Car running costs 2017

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 manufacturer's recommended list price for the vehicle fitted with additional accessories commonly requested.

On road cost is the manufacturer’s list price as above plus dealer delivery charges, stamp duty and registration charges.

Estimated trade in value is the estimated trade in value for a five 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 12,000 km per year over a five year period.
• Ownership costs are estimated using values for 2017.
• Private ownership.
• Owner is a RACWA member.
• The cost of financing a vehicle has been used (instead of the cost of capital).

Vehicle Selection

A total of 137 vehicles were chosen for the 2017 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. The segments included were:

• Micro Cars (manual, 5 door)
• Light Cars (manual, 3 door)
• Small Cars (automatic, 4 or 5 door)
• Medium Cars (automatic)
• Large Cars (automatic, 6 cylinder engine)
• People Movers (automatic, 7 seats or more)
• Sports
• SUV Small (automatic, 2WD)
• SUV Medium (automatic, AWD)
• SUV Large (automatic, AWD)
• SUV All Terrain (automatic, 4WD)
• 2WD ute (automatic,, petrol space cab where available)
• 4WD ute (automatic, twin cab, diesel)
• Electric

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 between 6.7% and 9% (member rate) depending on the amount borrowed (see rac.com.au/finance/loan-interest-rates for details).
• 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 2016 includes:

• Vehicle licensing fee worked out on a per 100kg of vehicle mass.
• Compulsory third party injury insurance premium of $409.35 for passenger cars and $380.90 for goods vehicles.
• Recording fee of $12.10.

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 30 years.
• Garaged in the Perth suburb of Morley, post code 6062.
• Loan finance.
• RAC Standard Roadside Assistance membership at $104 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 April, 2015 to 1st April 2016, based on Fuelwatch data published by the State Government. The electricity price used is based on the Synergy Home Plan (A1) tariff. The prices used are:

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.
• 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.

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 three luxury manufacturers.

 The labour rates used for 2016 as surveyed by RAC comprise: 

• Major car dealer rate of $150.00/hour (inc GST) for the first three years. 
• Major repair franchise site rate of $123.00/hour (inc GST) for the remaining two years of ownership.