Cost of living pressure is still weighing on Australian households, and interest rates are a big part of it. Compare the Market research from July 2026 found two thirds of Australians would be worse off if the RBA lifts the cash rate again this year, with 17% saying it would add to their financial stress or anxiety. The Reserve Bank of Australia (RBA) did exactly that in September, raising the cash rate to 4.60%.
For most households, the car is one of the biggest costs to carry. The Australian Automobile Association (AAA) estimates a typical two-car household in the capital cities spends $479.45 a week on transport, or almost $25,000 a year, as of Q2 2026. Between rego, insurance, running costs and finance repayments, the true cost of owning a car in Australia adds up fast.
Car registration costs
Registering your car is mandatory, 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 licensing depends on where you are in Australia:
As you can see, not all states or territories offer one, five and ten-year renewal options. South Australia is the only one 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 $94.65, which is almost half the cost of ten-year renewals in the Northern Territory ($210).
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. They depend not just on where you live and your car, but on 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 or diesel. 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 and a half 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 residents of country towns tend to pay more for fuel than in capital cities.
Fuel prices have remained consistently high in the years since the COVID-19 pandemic. However, we’re seeing this cost reach new heights as the conflict in the Middle East goes on.
Australia is towards the higher end of the scale when it comes to petrol prices among G20 nations. As of September 2026, Singapore’s petrol was setting them back US$3.46 per litre, compared to our US$1.67. Indonesians enjoyed the cheapest petrol in this period, paying just US$0.56 per litre.
Car loan repayments
Car finance is essential for plenty of Australians to get into their new set of wheels. Although the value of new fixed term loan commitments for the purchase of a road vehicle has started to fall, it still sat at $4.662 billion in Q2 2026.
Car loans themselves come in all shapes and sizes, depending on the car you’re buying and your preferences as a borrower. Across the 2025-26 financial year, the average car loan taken out through Savvy was $37,346 over five years, with an average rate of 12.72% p.a. (inclusive of all credit scores). You can see the breakdown of the average car loan repayment for different types of car finance here:
| Types of car loans | Loan amount | Loan term | Interest rate | Monthly repayment | Interest payable |
|---|---|---|---|---|---|
| All car loans | $37,346 | 5 years | 12.72% p.a. | $844 | $13,318 |
| New car loans | $51,417 | 5 years | 9.80% p.a. | $1,087 | $13,827 |
| Used car loans | $33,257 | 5 years | 13.43% p.a. | $764 | $12,585 |
| Bad credit car loans | $30,905 | 5 years | 17.47% p.a. | $776 | $15,649 |
| Interest rates based on average rate available for each profile type through Savvy in the 2025-26 financial year. 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. | |||||
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."
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 occurs each year or every 10,000 km 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 |
|---|---|---|
| 2026 Ford Ranger XL | $269 to $319 | $645 |
| 2025 Toyota RAV4 GX | $269 to $319 | $329 |
| 2024 Mazda3 G20 Pure | $269 to $319 | $523 |
| 2022 Hyundai Santa Fe | $269 to $319 | $450 |
| Quote obtained from mycar Tyre & Auto on 2 October 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 them. 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 Q2 2026, which totals $3,120 per year.
Over that same period, Brisbane residents paid between $25.32 and $26.00, while the outlay from Melburnians rose slightly each quarter from $24.80 to $26.64. 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 $525.62 per week in Q2 2026. In the same quarter, Melbourne ($493.10) and Canberra ($456.49) are the next most expensive. Hobart is the cheapest at $419.99 per week, just ahead of Adelaide ($423.06).
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 Q2 2026, transport costs make up 17.7% of Hobart household incomes, comfortably higher than Darwin (16.1%) and Melbourne (15.1%). By this measure, Canberra (13.5%) and Adelaide (13.8%) are the cheapest places to own a car.
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.
So, how much does it cost to own a car?
According to Savvy’s analysis, the annual cost of owning a car in Australia today is $22,085, which works out to $425 per week. You can see how this is all broken down (and how it compares to the same numbers from five years ago) in the table below:
| 2021 | 2026 | |
|---|---|---|
| Registered vehicles | 20.1 million (Jan 2021) | 22.3 million (Jan 2025) |
| Average car loan | $34,197 | $37,346 |
| Average monthly car loan payment (five-year term) | $761 | $844 |
| Average weekly cost of car rego and licensing | $29.27 (Q1 2021) | $34.01 (Q2 2026) |
| Average weekly cost of fuel | $68.02 (Q1 2021) | $101.26 (Q2 2026) |
| Average weekly cost of car insurance | $24.95 (Q1 2021) | $51.79 (Q2 2026) |
| Average weekly cost of servicing and tyres | $29.72 (Q1 2021) | $35.28 (Q2 2026) |
| Average weekly cost of tolls | $12.89 (Q1 2021) | $7.51 (Q2 2026) |
| Average weekly transport cost | $340.55 | $424.71 |
| Average annual transport cost | $17,708.76 | $22,084.88 |
| Average car loan amount and repayments based on average amounts and interest rates approved through Savvy in 2021 and 2026. Calculations assume car loan repayments are made monthly, with the annual cost divided evenly by week. All other costs based on AAA data, correct as of Q2 2026. | ||
It’s clear that the financial landscape has changed a heck of a lot since the COVID-19 pandemic. Australian families are forking out plenty more for their car in 2026 than they were at the start of 2021, to the tune of over $75 per week. That adds up to almost $4,400 extra per year that Aussies are paying since COVID-19, which represents an increase of 24.7% over that time.
If you’ve paid off your car loan, though, that proportional increase is far greater, with the weekly cost increase of $65 and annual change of $3,380 adding up to a 39.4% hike for the average car owner.
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 Q2 2026 have it at 3.2% (it 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 dropped down to 3.60% in 2025, it’s gone back up to 4.60% after four hikes since February.
- 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 a huge chunk of Australia’s cars off the road. However, as Aussies returned to the office, the amount they were spending on transport spiked. According to CommBank’s Household Spending Intention Index, transport spending jumped by 19% in March 2023.
