What you’ll pay after you buy your car
It’s more than just the sticker price. Here are the extra expenses that you might be up for before you can drive away.
Key takeaways
- Factor in extra "on-road" and ownership costs such as insurance, registration and stamp duty before committing to a car loan.
- Ongoing expenses like fuel, tolls, servicing and maintenance can quickly add up, so include them in your budget.
- Comparing car loan options can help you borrow smarter and ensure you can manage both the purchase price and running costs.
Understanding these extra expenses upfront can help you budget better, avoid financial stress after purchase and make a clearer decision about how much you should borrow or spend.
Compulsory third party insurance (CTP)
Prices vary depending on your age, type of car and state, but you must pay for compulsory third party insurance to register the vehicle. It insures against any damage you cause to other people or their property. You need to do this as soon as you purchase the vehicle.
Different providers have similar prices because CTP has to be affordable, so go with a provider that has good customer service and a strong reputation.
For example, in NSW, the average CTP cost is between $400 - $600 per year, while in VIC, it's included in the cost of registration.
Beyond CTP expenses
CTP is compulsory, but many drivers opt for additional cover such as:
- Third-party property insurance: covers damage to others' cars or property.
- Third-party fire & theft: adds protection against theft and fire damage.
- Comprehensive car insurance: covers your vehicle as well as others.
Comprehensive insurance for a standard car averages around $1,200 annually, though premiums vary widely depending on age, location and vehicle.
Registration
Again, costs vary depending on the type of vehicle and state. If you are buying the car privately, it should already be registered so you will get the remaining annual registration fee included in the purchase price.
Dealers may or may not have the car currently registered and will try to use free registration as a selling tool. Make sure you check the conditions of sale as some dealers might include registration but only for three months, not a full year.
Stamp duty
Stamp duty is charged by the state in which the car is registered. Amounts vary depending on the vehicle type and state. Expect to pay at least 3% of the sale price or average market value, whichever is more. You will pay when transferring registration into your name. Make sure you do the transfer quickly as extra fees are charged after two weeks.
Each state applies different stamp duty rates. For example, in NSW you'll pay $3 per $100 on vehicles under $45,000. For passenger vehicles valued over $45,000 you will page $1,350 plus $5 per $100 for the vehicle's value over $45,000, while in QLD the rate varies from $2 to $6 per $100 depending on how many cylinders the vehicle has.
Low-emission cars may qualify for reduced or waived rates. Always check your state transport authority's calculator before purchase.
luxury car tax
If you are buying a fairly expensive car, then you might be subject to luxury car tax. There is no way to avoid paying this tax which, for the 2025 - 2026 financial year, is 33% for every dollar over $80,567, while fuel efficient vehicles have a higher threshold set at $91,387.
Dealer-delivery costs
New car dealers charge dealer-delivery fees. You don’t get anything extra for paying this, it’s just another way for dealers to increase their margin on the sale.
Modifications
If you’re buying second hand, you might need to upgrade some of the car’s equipment or purchase devices to make your driving experience more enjoyable. Perhaps it's a new sound system that has Bluetooth connectivity or a navigation device. Floor mats and seat covers are common extras that you can easily overlook during the sales process.
Petrol
Fuel is the biggest ongoing cost of owning a car. According to the Australian Automobile Association, fuel costs average $93.36 per week for the typical household as of Q1, 2025. The type of car you buy - petrol vs hybrid vs EV - will make a major difference to ongoing running costs.
Toll device
If you live in a major city, then you will undoubtedly use toll roads. Most tags require a deposit to be paid and money to be put into the account upfront.
If you are borrowing to pay for the car, you can usually get the large purchasing costs included in your loan. If you’re paying cash, make sure you factor them into your budget so you don’t come up short post sale.
As always, make sure you understand the contract before you agree to purchase a car. Dealers may or may not include these extra costs in the purchase price even if the deal includes on-road costs.
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