Just like backpacking through Europe and racking up hefty HECs debts, getting your first car and a driver’s license to go along with it is an Australian rite of passage. But with more people choosing public transport in our cities than ever before, we can’t help but wonder if the costs of owning a car could be better spent on travel that takes you a little further than the supermarket or your kids weekend sports game.

To put into perspective just how much further you can travel without a car, let’s do some calculations…

The average Australian household is spending $18,221 on transport every year [1] with 70% of that just on car loan repayments, fuel and tolls alone. That’s the same cost of taking four people on a 16-day tour of Spain, Morocco and Portugal.

Registration, CTP and license fees are all unavoidable when you own a car, whether you actually drive it or not. Even if your car sits in the garage gathering dust, you’ll still have to pay around $1633 per year according to Australian averages. That $1633 could take you on an 8-day sailing trip up the cost of Croatia with Topdeck.

Those insurance policies you’re forking out for every year? The average weekly cost for a two-car household in major cities around Australia was $22.36 in 2019. Over the course of a year, that $1,162 could take your family of four to the 4.5 star Turtle Beach resort for five nights, with spare spending money!  

Then there’s fuel, the single biggest outgoing expense when owning a car. The average Australian spends around $71.50 per week on fuel. When you do the maths, that’s $3718 per year. Where are we going with that amount of cash to splash? The Maldives, for 14-nights with an all-inclusive Club Med holiday. Yep, that’s accommodation, food, drinks, activities… everything for your entire two-week holiday or the cost of your yearly fuel bill.

What about if you’ve just bought a new car using a car loan? The average Australian interest on car loans is roughly between 6-7%. If you pick yourself up a modest $30,000 car on a five-year loan, you’ll be paying around $5,219 dollars, just in interest over the course of those five years. Would you rather pay that interest or have $1000 to spend on a flight to London or LA each year for five years?

All of these costs are not even taking into consideration the expense of a mechanical service and repairs that sit around $1468 or weekly toll costs of $59.75 equalling $3107 per year for the average Australian. Ditching both of those costs in favour or a getaway could see you relaxing and your partner relaxing on board a cruise ship sailing through the Pacific Islands for 16 nights with P&O.

On top of all of that there’s parking costs (or fines if you push your luck too far). Monthly parking spaces cost on average $385 in NSW, $371 in Victoria, $480 in Queensland and $462 in Western Australia. With the average cost of a domestic Australian holiday only costing $190.92 per night, you could be booking a weekend getaway every month of the year simply for the cost of renting a car spot. You even need to consider the potential added costs of having to rent a home that has a parking space (a parking space in Potts Point, Sydney, has sold for $264,000 in the past!).

The cost impact of car ownership is overwhelming and hard to justify when you consider all but one of the above figures are based on a single year. With improving public transport, bike-friendly road lanes popping up across capital cities and car sharing services like GoGet proving stellar value, wouldn’t you be better off ditching your car and taking a yearly holiday?

 

References:

[1] We’re Paying $700 More For Transport Than This Time Last Year, Lucy Dean, Yahoo Finance (2019)