Staggering increase in car ownership costs revealed

Volatile petrol prices and ever-increasing interest rates are contributing to cost of living pressures for Australian drivers.

David McCowen

2 min read

November 7, 2022 - 2:04PM

The MG3 is the cheapest new car to own and run in Victoria.

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The cost of owning a car has increased by more than $100 per month as rising fuel costs and interest rates contribute to cost of living pressure on Australian motorists.

Research published by the Royal Automobile Club of Victoria has found that the monthly cost to own and run Australia’s most popular light car, the MG3 Core priced from $18,990 drive-away, has increased from about $625 to $735 in the last 12 months.

The MG3 is cheap to own and run.

The increase doubles if you move up a size to the Kia Cerato, which has increased by more than $205 to $1007 per month.

Ownership costs compiled by the RACV examine the cost of purchase, vehicle finance and insurance, fuelling, servicing, tyres and other costs that drivers face.

RACV Head of Policy, James Williams, said fuel costs were second only to initial purchase prices of the cost of owning and running a car.

The RACV estimates fuel represents 13 per cent of vehicle ownership costs. .

“It would surprise no one to see that the cost of owning and operating a car has risen, given the trends we have seen in fuel prices,” he said.

The club found owners of light cars such as a Toyota Yaris or Mazda2 saved about $2500 per year compared to a larger Corolla or Mazda3, with medium-sized cars such as the Toyota Camry or Mazda6 another $3500 upstream.

Different car classes bring a wide spread of operating costs.

Electric cars worked out at $1541 per month on average, or $18,495 per year, about $2500 per year more than an equivalent medium sized SUV or sedan.

Most of the electric car premium was due to higher initial purchase prices.

Monthly running costs for the Tesla Model 3 are relatively affordable, with charging ($71.53) and servicing ($34.35) costs undercutting the petrol Subaru Forester’s $177.32 fuel and $59.28 servicing fees.

Tesla’s Model 3 is cheap to operate, but expensive to buy.

But the Tesla’s $67,833 purchase price and $1362 loan payments are much steeper than the $45,000 or so paid for a similar-sized petrol car, contributing to a five-year total ownership cost of $107,000, well more than the $75,000 to $80,000 required to own and run a petrol car for the same period.

Unsurprisingly, the most expensive models to run were full-sized four-wheel-drives that doubled the running costs of more efficient hatchbacks.

The petrol V8-powered Nissan Patrol is expensive to run.

This V8-powered Nissan Patrol is particularly expensive to run at $2746 per month thanks to fuel bills that triple those of a Toyota RAV4 Hybrid.

The difference between the cheapest and dearest cars in each class is particularly stark.

Mitsubishi’s Pajero Sport four-wheel-drive undercuts the Patrol by more than $1200 per month, or a whopping $70,000 over five years.

Mitsubishi’s Pajero Sport is an affordable 4WD choice. Picture: Thomas Wielecki

A Toyota RAV4 hybrid is $10,000 cheaper than a diesel Mazda CX-5 over the same period, while a Kia Stonic is about $18,000 cheaper to own and run than a similar-sized Subaru XV.

Electric car fans can save about $10,000 per year by driving an MG ZS EV as opposed to the award-winning Hyundai Ioniq 5, though it misses out on many of the bigger car’s features.