Quick answer
The true cost of a car is the loan repayment plus everything needed to keep it on the road: registration, compulsory third party insurance (bundled with rego in most states, a separate green slip in NSW), comprehensive insurance, servicing and repairs, tyres, fuel or charging, and parking and tolls. Get real quotes for each, convert them to a monthly figure, and budget for them before you decide how much to borrow.
Key points
- Running costs can add up to more than people expect, Moneysmart warns.
- CTP is compulsory: bundled with rego in Victoria and Queensland, bought separately as a green slip in NSW.
- Stamp duty is paid when you register a new car or transfer a used one.
- Convert yearly costs to monthly and subtract them before working out a comfortable repayment.
Car ads and finance offers love a single number: the weekly repayment. But a car is a bundle of costs, and the repayment is often not even the biggest one over a year. Moneysmart’s own advice on buying a car makes the point that running costs “might be more than you think”. This guide goes through every line, explains how it works in Australia, and shows how to turn it into a monthly figure you can plan around.
Why do running costs matter before you borrow?
Because they come out of the same pay packet as the repayment. If you choose a repayment based on your spare cash and forget the running costs, the budget breaks the first time rego, insurance and a service land in the same month.
Lenders look at your expenses when they assess a loan, and they’re required to check it isn’t unsuitable for you. But the most useful check is your own. Work out the running costs first, subtract them from your spare cash, and only then decide what repayment is comfortable. That’s exactly how our car budget planner is built.
What does registration actually cover?
Registration is the fee that lets the car on public roads. It’s set by your state or territory and varies with the type of vehicle. You pay it when you register or transfer a car, then renew it, usually yearly, though shorter terms are available in some places.
When you transfer a used car you’ll usually pay a transfer fee as well. In NSW, Service NSW says you must transfer within 14 days of buying and you’ll pay a transfer fee and stamp duty, plus motor vehicle tax where it applies.
How does compulsory third party insurance work in each state?
CTP is compulsory everywhere, and Moneysmart describes it as the minimum insurance you need for registration. It covers injuries caused in a crash, not damage to cars. How you pay depends on where you live:
| State | How CTP is paid |
|---|---|
| NSW | You buy a green slip from a licensed insurer before you can register; it must be renewed before it expires |
| Victoria | The Transport Accident Commission charge is included in your registration fee breakdown |
| Queensland | CTP is paid when you register or renew through the Department of Transport and Main Roads, and you can choose your insurer |
| Other states and territories | Check your local transport authority, as arrangements differ |
The NSW regulator is clear that green slips “do not cover the cost of repairing or replacing your vehicle”. That’s what comprehensive or third party property insurance is for.
Is comprehensive insurance a must?
It isn’t compulsory by law, but it’s often a condition of a secured car loan, because the car is the lender’s security. Even when it isn’t required, comprehensive cover protects you from owing money on a car that’s been written off.
Moneysmart notes premiums depend on things like your age, driving record and location. The only reliable figure is a quote on the exact car you’re considering, so get one before you buy. Compare the excess as well as the premium.
What should you set aside for servicing and repairs?
Moneysmart says servicing, tyres and repairs can cost hundreds each year. How much depends heavily on the car:
- New cars follow a manufacturer’s service schedule. Many brands publish capped-price servicing, which makes this line easy to estimate.
- Used cars need a repair buffer on top of scheduled servicing. Ask the inspecting mechanic what’s likely to be due in the next year or two.
- Older cars deserve a bigger buffer still. Belts, batteries, suspension and brakes all wear out eventually.
How fast do tyres and wear items come around?
Tyres are a classic budget surprise. A set can be due sooner than expected on a used car, and 4WDs and heavier vehicles often use more expensive tyres that wear faster on rough roads. Check the tread before you buy (it’s on Moneysmart’s used car checklist) and include an annual tyre and brake allowance.
How do you work out fuel or charging honestly?
Use your own driving, not the brochure:
- Estimate your weekly kilometres: commute, school runs, weekends.
- Use a realistic consumption figure for the car in the conditions you drive.
- Multiply by current local fuel prices.
For an electric car, swap fuel for electricity. Charging at home depends on your electricity plan; public charging usually costs more. Moneysmart suggests EV owners budget for public charging if home charging isn’t practical. Our electric car loans page covers the rest of the EV picture.
What about parking, tolls and roadside assistance?
Small, regular amounts add up over a five-year loan. Include:
- parking at work or the station;
- toll roads you use regularly (check your toll account history);
- roadside assistance membership; and
- car washes, if you’re honest about them.
How does stamp duty fit in?
Stamp duty on a car isn’t a running cost, but it’s a one-off cost that often catches buyers out. It’s charged by your state when you first register a new car or transfer a used one. In Victoria, VicRoads says duty is based on the market value, which is the higher of the purchase price or the car’s open-market value, and low-emission passenger cars are charged at a lower rate.
If your price is drive-away, duty is usually included. If not, add it to the cost. Paying it from savings rather than the loan keeps the amount borrowed down.
How do you turn all of this into a monthly figure?
Convert everything to the same period. A simple method:
| Cost | How to convert |
|---|---|
| Yearly costs (rego, CTP, insurance, servicing, tyres) | Divide by 12 |
| Weekly costs (fuel or charging) | Multiply by 52, then divide by 12 |
| Monthly costs (parking, tolls) | Use as is |
Add them up, and that’s your monthly running cost. Now subtract it, along with your regular expenses, from your monthly take-home pay. Keep a buffer from what’s left. The remainder is the repayment you can comfortably carry.
The car budget planner does every step of this and shows whether your comfortable budget covers the amount you’d borrow, with room left for interest and fees. If the numbers work, you can see your loan options before you commit.
How can you cut running costs without cutting corners?
- Choose the car with running costs in mind. A smaller engine, a model with capped-price servicing, or an EV if you can charge at home.
- Shop insurance and CTP at renewal. Where you can choose your CTP insurer, as in NSW and Queensland, compare prices.
- Look after the tyres. Correct pressures and regular rotations extend their life.
- Keep the service book stamped. It protects resale value and catches small problems early.
- Pay one-off costs from savings. Stamp duty and accessories cost more when financed.
Buying used? Our used car loans page explains the checks that prevent expensive surprises. Considering a ute or 4WD? Ute and 4WD loans covers the higher fuel and tyre bills.
What does a full running-cost budget look like?
Here’s an illustrative layout you can copy, with your own quotes in the second column:
| Line | Your figure | Period | Monthly equivalent |
|---|---|---|---|
| Registration (plus CTP if bundled) | Yearly | ÷ 12 | |
| Green slip (NSW only) | Yearly | ÷ 12 | |
| Comprehensive insurance | Yearly | ÷ 12 | |
| Scheduled servicing | Yearly | ÷ 12 | |
| Repair buffer | Yearly | ÷ 12 | |
| Tyres and brakes allowance | Yearly | ÷ 12 | |
| Fuel or charging | Weekly | × 52 ÷ 12 | |
| Parking, tolls, roadside | Monthly | as is |
Fill it in for two or three cars you’re considering. It’s often eye-opening: two cars with similar prices can differ noticeably once insurance, fuel and servicing are added, and the cheaper car to buy isn’t always the cheaper car to own.
Know the whole cost, then borrow with confidence
When you can name every running cost and still have a comfortable repayment left over, you’re ready to look at finance. Start an application with our secure partner and you’ll see your options before you commit to anything, with a real person to help if a quote doesn’t line up with your budget. Please use the same honest income, expense and running-cost figures you worked out here, because that’s what leads to a loan that keeps working long after the new-car smell fades.
Frequently asked questions
What are the main running costs of a car?
Registration, compulsory third party insurance, comprehensive insurance, servicing and repairs, tyres, fuel or charging, and parking, tolls and roadside assistance.
Is CTP included in registration?
It depends on the state. In Victoria the TAC charge is part of the registration fee breakdown, and in Queensland CTP is paid when you register or renew. In NSW you must buy a green slip before you can register.
Does CTP cover damage to my car?
No. CTP covers injuries. NSW's regulator notes green slips don't cover the cost of repairing or replacing your vehicle; you need separate insurance for that.
When do I pay stamp duty on a car?
When you first register a new car or transfer a used one into your name. In Victoria it's based on the higher of the purchase price or the car's market value.
How do I estimate fuel costs?
Use your real weekly kilometres, the car's real-world consumption and current local fuel prices. For an EV, use your electricity costs and any public charging you'll need.
Should I include running costs when applying for a car loan?
Yes. Lenders look at your expenses, and including running costs in your own budget helps you choose a repayment you can actually keep up.