At the time of writing, the cost of E10 petrol is around $2.50 a litre. Less than a month ago, you could get it for $1.50 a litre. That increase has occurred due to the intensifying conflict in the Middle East, which has sparked fears of a global oil supply shortage and led to a spike in crude oil prices.
For many families in the Northern Beaches, this has created extra pressure to ensure the household budget covers all costs. And it’s not really something we can cut back on because cars are essential for school drop-offs, many work commutes, grocery runs, and weekend sports activities.
In fact, it’s easy to think of your car as requiring a one-off purchase price, followed by regular fuel top-ups. But the reality is, there are a lot more costs involved that you’ll have to account for. That is why many families are starting to rethink how they manage their car expenses.
Why Is Car Ownership More Expensive Than Ever?
Aside from the current petrol situation, the cost of owning a car in Australia has been rising steadily over the last 30 years.
Cars are much more expensive now than they were before the 2000 Sydney Olympics, both in raw price and relative to inflation. Largely, this has been driven by advances in technology, safety, and the cost of manufacturing. They are, of course, much more reliable today than back then, and they have many more features, even at the entry level. However, the average cost of a brand-new entry-level car is around $25,000, which is why many families take out Azora small car loans to help them pay for the vehicle.
On top of that, services are more expensive than they were before the turn of the millennium, and car registration is dearer, too.
The Real Cost of Owning a Car in Australia
When you think about your car, it’s easy to focus on the obvious weekly expenses like fuel and, if relevant, loan repayment. But, as mentioned, there are a lot more costs involved in owning a car. Here are some things you should account for to avoid any nasty surprises.
1. Fixed Costs
Registration and insurance costs are bills every car owner incurs, regardless of whether they drive their car. The amounts will vary depending on what type of car you drive and where you live. Together, they can easily run into thousands of dollars a year and can easily catch families off guard, especially if they fall around the same time.
2. Everyday Running Costs
Costs like fuel, parking, and tolls might seem relatively small in the moment. But over weeks and months, they can add up steadily.
For Northern Beach families, these everyday running costs are usually high simply because there are more trips to manage. Activities like school runs, shopping at the plaza and weekend outings all contribute to the total.
3. Maintenance and Repair Costs
The cost of car servicing for Northern Beach families has risen significantly over the last 30 years, both in actual dollar amounts and often as a percentage of the average household income.
While vehicles are more reliable today and, in particular, require less frequent oil changes than in the 1990s, they are much more complex to fix. Additionally, rising inflation has driven up maintenance and repair costs sharply. Especially so since 2022, when the cost of repairs has climbed 26 per cent, according to the Insurance Council of Australia, primarily due to rising wages, more expensive spare parts, and longer repair times.
These costs can be hard to budget for because they will vary depending on the make and model of the vehicle you own. However, you should always account for them financially.
How Much Does a Car Really Cost Per Year in Australia?
When you combine all costs together, you might be surprised at how much it costs to own a car. According to the Australian Automobile Association’s (AAA) Transport Affordability Index for the June 2025 quarter, the average weekly cost is $461.52.
This takes into account:
- Car loan payments
- Fuel
- Car insurance
- Road tolls
- Servicing and tyres
- Registration, compulsory third-party (CTP) insurance, and licensing
- Roadside assistance
This equates to a smidge under $24,000 a year. Of course, if you are one of the 55% of Australian households who have two cars or more, then that figure will be significantly more. They are often the ones who are feeling the pinch of car ownership more than anyone else.
How Can Families Reduce Their Car Expenses?
While the cost of owning a car might be taking a huge chunk out of your weekly household budget, the good news is that there are some things you can do to ease the pressure.
They include the following:
- Planning your errands and trips more efficiently to reduce fuel use
- Get your car serviced regularly to keep it running smoothly and prevent larger repair costs
- Change to cheaper car insurance policies
- Downsize your vehicle to something cheaper to run
These changes can make a notable difference to how much you spend on your vehicle each week.
Is Owning a Car Still Worth It?
For many families on the Northern Beaches, a car is nice to have. It gives you the flexibility and independence to get around, especially in areas where public transport isn’t always available. However, whether it is still financially worth it is another matter.Ultimately, only you can decide this, based on your lifestyle and financial situation. But, it is worth noting that public transport is very cheap, and Uber rides may not be that expensive, depending on where you want to go. Therefore, if you don’t drive your car, especially a second car, that much, you might find yourself with more cash in your budget if you decide to give it up.