Most people prefer big cars for a whole range of reasons, whether it’s the extra room, the ability to take most of them off-road or that feeling of comfort and safety you get when driving around.
But while drivers have generally accepted the fact that they’ll have to cough up more money initially to secure one, what many may not be aware of is how much more something like a ute or SUV costs in the long run.
According to an analysis by online comparison site Finder, Australians could be paying an extra $4,550 a year just to keep a bigger car on the road. The research found that the average annual cost of owning a smaller car would come in around $3,413 compared with a whopping $7,963 for a bigger car.
The total costs included insurance, registration and petrol over the course of 12 months and, of these, vehicle registration topped the bill of being the biggest expense, with petrol coming in a close second. The analysis also found that some drivers were spending up to 133 per cent more than others on car ownership costs.
When broken down by state, the difference in costs is significant, with the price of registering an eight-cylinder Jeep Grand Cherokee in New South Wales reaching $1,274, compared with just $646 in South Australia.
NSW’s average overall costs for owning a car for one year was the highest at $8,220 in the most expensive scenario, followed by Tasmania with $8,165 and Queensland with $8,098. Meanwhile, the cheapest states to own a car included South Australia, Western Australia and the Northern Territory.
Taylor Blackburn, insurance specialist at Finder, said the difference in prices didn’t always have to be this extensive and mentioned a number of ways that Australian drivers could save on vehicle running costs. “If you want to save some cash, your car insurance premium is the best place to start. Don’t pay the loyalty tax. If you think you’re paying too much, you’re probably right. Before you let your policy rollover automatically, see what else is out there first. It could be the most cost-effective decision you make all year.”
When it comes to insurance, it might also help to have a higher excess (the out-of-pocket cost you’ll need to pay if you get into an accident) to reduce the premium payments, which come out more often. You can also reduce extras and add-ons that boost your level of coverage, as most of these might be handy in general but are not really relevant to your lifestyle.
And finally, reducing your level of risk on the roads to avoid climbing insurance premiums, crash costs, speeding fines and parking fines is also a smart way of cutting down on overall driving costs.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
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