What you need to know about on-road costs
Buying a car is a thrilling experience, but don’t forget that you’re paying more than just the ticket price for your new vehicle. Most dealerships and automobile websites don’t include what’s known as “on-road costs” in the advertised price — and these costs quickly add up if you’re not expecting them. Here’s what you need to know to budget for your next car purchase.
What is an on-road cost?
“On-road costs” is a catch-all term for the extra charges you must pay before you can take your new vehicle home and drive it legally. The most common on-road costs include:
- Compulsory third party insurance
- Stamp duty
- Registration fees
- Dealership delivery charges
These costs vary from state to state, and you can’t avoid them. But, roughly, what can you expect to pay?
Compulsory third party insurance (CTP)
CTP is a legal requirement in Australia. This insurance covers third-party personal injury claims when you’re out on the road.
In many states, CTP is already included in the purchase price. However, in NSW, you need to find your own insurer, so budget for this extra cost. Make sure to do a price comparison check.
Stamp duty
Stamp duty is a state government car charge. Generally, the more expensive the car, the more stamp duty you’ll pay.
You pay stamp duty on either the car’s market value or the purchase price — whichever is higher. In NSW, this roughly works out at:
- Cars under $45,000: $3 per $100 of the car’s value
- Cars $45,000 and over: $1350 + $5 per $100 of the car’s value
If you’re buying a car in NSW, you can use this calculator to estimate your stamp duty.
Registration fees
You need to register your car in your name or your company’s name. You’ll pay this at the point of sale and must renew your registration — with an accompanying fee — every year onward. The fee varies, depending on factors such as vehicle type and whether it’s for personal or commercial use.
Dealership delivery charges
These charges include:
- Unwrapping and preparing the car
- Transportation
- Any final safety checks
- Wash and detail
It’s possible to negotiate this charge, so don’t be afraid to ask.
So, remember — when you’re haggling for the price of a car, don’t base your negotiation solely on the list price. Negotiate on the entire amount payable, including the on-road costs. Otherwise, you could end up paying far more than expected.