Ask most Australians what their car costs them and they will quote the fuel bill, maybe the rego. The real number is far bigger. Once you count registration, compulsory third party insurance, comprehensive insurance, servicing, tyres, roadside assistance, tolls, parking, and the silent giant of depreciation, motoring organisations such as the RACV consistently estimate the cost of running a typical medium-sized car at $12,000 to $16,000 per year, or roughly $230 to $310 every week.
That makes the car the third-largest expense in many households, behind housing and food, and ahead of energy, insurance, and childcare for plenty of families. Yet because the costs arrive in different shapes (weekly fuel, annual rego, invisible depreciation), almost nobody sees the total.
This guide adds it all up: every component, state by state where it matters, with worked examples for different kinds of cars and drivers, and an honest look at when a car is not worth owning at all. Fuel gets its own deep dive in our guide to petrol prices in Australia, and if you are weighing the car against the bus, see our guide to public transport costs.
The Big Picture: Annual Cost of a Typical Car
Indicative annual costs in 2026 for a medium petrol car (think Camry, Mazda 6, mid-size SUV) driven around 15,000 km per year:
| Cost Component | Typical Annual Cost |
|---|---|
| Depreciation | $3,000 - $6,000 |
| Fuel | $2,000 - $2,700 |
| Comprehensive insurance | $1,000 - $2,500 |
| Registration + CTP | $700 - $1,200 |
| Servicing and repairs | $500 - $1,200 |
| Tyres (annualised) | $200 - $400 |
| Roadside assistance | $100 - $250 |
| Tolls and parking (city drivers) | $0 - $2,000+ |
| Total | $7,500 - $16,000+ |
A small, older hatchback owned outright and driven modestly can come in under $6,000 per year. A new large SUV financed, insured for a young driver, and parked in the city can blow past $20,000. The ranges below unpack each line.
Registration and CTP by State
Registration (“rego”) and compulsory third party (CTP) insurance are the unavoidable annual admission ticket. CTP covers injuries to people in accidents you cause (not vehicle damage) and is compulsory everywhere; the difference is that some states bundle it into rego while others make you buy it separately.
Indicative combined annual rego + CTP for a typical passenger car in 2026:
| State / Territory | How It Works | Typical Combined Annual Cost |
|---|---|---|
| New South Wales | Rego + separate CTP (“Green Slip”) you shop for | $900 - $1,300 |
| Victoria | Rego includes TAC charge, varies metro/regional | $850 - $1,000 |
| Queensland | Rego + CTP bundled, choice of insurer | $750 - $1,000 |
| South Australia | Rego + CTP bundled | $700 - $1,000 |
| Western Australia | Rego + motor injury insurance bundled | $700 - $950 |
| Tasmania | Rego + MAIB premium bundled | $600 - $850 |
| ACT | Rego + separate MAI insurance | $950 - $1,300 |
| Northern Territory | Rego + MAC scheme bundled | $700 - $950 |
Points worth knowing:
- NSW drivers should shop their Green Slip. It is one of the few states with a competitive CTP market, and prices for the same driver can differ meaningfully between insurers. The state government’s Green Slip price comparison tool is free.
- Rego scales with the vehicle in some states. Victoria and NSW charge more for heavier vehicles; several states give discounts for pensioners and, in some cases, for electric or low-emission vehicles.
- Short-term rego (3 or 6 months) is available in most states for a small premium, useful for cash flow but slightly more expensive across a year.
- Check your state’s transport authority (Service NSW, VicRoads, TMR in Queensland, and so on) for exact figures, since schemes and concessions change with state budgets.
Comprehensive Insurance: The Most Variable Bill
CTP covers people; it does nothing for cars. Damage to your own vehicle and anyone else’s property is covered only if you buy it:
- Third party property ($300 to $700 per year) covers damage you do to other people’s cars and property, but not your own car. It is the sensible minimum for older, low-value cars, because being liable for someone’s Mercedes is the real financial risk, not your $4,000 hatchback.
- Third party, fire and theft sits in between, adding cover if your car burns or is stolen.
- Comprehensive ($1,000 to $2,500 per year for most drivers) covers your car as well, regardless of fault. Lenders require it on financed cars.
The spread within comprehensive is enormous because premiums are priced on you as much as the car: age (drivers under 25 pay the most, often $2,000 to $4,000), suburb (theft and hail postcodes pay more), the car itself (high-theft and high-performance models cost more), excess level, agreed versus market value, and whether you park off-street.
The two reliable ways to pay less: raise your excess (moving from a $650 to a $1,500 excess can cut the premium noticeably, as long as you could wear the excess) and re-quote every renewal. Loyalty is systematically punished in Australian insurance; new-customer pricing routinely beats renewal pricing for an identical policy, and savings of several hundred dollars from switching are common.
Fuel: The Cost You See Every Week
At 2026 prices of roughly $1.70 to $2.10 per litre for unleaded 91, a petrol car using 8 litres per 100 km over 15,000 km costs about $2,000 to $2,600 per year to fuel. A thirsty SUV or ute at 10 to 12 L/100 km can push $3,000 to $3,800; an efficient hybrid at 4 to 5 L/100 km can get under $1,300.
Timing fills to the bottom of the city price cycle, using fuel apps, and supermarket dockets all shave the bill at the margins; the structural lever is the car you choose. Our petrol prices guide covers price cycles, E10, premium fuel myths, and the petrol-versus-EV running cost comparison in detail. The short version on EVs: charging at home costs roughly a third of petrol per kilometre, but the purchase premium takes years to claw back, so the maths favours EVs most for high-kilometre drivers.
Servicing, Repairs and Tyres
A logbook service on a mainstream petrol car typically costs $250 to $500 at an independent mechanic and somewhat more at a dealership, with most cars needing a service every 10,000 to 15,000 km or annually. Budget $500 to $800 per year for routine servicing on a car in warranty, and more like $800 to $1,500 once a car ages past eight or ten years and starts needing brakes, suspension bushes, batteries, and the occasional unpleasant surprise.
Capped-price servicing programs from manufacturers make the first few years predictable, and keeping the logbook stamped protects both warranty and resale value. EVs and hybrids are generally cheaper to service (no oil changes, regenerative braking spares the brake pads), typically saving $200 to $400 per year against a comparable petrol car.
Tyres are the forgotten consumable: a set of four on a mainstream car runs $600 to $1,200 fitted and lasts roughly 40,000 to 60,000 km, which annualises to around $200 to $400 for an average driver. Wheel alignments and correct pressures stretch that life materially.
Add roadside assistance ($100 to $250 per year through the state motoring clubs, sometimes bundled free with newer cars or bank accounts) and, for city commuters, the genuinely vicious costs of tolls and parking: a daily toll commute in Sydney or Melbourne can exceed $2,000 per year, and CBD parking can double it. For many city workers these two lines alone decide the car-versus-public-transport question.
Depreciation: The Biggest Cost Nobody Budgets For
Depreciation does not arrive as a bill, which is why it gets ignored, but it is usually the single largest cost of owning a newer car. A new car commonly loses value fastest in its first three years; as a rule of thumb, many mainstream cars are worth only 50 to 65 per cent of their purchase price after five years, though resale varies widely by brand and model.
Concretely: a $45,000 new SUV that is worth around $27,000 after five years has cost its owner $18,000 in depreciation, or $3,600 per year, more than fuel and insurance combined. A $15,000 ten-year-old car losing $1,000 to $1,500 per year is dramatically cheaper to own even if it needs an extra $800 of repairs annually.
Ways to blunt it:
- Buy at the flat part of the curve. Cars three to six years old have had their steepest depreciation paid by someone else but still have years of reliable life.
- Choose models with strong resale. Utes, Toyotas, and in-demand hybrids have historically held value better than luxury sedans and obscure brands.
- Keep cars longer. Depreciation per year falls the longer you hold; the cheapest car is very often the one you already own, maintained properly.
- Be honest about financing. Interest on a car loan (commonly adding $1,000 to $3,000 per year on a new-car loan) is a pure addition to everything above, and novated leases, while tax-effective for some, bundle costs that deserve line-by-line scrutiny.
Worked Examples: Three Drivers, Three Totals
The outer-suburban family, new mid-size SUV, 18,000 km/year. Depreciation about $4,500; fuel about $3,000; comprehensive insurance $1,400; rego and CTP $950; servicing $600; tyres $350; roadside $120. Total: roughly $10,900 per year, before any loan interest or tolls, call it $210 per week.
The young city renter, 12-year-old hatchback, 8,000 km/year. Depreciation about $800; fuel about $1,100; third party property insurance $450; rego and CTP $900; servicing and repairs $900; tyres $150. Total: roughly $4,300 per year, about $83 per week, with street parking free and tolls avoided. Still more than a full-price annual public transport pass in any Australian city.
The high-kilometre tradie, new dual-cab ute on finance, 30,000 km/year. Depreciation about $5,500; diesel about $4,500; comprehensive insurance $1,800; rego and CTP $1,100; servicing $900; tyres $700; loan interest $2,500; tolls $1,500. Total: roughly $18,500 per year, partially tax-deductible for genuine work use, which is exactly why the ATO’s logbook method and cents-per-kilometre rules matter so much to tradespeople. Keep records; the ATO publishes the current cents-per-kilometre rate and logbook requirements each year.
When a Car Is Not Worth It
At $8,000 to $16,000 per year all-in, the car deserves the same scrutiny as rent. The alternatives have real numbers too: full-fare public transport commuting costs roughly $120 to $200 per month in the capitals ($1,500 to $2,500 per year), car share schemes suit people who need a car hours at a time rather than every day, and the occasional taxi or rideshare has to be very occasional indeed to approach the standing costs of a parked car. A household’s second car is the classic candidate: if it exists mainly for a commute that public transport could cover, dropping it can free up $5,000 to $8,000 per year even after paying for passes and the odd rental.
The crossover point is personal: kilometres driven, kids, shift work, and where you live all move it. The useful exercise is simply to compute your own all-in annual figure honestly (including depreciation) and divide by your annual kilometres. Many drivers discover their “cheap” car costs 60 cents to over a dollar per kilometre. Our cost of living calculator includes typical weekly transport costs (car running costs and commuting) for each capital city and household type if you want to benchmark your spending, and our cost of living guide for 2026 shows how transport stacks against housing, food, and the rest.
Frequently Asked Questions
What does it cost just to keep a car parked in the driveway?
The standing costs (rego and CTP, insurance, depreciation, roadside assistance) run $2,500 to $6,000 per year for a typical car before it moves a metre. This is why low-kilometre drivers pay the most per kilometre and why car share or rideshare can beat ownership below roughly 5,000 km per year.
Is an electric vehicle cheaper to own overall?
Per kilometre, almost always: home charging costs roughly a third of petrol, and servicing is typically $200 to $400 per year cheaper. The obstacles are the higher purchase price and, for some models, insurance premiums. High-kilometre drivers who charge at home reach break-even fastest; low-kilometre drivers may never recover the purchase premium. State EV incentives and road user charges also differ, so check your state transport authority’s current policy.
How much should I budget for a first car as a young driver?
The car is the cheap part. A 20-year-old’s comprehensive insurance commonly runs $2,000 to $4,000 per year, which is why many young drivers carry third party property only ($300 to $700) on a sub-$10,000 car. Budget roughly $4,000 to $6,000 per year all-in for a modest first car driven moderate distances.
Are car costs tax-deductible?
Only for work-related use, and commuting to a regular workplace does not count. The ATO allows either a fixed cents-per-kilometre claim (capped at 5,000 work kilometres per year) or the logbook method, which apportions actual costs by a 12-week logbook. Rules and rates are on the ATO website and change periodically.
Does premium fuel or dealer servicing protect resale value?
Premium fuel adds nothing for a car designed for 91 octane. A complete service history does genuinely support resale, but an independent mechanic’s stamped logbook servicing (using parts meeting manufacturer specifications) preserves both the warranty and the history at a lower price than a dealership in most cases.
Key Takeaways
- The all-in cost of a typical medium car in Australia is $12,000 to $16,000 per year once depreciation is counted; even a modest older car costs $4,000 to $6,000.
- Registration plus CTP runs roughly $600 to $1,300 per year depending on your state; NSW drivers should actively shop their Green Slip.
- Comprehensive insurance ($1,000 to $2,500 for most drivers) is the most negotiable cost: raise the excess and re-quote at every renewal.
- Fuel at $1.70 to $2.10 per litre costs a typical driver $2,000 to $2,700 per year; the car you choose matters far more than where you fill up.
- Depreciation is usually the single biggest cost of a newer car ($3,000 to $6,000 per year); buying three-to-six-year-old cars and keeping them longer is the most powerful saving available.
- Compute your own cost per kilometre honestly before assuming the car (especially a second car) earns its keep against public transport and car share.
Disclaimer: This article is general information only, not financial advice. Registration, CTP, insurance premiums, fuel prices, and tax rules vary by state, insurer, vehicle, and driver, and change over time. All figures are indicative 2026 ranges. Confirm current charges with your state transport authority, current tax treatment with the ATO, and obtain quotes for your own circumstances before making decisions.