Thinking of buying a car in Australia this year? Whether it’s a new hybrid, a used ute, or a city hatchback, the costs don’t stop at the sale price. Australians often underestimate the ongoing expenses tied to owning a vehicle—from stamp duty and rego to fuel, insurance, and depreciation. In this guide, we break down what you’re really paying for in 2025 so you can budget like a pro and avoid the surprise expenses that catch most buyers off guard.
Purchase Price vs. On-Road Costs
When you’re looking at car listings—on platforms like Carsales, Gumtree, or Drive—the advertised price is usually just the beginning. In Australia, the final “driveaway” cost can be significantly higher due to a mix of compulsory fees and dealer charges. For example, if you’re buying a $35,000 car, expect to spend closer to $40,000 once everything’s tallied.
Here’s what adds up:
- Stamp Duty – This varies by state and vehicle price. In NSW, you’ll pay more if your car costs over $45,000.
- Registration and CTP Insurance – Required to legally drive, rego and compulsory third-party insurance can cost over $1,000 annually in states like Victoria.
- Dealer Delivery Fees – Often buried in the fine print, these charges range from $1,500 to $3,000 depending on the dealer.
- Luxury Car Tax (LCT) – Applies if the car’s value exceeds a certain threshold—especially relevant for EVs and European brands.
If you’re comparing a petrol Corolla to an entry-level Tesla Model 3, know that EV incentives help offset LCT in some states, but other fees like installation of a home charger may apply. Used cars bought privately can avoid dealer delivery fees but still attract transfer duties and a fresh rego bill.
Insurance Premiums: What Drives the Price
Car insurance is a recurring cost that’s often misunderstood. In 2025, insurance premiums in Australia have climbed due to rising repair costs, weather-related claims, and changing risk models used by insurers. What you pay depends on your age, suburb, driving history, and even your car’s colour or engine type.
Key drivers of insurance cost:
- Your Location – A driver in inner Sydney or Brisbane will likely pay more than someone in Hobart or Geelong.
- Car Type and Usage – Insuring a performance SUV or luxury sedan will always cost more than a used hatchback.
- Coverage Type – Comprehensive coverage includes theft and accidents but is significantly pricier than third-party only.
- Driver Profile – Young drivers (under 25) and those with previous claims often face higher excess and steeper premiums.
For instance, a 30-year-old in Adelaide might pay around $1,100 annually for full cover on a Mazda CX-5, while a 21-year-old in Melbourne with the same car could face premiums well above $2,000. Price comparison tools like Compare the Market or Canstar are essential in 2025 to lock in the best value.
Fuel and Energy Costs: Petrol, Diesel, or Electric
One of the biggest ongoing expenses in 2025 is what it takes to keep your vehicle moving. Whether you’re topping up a diesel ute, fuelling a city hatchback, or charging an electric SUV, the cost of energy is unavoidable—and increasingly variable across states and regions.
Breakdown by fuel type:
- Petrol – Averaging $2.00–$2.20/L in major metro areas, petrol is still dominant but sensitive to global supply chains.
- Diesel – Slightly higher per litre, but often more efficient for long-distance or load-heavy vehicles.
- Electricity – Charging an EV at home on off-peak rates may cost as little as $0.20/kWh. Public fast-charging stations can charge 3x that.
For most commuters:
- A small hatchback might consume $50–$70 in petrol per week.
- An EV like the BYD Atto 3 might only cost $10–$15 per week in home charging.
- Diesel 4WDs and utes used in regional areas can cost upwards of $100 per week, especially if heavily loaded.
While EVs offer lower running costs, upfront prices and charger access still limit their adoption in some parts of Australia. That said, 2025 has seen record uptake thanks to improved battery range, state rebates, and more public charging networks.
Maintenance and Repairs: The Hidden Bill
Every car needs upkeep, but how much you’ll spend each year can vary dramatically based on the vehicle type, brand, age, and how well it’s driven. In 2025, Australians are seeing maintenance costs rise due to increased labour rates, supply chain issues, and a greater reliance on dealership servicing for newer models—especially hybrids and EVs.
Here’s what to factor in:
- Scheduled Servicing – Most new cars require servicing every 10,000 to 15,000 km. Brands like Toyota or Kia often offer capped-price servicing plans, while luxury brands like Audi or BMW can charge $500–$1,000+ per visit.
- Wear-and-Tear Items – Tyres, brakes, batteries, filters, and wipers all add up over time. A full set of tyres for an SUV can cost $800–$1,500, and hybrid battery replacement (post-warranty) could reach $3,000–$5,000.
- Unexpected Repairs – Out-of-warranty vehicles or those with complex features (e.g., autonomous driving aids) can trigger costly diagnostic and part replacement bills.
Used vehicles may save you upfront, but they often incur higher maintenance costs. Make sure to get a pre-purchase inspection and check if the car’s service history is complete—especially when buying privately on Carsales or Facebook Marketplace.
Depreciation: The Silent Wallet Killer
Depreciation is the biggest cost most Australians never think about—until it’s time to sell. It’s the amount your car’s value drops each year, and in 2025, it’s hitting faster thanks to tech upgrades, EV adoption, and the oversupply of used cars post-lease or fleet sale.
Typical depreciation patterns:
- New Cars – Lose 10–15% the moment you drive off the lot, and up to 40% within 3 years.
- Luxury Vehicles – Brands like Mercedes-Benz or Jaguar may lose up to 60% of their value in 5 years.
- Slow Depreciators – Models like Toyota Hilux, Mazda CX-5, and Subaru Outback tend to retain strong resale value.
To minimize your loss:
- Buy a 1–2 year old certified used car where depreciation has already hit.
- Choose popular models with high resale demand.
- Avoid heavy mods that hurt resale (e.g., loud exhausts or oversized wheels).
While EVs are starting to hold value better than in previous years, resale depends heavily on battery condition and warranty status.
Registration, Licensing, and Road Fees
These annual and usage-based charges can really add up, especially for city dwellers or drivers using toll roads frequently. Every Australian state has its own rego fee structure, and in 2025, many have updated rates to reflect vehicle weight, fuel type, and emissions.
State-based registration examples (approximate annual costs in 2025):
| State | Small Car | SUV/4WD | EV Discount |
|---|---|---|---|
| NSW | $780 | $1,050 | Yes (partial) |
| VIC | $850 | $1,100 | Yes |
| QLD | $720 | $980 | Yes |
| WA | $690 | $940 | Limited |
Additional ongoing fees:
- Toll Roads – Sydney, Melbourne, and Brisbane drivers face up to $10 per day on toll-heavy commutes.
- Licence Renewals – Typically $100–$200 every 3–10 years, depending on state and duration.
- Inspections – Required in some states when transferring ownership or renewing rego for older vehicles.
If you drive an EV, you may get rego discounts, but some states (like Victoria) have introduced a per-kilometre road usage charge for zero-emission vehicles to offset lost fuel excise. Make sure you know what applies based on your state and car type.
Parking and Fines: The Urban Tax
If you live or work in an Australian city, parking isn’t just a challenge—it’s a regular drain on your wallet. In 2025, parking fees and fines are some of the most underestimated car ownership costs, particularly in dense metro areas like Sydney, Melbourne, and Brisbane.
Here’s what you’re up against:
- Metered Street Parking – Rates in Sydney CBD now reach $8.20/hour during peak periods. In Melbourne, expect $5–$7/hour depending on zone.
- Private and Council Car Parks – Daily parking can cost $30–$50 near business hubs, airports, and shopping districts.
- Residential Permits – While cheaper, they may come with limitations. Some councils charge $150–$300/year for residential parking passes.
- Fines – Common offences include expired meters, no-stopping zones, and illegal parking during school times. Fines start at $116 in NSW and rise quickly with repeat violations.
To manage these costs:
- Use parking apps like Parkopedia or EasyPark to find cheaper or off-peak slots.
- Consider monthly contracts with private parking operators if commuting regularly.
- Some EVs are eligible for discounted or even free parking in select councils—check your local regulations.
While parking doesn’t seem like much on its own, regular urban driving can quietly cost you over $2,000 per year if unmanaged.
Financing Costs: Interest, Fees, and Loan Traps
Most Australians don’t pay for their cars outright—especially new ones. Instead, they finance through bank loans, dealership offers, or novated leases. But in 2025, rising interest rates and hidden charges mean your financing method could be the most expensive part of the deal over time.
Breakdown of common finance types:
- Bank Loan – Fixed or variable interest. Typical rates in 2025 range from 6.5% to 9.0% depending on credit score and loan term.
- Dealership Finance – May offer low “headline” rates (e.g., 1.9%) but with inflated car prices or hidden balloon payments.
- Novated Lease – Often used for company cars, includes bundled costs like rego, insurance, and servicing through salary sacrifice.
Example: On a $40,000 loan over 5 years at 8% interest, you’ll pay roughly $8,600 extra in interest alone.
Tips to save:
- Get pre-approval from your bank or credit union before visiting a dealership.
- Use comparison sites like Finder or RateCity to benchmark offers.
- Watch out for early termination fees, setup costs, and mandatory insurance tie-ins.
Financing makes car ownership accessible—but if you don’t run the numbers properly, it could turn a $40K vehicle into a $50K mistake.
Optional Extras and Accessories: Worth It or Waste?
When you buy a car—especially from a dealership—you’ll be offered an entire buffet of extras: extended warranties, paint protection, ceramic coating, window tint, dash cams, floor mats, and more. But in 2025, many of these add-ons come at inflated prices with questionable long-term value.
Here’s a look at common extras:
- Extended Warranties – May cost $1,500–$2,500 but often mirror coverage you already get under consumer law.
- Ceramic Coating or Paint Protection – Dealers charge $800–$1,500, but the same service may be half the price at an independent detailer.
- Tow Bars, Roof Racks, and Bull Bars – Can be worth it if you actually use them, especially in regional areas or for weekend getaways.
- Tech Add-ons – Integrated dash cams or aftermarket infotainment systems are now easier to install and often cheaper outside the dealership.
What to do:
- Ask if the accessory or warranty is dealer-installed or manufacturer-backed—there’s a big difference in quality and coverage.
- Get quotes from third-party installers or auto specialists before signing the dotted line.
- Focus on extras that improve resale value or serve a real functional purpose—not just the dealership’s profit margin.
Sometimes, less is more. Buy what you’ll use, skip what you won’t, and keep your ownership costs from creeping up unnecessarily.
