The Real Cost of Owning a Car in 2025 – Monthly Breakdown

🚗 The Real Cost of Owning a Car in 2025 – Monthly Breakdown

Introduction: Why You Need to Know the True Cost

Car ownership in Australia has always been a balancing act between lifestyle, necessity, and financial capability. But in 2025, with inflation, shifting fuel prices, EV uptake, and rising interest rates, it's more important than ever to understand what you're really paying for.

This comprehensive guide breaks down every key expense — fixed and variable — giving you the monthly breakdown of car ownership costs in 2025.

Whether you’re buying your first car, upgrading to a hybrid, or budgeting for a second family vehicle, this budget-centric breakdown will help you make smarter financial decisions.

1. Upfront Costs vs. Ongoing Costs

Upfront Costs:

These are what you pay at the time of purchase, including:

• Purchase Price (new or used)
• Stamp Duty
• Dealer Delivery Fee
• Registration
• CTP Insurance
• Optional Add-ons (window tinting, extended warranty, etc.)

Example (2025 compact car):
New Toyota Yaris – $26,000 drive-away

Ongoing Costs:

These recur monthly or annually and include:

• Loan repayments (if financed)
• Fuel or charging
• Insurance
• Servicing and repairs
• Registration renewal
• Depreciation
• Roadside assistance
• Tolls and parking

We’ll now explore each in-depth — with real examples and Australian averages.

2. Car Loan Repayments (If Financed)

More than 70% of Australian car buyers in 2025 choose to finance their vehicles.

Average Loan Terms:

• Term: 5 years
• Interest Rate (average): 6.9% p.a. (fixed)

Example Calculation:

• Car price: $35,000
• Deposit: $5,000
• Amount financed: $30,000
• Monthly repayment: ~$595/month

💡 Tips to reduce this cost:

• Use balloon repayment option
• Consider novated lease via employer
• Opt for a certified used car

3. Insurance – Comprehensive & CTP

Car insurance costs vary based on:

• Age & gender of driver
• Driving history
• Type of car
• Location (postcode)
• Usage (private vs. business)

Estimated Monthly Costs:

• Comprehensive Insurance (average): $130/month
• CTP (Compulsory Third Party): $40/month (state-dependent)

🚘 Insurance for a 2025 Mazda 3 in Melbourne (Male, 32): ~$155/month total

💡 Tip: Compare policies annually – loyalty rarely saves you money.

4. Fuel or Electricity Costs

For Petrol or Diesel Vehicles:

• Average fuel price (2025): $2.10/L
• Average monthly usage: 1200 km
• Fuel efficiency (7.5L/100km):
  Monthly fuel cost = ~$190

For Electric Vehicles (EVs):

• Average energy use: 17 kWh/100km
• Home charging cost: $0.25–$0.30/kWh
• Monthly EV charging cost = ~$65–$85

Hybrid Cars:

• Plug-in hybrids may use 2.5–3.5L/100km when charged regularly
• Monthly cost = ~$80–$120

5. Servicing & Maintenance

Servicing varies dramatically by car type (EVs cost less long-term), brand, and distance driven.

General Estimates:

• Budget Petrol Car: $180–$250 per 10,000 km service
• SUV or 4x4: $300–$600 per service
• EV: $120–$200 per service

Monthly Average:

Petrol car: ~$50/month
EV: ~$25/month

Additional maintenance to budget for:

• Tyres (every 40,000–60,000 km)
• Brake pads/discs
• Battery replacement (for older vehicles)

6. Registration & Licensing

Registration (Annual Fee):

• Varies by state & vehicle type
• Average: $800–$1,200/year → ~$90/month

License Renewal (Spread Cost):

• ~$40–$60/year

7. Depreciation – The Hidden Monthly Cost

Depreciation is the silent budget killer.

Typical Depreciation Rates (Year 1–3):

• New Petrol Car: 15–20% annually
• Hybrid/Electric: 10–15% annually (EVs depreciate slower in 2025)
• Luxury Vehicles: Up to 30% annually

🚗 Example:
Buy a $45,000 SUV → worth ~$30,000 after 3 years
Monthly depreciation = ~$420

💡 Buy used (2–3 years old) to let someone else take the biggest depreciation hit.

8. Tolls, Parking & Fines

If you live in metro cities, these are unavoidable.

Monthly Estimates:

• Tolls: $80–$200
• Parking (daily commuters): $150–$300
• Occasional parking (weekends, events): $50+
• Fines (if unlucky!): ~$30/month average (spread)

9. Roadside Assistance

Optional but wise.

• NRMA, RACV, etc. membership: $80–$150/year
  → ~$10/month

Some new cars include 3–5 years of coverage.

10. Accessories & Car Washes

Includes:

• Car cleaning: ~$20–$50/month
• Accessories (phone mount, dashcam, mats): averaged cost = ~$10/month
• DIY detailing (products, wax): ~$10–$15/month

11. Summary – Average Monthly Car Ownership Cost in 2025

Note: EV owners could save up to $130/month on fuel and maintenance.

12. Budgeting Tips to Reduce Car Ownership Costs

• Buy used (2–3 years old) to avoid depreciation hit
• Drive economically (maintain tyre pressure, avoid harsh braking)
• Use public transport + car-share when possible
• Compare insurance annually
• DIY simple maintenance
• Bundle services like insurance & roadside for discounts

13. Alternative Ownership Models in 2025

1. Car Subscriptions

Pay a flat fee (includes insurance, rego, servicing).

Pros:

• No long-term commitment
• Great for short-term needs
• Includes everything

Cons:

• Higher monthly cost
• Limited car options

2. Car Sharing / Peer-to-Peer Rentals

Book via apps like Car Next Door or Uber Carshare.

Pros:

• No ownership burden
• Pay-per-use
• Eco-friendly

Cons:

• Less control
• Availability varies

3. Ride-hailing / Micro-Mobility

Electric scooters, bike rentals, and Uber are filling gaps.

Conclusion: Think Beyond the Purchase Price

Owning a car in Australia in 2025 can cost anywhere between $1,200 to $2,500+ per month, depending on your vehicle, habits, and location. By understanding all the hidden and visible costs — from depreciation to tolls — you're better equipped to choose the right car for your lifestyle and stay in control of your budget.

When you look beyond the shiny badge and sticker price, real financial clarity begins.