There’s no doubt that Aussies all around the country have been feeling the pinch when it comes to the cost of living. A 2025 survey by Compare the Market found that 48.7% of Australians have experienced anxiety or depression due to financial pressures, whether worsened or for the first time.
One such cost that most will have to juggle is their car. According to the Australian Automobile Association (AAA), 15.6% of Australian incomes are spent on transport costs. Between your car rego, insurance, running costs and your finance repayments, there’s probably more to wrap your head around than you realise. For that reason, it’s crucial to take a look at what the cost of owning a car in Australia actually is in 2026.
Car registration costs
Registering your car is mandatory in all cases, with the cost depending on the state or territory that you’re living in. Each government has its own formula for determining how much you’ll pay to register your car. You can see the factors that play a role and the minimum and maximum amounts across Australia in the table below:
Car licencing costs
It isn’t just about registering your car, but also registering yourself as a driver that you’ll need to factor into your spending. Like car rego, the cost of licencing depends on where you are in Australia:
South Australia is the only state or territory where you can choose any year between one and ten to renew your licence, but it’s far and away the most expensive for renewals of five years or more. For one-year renewals, Queensland drivers are slugged the most at $91.55, which is almost half the cost of ten-year renewals in the Northern Territory ($204).
Car insurance costs
Car insurance is another crucial cost to budget for. Having the right insurance for your vehicle can give you greater peace of mind that you’re covered for a variety of events, whether that’s damage to other people’s property or your car itself. If you’re financing your vehicle, comprehensive car insurance is mandatory.
Although there’s a wide range of factors that impact the cost of your car insurance policy, here are some example quotes from around Australia:
Of course, all car insurance quotes are different, varying greatly depending not just on where you live and your car, but your profile, such as your age, employment, claims history, whether you own your home and how much you drive. As a result, the averages above don’t necessarily mean that you’ll be offered the same or similar premium when you get your quote.
Fuel costs
Another essential cost to budget for is fuel, whether that’s petrol, diesel or charging for your EV or plug-in hybrid (PHEV). You can see how much Aussies are paying per week on average across capital cities and regional centres and how they’ve changed over the last three years here:
Aside from Townsville and Wagga Wagga, the regional centres are comfortably more expensive for drivers on average. This is a noted phenomenon in Australia, where country towns have recently been paying as much as 25% extra for fuel.
Although fuel prices have remained consistently high in the years since the COVID-19 pandemic, Australia is around the middle of the pack when it comes to petrol prices among G20 nations. As of December 2025, Singapore’s petrol was setting them back US$2.84 per litre, compared to our US$1.20. Indonesians enjoyed the cheapest petrol in this period, paying just US$0.60 per litre.
Car loan repayments
Car finance is essential for plenty of Australians to get into their new set of wheels. The rate of borrowing has never been higher than now, either, with a record $4.919 billion taken out in new fixed term loan commitments for the purchase of a road vehicle in Q3 2025.
Car loans themselves come in all shapes and sizes, depending on the car you’re buying and your preferences as a borrower. Across 2025, the average car loan taken out through Savvy was $37,049 over five years, with an average rate of 12.59% p.a. (inclusive of all credit scores). You can see the breakdown of the average car loan repayment for the average loan and other car finance here:
| Type of car loan | Ave. loan amount | Ave. loan term | Ave. interest rate | Ave. monthly repayment |
|---|---|---|---|---|
| All car loans | $37,049 | 5 years | 12.59% p.a. | $835 |
| New car loans | $52,956 | 5 years | 8.99% p.a. | $1,099 |
| Used car loans | $33,891 | 5 years | 11.27% p.a. | $741 |
| Bad credit car loans | $29,869 | 5 years | 18.74% p.a. | $771 |
| Interest rates based on average rate available for each profile type through Savvy in 2025. These aren’t necessarily reflective of the rates you’ll receive on your car loan. Calculations are for illustrative purposes only and don’t include costs such as loan fees, motor vehicle duty or other government charges. | ||||
Servicing, maintenance and running costs
Part of keeping your car on the road is making sure everything’s running the way it ought to. Getting your car serviced each year is a must for maintaining its warranty, in addition to the peace of mind that it brings. Your manufacturer will set out the schedule to follow, which usually will occur each year or 10,000km to 15,000km on the odometer (whichever comes first).
Here are some quotes from a major Australian servicing retailer for different models:
| Model | Basic servicing | Logbook servicing |
|---|---|---|
| 2025 Ford Ranger | $249 to $299 | $489 |
| 2025 Toyota RAV4 | $249 to $299 | $312 |
| 2022 Hyundai i30 | $249 to $299 | $605 |
| 2020 Mazda6 Sport | $249 to $299 | $362 |
| Quote obtained from mycar Tyre & Auto on 7 January 2026 and based on a model last serviced (or purchased) 12 months prior with 12,000km per year on the odometer. | ||
Car servicing quotes vary depending on a range of factors, such as the make and model of your car, its age, its condition and how far along in the servicing schedule it is. Different mechanics will have different pricing for both basic and logbook servicing, so it’s important to look around and get a few quotes to find the best price for your car.
It isn’t just servicing that you’ll need to think about when keeping your car on the road, though. You’ll also have to budget for:
Tyres
Getting around on four wheels means you have to actually look after the wheels. Tyres lose their tread over time, so you’ll need to keep an eye on them with a view to replacing them every few years (depending on how much you drive).
The cost of your tyres will depend on the type you buy. According to Tyrepower, there are three main categories to choose from:
- Budget tyres: approximately $100 to $150 per tyre
- Mid-range tyres: approximately $150 to $300 per tyre
- Premium tyres: approximately $300 to $500 per tyre
Naturally, larger models will require larger, more expensive tyres than smaller vehicles, so you can expect to pay more if you own a four-wheel drive or large SUV.
Tolls
While tolls don’t affect everyone, those living in (or commuting to) Sydney, Melbourne, Brisbane or the Gold Coast will know the pain all too well. The AAA reports that Sydneysiders paid an average of $60.00 per week from Q3 2024 to Q3 2025, which totals more than $3,000 per year.
Over that same period, Brisbane residents paid between $25.32 and $26.00, while Melburnians forked out $24.80 to $25.84, which rose slightly each quarter. If you’re living in one of these cities and want to avoid getting slugged, Google Maps will show you how much different routes will set you back and any potential ways to get to your destination without paying any tolls.
What is the most expensive city to own a car in?
According to the AAA, the most expensive place to own and operate a car in Australia is Sydney, which peaked at a cost of $515.70 per week in Q3 2024. As of Q3 2025, Melbourne ($480.81 per week) and Canberra ($454.72) are the next-most expensive. Hobart is the cheapest at $408.77 per week, just ahead of Adelaide ($409.36).
Sydney’s place atop this ranking is hardly surprising, given that it’s considered the most expensive place to live in terms of housing on a range of key metrics. However, it’s worth noting that, when taken as a percentage of income, the NSW capital is actually below average.
As of Q3 2025, transport costs make up 17.5% of Hobart household incomes, comfortably higher than Darwin (15.5%) and Melbourne (14.8%). By this measure, Adelaide (13.7%) is the cheapest place to own a car.
Outside of car loan repayments, is a new or used car cheaper to run?
In terms of the running costs of the car, there are trade-offs for both new and used cars. For example, brand-new models are likely to be more fuel efficient and require less frequent repairs and maintenance. However, because your car is more valuable, you’ll probably pay more in car insurance and potentially in repairs if it’s damaged.
What to think about when choosing your car
"Many people focus on getting the lowest interest rate, but that's only half the story. A loan with fewer fees, flexible repayment options or no early exit penalties can often save you more in the long run. Don't just ask 'what's the rate?'; find out what the total cost of the car loan will be over its life."
How much have car costs gone up since 2021?
It’s clear that the financial landscape has changed a heck of a lot since the COVID-19 pandemic. We’ve seen prices rise dramatically across the board, and cars are no exception.
Australian families are forking out plenty more for their car in 2026 than they were at the start of 2021, to the tune of $54 per week. That adds up to more than $2,800 extra per year that Aussies are paying since COVID-19, which is an increase of 15.9%.
That number is even greater for those who’ve paid off their car loan, though, with the additional $37 outlay per week adding up to over $1,900 extra at an increase of 22.4% since the start of 2021.
The importance of comparing rates before applying for car finance
"Although numerous factors have impacted debt levels across the country over the last five years, interest rates are undoubtedly a significant one. Unlike some of these unavoidable costs, though, there’s a huge number of options to compare that could help you save big time. That’s why, when it comes to financing your vehicle, you shouldn’t just apply to the first bank you see."
You can see how much the numbers have changed over the past five years here:
| 2021 | 2025 | |
|---|---|---|
| Registered vehicles | 20.1 million (Jan 2021) | 22.3 million (Jan 2025) |
| Average car loan | $34,197.42 | $37,049.36 |
| Average monthly car loan payment (five-year term) | $761.38 | $835.22 |
| Average weekly cost of car rego and licencing | $29.27 (Q1 2021) | $33.90 (Q3 2025) |
| Cost of fuel (five largest cities) | 133.4 cpl (Q1 2021) | 178.8 cpl (Q3 2025) |
| Average weekly cost of fuel | $68.02 (Q1 2021) | $93.18 (Q3 2025) |
| Average weekly cost of car insurance | $23.47 | $29.59 |
| Average weekly cost of servicing and tyres | $29.72 (Q1 2021) | $35.91 (Q3 2025) |
| Average weekly cost of tolls | $12.89 (Q1 2021) | $7.46 (Q3 2025) |
| Average weekly transport cost | $341.17 | $395.31 |
| Average annual transport cost | $17,741.02 | $20,556.08 |
So, why has everything gone up so much? There’s a whole range of reasons for the spike in costs, including:
- Wage growth: annual wage growth has increased substantially in the last five years. As of Q1 2021, this sat at 1.5%, but the latest figures from Q3 2025 have them at 3.4% (they peaked at 4.3% in Q4 2023).
- National cash rate: during the pandemic, the cash rate was lowered to 0.10% by the RBA. This means rates across the board were at basement levels. As inflation kicked in, though, that rate was cranked back up to 4.35%, bringing up the price of everything else with it. Although the rate has since come back down, hikes are predicted again this year.
- Increase in labour and material costs: a byproduct of inflation is that the cost of parts and labour has skyrocketed. That means people are paying more to get their cars serviced and repaired. Supply chain blockages throughout the pandemic also resulted in more people buying used cars, which increased the need for repairs and servicing.
- Remote work and returning to the office: at the height of nationwide lockdowns, people obviously used their vehicles much less. Remote working surged, taking the majority of cars off the road. However, as Aussies returned to the office, the amount they were spending on transport obviously spiked. According to CommBank’s Household Spending Intention Index, transport spending jumped by 19% in March 2023.