Have you ever wondered how much it costs to run a car?
The 2012 Vehicle Running Costs Guide can help you choose the right car to suit your budget.
The biggest running cost for cars is depreciation. It causes a drop in value when trading in your car and is often 40% to 50% of the total running cost.
Fuel and car loan interest charges are also major costs. Tyres, registration, servicing and maintenance are lower costs when spread over the life of a car. However, insurance costs can be high for young or inexperienced drivers or those with bad accident records.
Breakdown of vehicle running costs We've calculated the costs associated with operating a car in Western Australia, including depreciation. Costs are calculated for a 5-year period from new, and based on driving 15,000 kms per year on private use.
Calculation criteria
The costs of purchasing and operating a car are divided into fixed costs and running costs. The costs are shown in a number of formats:
- Manufacturer's list price
- On-road cost
- Estimated Trade in value after 5 years
- Fixed and standing and total operating costs in dollars per week
- Total operating costs in cents per kilometre
- Total annual cost in dollars
Manufacturer's list price is the manufacturers recommended list price for the vehicle fitted with additional accessories commonly requested.
On road cost is the manufacturers list price as above plus dealer delivery charge, stamp duty and registration charges.
Estimated trade in value is the estimated trade in value for a 5 year old vehicle as determined by Glass's Information services.
Fixed costs do not directly depend on how much the car is used and are incurred through 'ownership' and include registration, insurance, finance costs and depreciation.
Running costs vary according to the use of the vehicle and include fuel, regular maintenance, repairs and tyres.
Fundamental assumptions
The following assumptions have been used in calculating the operating costs:
- An operating distance of 15,000 km per year over a 5 year period.
- Ownership costs are estimated using values for 2012.
- Private ownership.
- Owner is a RACWA member.
- The cost of financing a vehicle has been used (instead of the cost of capital).
A total of 101 vehicles were chosen for the 2012 Vehicle Operating Costs survey.
The most popular vehicles from each class were chosen, in addition to other vehicles that were of interest due to innovation or iconic status. The segments included were:
- Light Cars (manual, air conditioning base model, 3 door)
- Small Cars (automatic, air condition, 4 or 5 door)
- Medium Cars (automatic, air conditioning)
- Large Cars (automatic, air condition, 6 cylinder engine)
- People Movers (automatic, air conditioning, 7 seats or more)
- Compact SUVs (automatic, air conditioning)
- Medium SUVs (automatic, air conditioning)
- All terrain SUVs (automatic, air conditioning)
- Pick-up or cab-chassis 4x2 (automatic, air conditioning, tray, petrol space cab where available)
- Pick-up or cab-chassis 4x4 (automatic, air conditioning, tray, diesel)
Running costs have been calculated for the most popular configuration within a given class.
Depreciation
Depreciation is calculated as the difference between the list price of a new car, and the trade-in value after five years and 75,000 km. On-road costs, such as dealer delivery, stamp duty, registration and new number plates, are not included in the estimated depreciation costs. The list price of a new vehicle is sourced from the manufacturer via Glass's Information Services.
The trade-in value is based on a car in average condition as determined by Glass's Information Services.
Financing costs
Loan repayments have been used to calculate operating costs. RAC found the most common car loan (through RAC Finance) is a 100% loan over a five year period.
The following assumptions have been used in calculating the cost of financing a car:
- RAC Finance car loan with interest at 8.5% (member rate).
- Total new vehicle cost is financed (including on-road costs).
- Monthly repayments over a five year period.
Registration
The cost of registering a vehicle in Western Australia for a year as at 30 April 2012 includes:
- Vehicle licensing fee worked out on a per 100kg of vehicle mass.
- Compulsory third party injury insurance premium of $245.01 for passenger cars and $226.16 for goods vehicles.
- Recording fee of $13.05.
Comprehensive insurance & RAC membership.
Comprehensive yearly insurance costs have been determined using RAC Motor Insurance premiums as follows:
- No claim bonus of 55% with bonus protection.
- Private use.
- Age 35 years.
- Garaged in the Perth suburb of Karrinyup, post code 6018.
- Loan finance.
- RAC Standard Roadside Assistance membership at $89.00 p.a.
Variable costs are calculated in dollars per week and are based on costs that vary with the number of kilometres driven, such as fuel, tyres and maintenance.
Fuel costs
The fuel price used is the Perth metropolitan average over the period 1st November, 2009 to 31st May 2010, based on Fuelwatch data published by the State Government. The prices used are:
- ULP 145.9cpl
- PULP 157.5cpl
- Diesel 153.0 cpl
- LPG 85.0 cpl
- Electricity 21.9 cents per kilowatt/hour
Fuel consumption data is taken from the Green Vehicle Guide, published by the Federal Department of Transport and Regional Services.
Tyre costs
Tyre costs are calculated using the following assumptions:
- Each set of tyres is estimated to last 45,000 km.
- The cost of another single tyre.
- Replacement costs, including fitting, balancing and wheel alignment.
- Replacement cost is the recommended retail price of suitable tyres based on:
- Original branded tyre of equivalent specification.
- Alternative brand of tyre of equivalent specification.
Includes estimates for regular servicing and unscheduled servicing and repairs.
Regular service - costs are calculated using manufacturers recommended service schedules and include a range of original equipment replacement parts.
Unscheduled servicing and repairs - includes a range of replacement parts for normal driving conditions and assumed annual distance.
Labour hours have been calculated using an average of rates quoted by dealers of seven brands in Perth, including two luxury manufacturers.
The labour rates used for 2012 as surveyed by RAC comprise:
- Major car dealer rate of $145.00/hour (inc GST) for the first three years.
- Major repair franchise site rate of $110.00/hour (inc GST) for the remaining two years of ownership.