Covers your own vehicle. In the event that your car catches fire or gets stolen, the insurer will provide a replacement.
Comprehensive - Covers any sort of natural damage such as storms or falling branches. Also covers damage to your vehicle after a collision.
Other than CTP, insurance policies are optional. However, if you have invested in a new or valuable car, insurance may be cheaper than having to pay for any damage you incur from car accidents or natural disasters like a hailstorm.
Maintenance and repair costs
Every vehicle requires regular maintenance at some stage and with varying frequency, which incur labour costs and may include:
• Oil changes.
• Fluid checks.
• Brake pads.
• Tyre wear (and rotation).
• Software updates.
• Timing belt adjustments.
• Routine inspections.
Ignoring these tasks could result in damage to the vehicle, costing you more money in the long run.
Some perishable items are dependent upon how the owner drivers and the conditions in which they drive their vehicle.
In addition to these regular maintenance obligations, vehicles can incur trouble through their lifespan. New vehicles usually require fewer repairs, and this is definitely a factor to consider depending on your budget and personal vehicle desires.
Other than insurance, there are both one-off and annual costs associated with your vehicle.
• Registration – You must pay a small fee to have your vehicle registered.
• Stamp duty – A one-time charge upon purchasing a vehicle or transferring one to a new owner.
• Vehicle tax – A yearly tax that is part of your annual tax statement.
• Other taxes – Australia imposes other occasional taxes, such as Luxury Car Tax (LCT) that is applied to vehicles from a specified (but varying) price point. This price threshold is higher for vehicles classed as fuel-efficient.
• Vehicle depreciation – An “invisible” cost. Virtually every car depreciates in value according to time and mileage. This cost does not come out of your pocket, but when reselling the vehicle you will almost never sell the car for the same price you paid. Resale values vary between cars – even similarly priced models.
These are costs that not everyone pays but are worth keeping in mind::
• Storing your car.
• Registering for parking spaces.
• Buying aftermarket accessories.
• Protecting your vehicle from theft.
• Having your car cleaned.
Take all of these costs into account when preparing to buy a car. By taking these precautions you will be able to get the most out of your investment and enjoy the fun part of your car-buying journey.