Calculating the Real Cost of Buying a New Car

  • Posted 22 Jan

Calculating the Real Cost of Buying a New Car

The overall cost of buying a new car isn’t just what’s shown on the sales sticker – the retail price makes for a large chunk of what you’re going to end up spending, but it’s not all of it.

To find the real cost of a new set of wheels you have to keep a couple of variables in mind. We’ve put together the unexpected, hidden and surprises the small print can sometimes spring on you if you don’t know what to look for.

Financing Your Vehicle

If you don’t have the budget to pay for your vehicle outright, you’re going to have to find a loan to fund your purchase. Before you sign on the dotted line, shop around for the most competitive quote.

Calculate how much you will end up paying for the loan in total – don’t limit yourself to asking whether you can afford the monthly payment. Weigh the interest rates against each other to decide if you’re getting a good deal.

Registration Fees

Each car that’s on the road in Australia is required to be registered by law. This carries a cost that differs between state and territory – while usually minimal it’s nevertheless an additional cost you should bear in mind.

If you can afford to, try to pay this registration annually rather than 6-monthly.  The Transportation department offers a discount for annual registration.


You can’t get away from having to pay insurance for your new vehicle. Many people are aware of this, but tend to forget that depending on your model, insurance quotes can vary wildly.

It all comes down to how likely your vehicle is to run into problems and where it’s stored during the day and overnight. This calculation is based on your car’s safety rating, collision damage levels and crash rating, amongst others. More expensive cars are often cheaper to insure than older models.

Compulsory Third Party Insurance (CTP)

Every registered vehicle in Australia needs CTP insurance. It protects drivers in case injury is caused to a third party. This type of insurance will not provide coverage for damaged property (including your vehicle) or injury to your own person in an at-fault accident. You cannot have registration without CTP.

Running Costs

While not a hard and fast rule, older cars will usually cost more to run. More modern vehicles are becoming increasingly fuel-efficient, meaning the running costs can be far lower. Take this into account before buying a cheaper, older model.


Not every car is created equal. Many models are notorious for requiring a lot of work and constant maintenance. Regular trips to your local garage will mount up the cost of keeping your car very quickly.

When you see a car you like, do a little bit of research on the model. You may find that going for a slightly more expensive car that’s known to be more reliable is a better bet, as your lifetime running costs will be lower compared to those initial savings.

If you need finance or some advice on the types of vehicles that best suit your needs, the team at Australian Credit and Finance and here to help. With a very experienced team, they can provide you with information about the best car’s available in the market and help you secure great loans and competitive interest rates.

  • Cost of Running a Car in Sydney
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