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Owning a new car is exciting. There’s the new car smell, the shiny paint job without any scratches or dings, the tiny numbers on the odometer and all of the new buttons to press. The first few months of ownership truly are a honeymoon period, and if you’re lucky, the love affair between you and the car will last for some time to come.

Of course, like any relationship, there are some realities to consider.

When buying a new car, people can often forget to take into consideration the ongoing or unexpected costs of owning the car.

On Road Costs

First up, there are the costs of getting the car out of the dealer’s door. A Dealer Delivery charge is set at the discretion of the dealer, and it’s usually there to cover the costs of items such as detailing, compliance, administration, insurance and holding. Stamp Duty is a State government charge, the price of which varies from state to state.


Then there the extras that can bump up the purchase cost. Things like auto transmission, metallic paint, reverse cameras, window tinting and the like. These are hard to resist and often are perquisites for some people, so the costs should be factored in when an item is essential to you.

Annual and Ongoing Costs

The annual and ongoing costs are the ones that are most often omitted from the buyer’s budgeting process. For an accurate understanding of the true cost of car ownership, these should be factored in from the start.  

Annual Costs include:

  • Roadside assistance
  • Registration
  • Insurance

Ongoing costs include:

  • Petrol: a car won’t go without gas in the tank, so think about your likely consumption, and factor that in.
  • Servicing and maintenance: servicing a car can add big bucks to the cost of your car, even with capped price servicing. Capped pricing deals are technically still variable, and they exclude a number of items such as brake pads. Some dealers are now offering pre paid or free servicing, so keep an eye out for those.
  • New tyres: the tyres are going to need to be replaced every few years, and they don’t come cheap.
  • Replacing hi tech items: ever lost a set of keyless entry keys? It’s an expensive exercise to replace them, and can cost between $400 and $800 dollars.
  • Parts and repairs: a car is a car, which means some things will break, and will need fixing. Items that are outside of warranty can cost you, and if you happen to be as unlucky as to crash your car, there are the costs of repairs, insurance excess and car hire to consider.
  • Depreciation: most cars go down in value the minute they are driven off the showroom floor. Unless they are a collectable, this depreciation will continue throughout the life of the car. High kilometres on the car will exacerbate the problem.

Being aware of these hidden costs will help you budget and better understand what car you can truly afford.  

There are some ways to reduce these costs, such as shopping around for insurance and driving efficiently to reduce wear and tear. Rolling some of the items such as petrol and servicing into a salary packaging arrangement is also another way of reducing the overall cost of a car.

If you’d like to find out more about ways to reduce your car ownership costs, talk to National Salary Packaging. We’re the experts in saving you money, and we’re always on your side.

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