Is it worth owning a car in Canberra?

Karyn Starmer 13 April 2021 70
Parked cars

The average Canberra car sits idle for 90 per cent of the week. Photo: File.

While Canberra is not a big city, it is relatively spread out so there is a common assumption that everyone needs a car to get around.

Do you depend on a car in Canberra? And if you live in one of Canberra’s inner suburbs, would ride sharing suffice? Or if you live further out, could you get away with having just one car in the driveway?

Owning a car involves a significant capital outlay for its purchase price – whether it be new or used – and then there are the thousands of dollars spent every year to register, insure and maintain the vehicle, all while most cars sit parked for 90 per cent of the time.

Unless you are a parent ferrying multiple children around the city, or you use your car for work, your expensive piece of capital just sits idle.

Curious to find out if it is worth owning a car, RSM Financial Services Australia crunched the numbers and the results are interesting.

RSM senior financial advisor Chris Oates and para planner Ross Trimboli say they started their calculations with basic running costs and assuming travel of less than 20,000km per year.

“For the average Canberran who travels 35km per day, we calculated the total running cost of a car to be approximately $16,000 a year,” says Chris. “This includes fixed costs such as registration, insurance and servicing – we calculated these at $4000 a year. Then we added $8000 a year for fuel and other running costs, and then $4000 a year for parking.”

Chris says for Canberrans who live in the inner suburbs and working in the city, the fixed cost of owning a car is much less, calculating registration, insurance, fuel and parking to be approximately $8000.

It should be noted these figures do not include the purchase price, loan repayments, interest or depreciation on the capital cost of the car.

In summary, cars are expensive.

Now, if you choose to use one of the orange or purple e-scooters populating our city, the costs when compared to a car are significantly less.

Back to our average Canberran who is travelling 35km a day, RSM calculated the cost of using an e-scooter at approximately $15,000 a year, and for those inner-suburb types, travelling to and from the city from Kingston, Yarralumla or Turner, for example, the cost would be approximately $5000.

But what about the shopping or if it is raining? Chris and Ross say the cost of ride-sharing for the average Canberran would be $21,000 to use an Uber every day to get to and from work, and for people in the inner suburbs it would be around $5000.

RSM Canberra's Chris Oates and Ross Trimboli

RSM senior financial advisor Chris Oates (left) with para planner Ross Trimboli (right). Photo: Michelle Kroll.

So if you are an average Canberran, the cost comparison is $16,000 for a car, $15,000 for an e-scooter, and $21,000 for ride share.

“Obviously the car wins in this case,” says Chris. “But if you currently have two cars in your household and one of those only gets used on weekends, there is a good case for substituting that second car for ride share or a scooter.”

Ross adds: “If you can arrange to car pool to work, leaving the car for the other member of your household, the argument for a second car really diminishes.

“We did not calculate the cost of public transport for this exercise, but you can safely assume the cost is less than ride share so if you mix the use of one car, public transport and ride share between a couple, not owning that second car could save thousands.”

Living in the inner suburbs, the argument for not owning a car becomes stronger.

“With the annual cost of a car for someone living in the inner suburbs at $8000, against $5000 for a scooter and $5000 for ride share, you would really have to look at your lifestyle and freedom to justify owning a car,” says Chris.

“It really surprised us how much it costs to have a car. Although if you live in Canberra’s outer suburbs, we drew the conclusion that it makes financial sense to own a car, but maybe not all households need a second car. It could be cheaper to car pool and do the odd Uber trip.

“But if you live in the inner suburbs, if you are not going to use your car, it is probably not worth owning it.

“Obviously you are paying for the convenience of having your own transport parked outside your home, but cars swallow up a big portion of your pay and it is important to think about the long-term costs.”

RSM are financial advisers and auditors for Canberra businesses and individuals. For more information, visit RSM.


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70 Responses to Is it worth owning a car in Canberra?
Capital Retro Capital Retro 4:40 pm 16 Apr 21

“I live in Crace……………”

You can’t help bad luck!

Nicholle Uidam Nicholle Uidam 10:14 am 16 Apr 21

I live in Crace and used to work at the airport at shift work times. That would take me hours to get to work if it was even possible. Same for me to get to Tuggers for another job - journey planner told me 2hrs to get there....

A Nonny Mouse A Nonny Mouse 6:55 pm 15 Apr 21

Our electric car has ‘fuel’ costs of $700/year and it is only that expensive for complicated reasons I won’t go into. For most people that could be easily halved. Its fixed servicing is $165/year. No air and oil filter, no oil changes etc. There are tyres and windscreen wipers, in common with any other car, but rego is a bit cheaper and insurance about the same.
We have just one long-range car, a Hyundai Kona EV, which does everything we need with bicycle and walking filling the gaps. However, most 2-car households have one car that never leaves town and does not need long range. That car could be a cheaper, local range EV even if a more expensive, longer range EV is not yet in consideration.

Mick Andrews Mick Andrews 9:33 pm 14 Apr 21

Motorbike is better

farnarkler farnarkler 5:03 pm 14 Apr 21

So who paid RSM for their time? As for owning a car, if you live in Belconnen, play sport finishing late on Sunday nights and work at Brindabella Park then yes, a car is worth owning. For those who live, work, shop and get entertained in Civic then possibly not.

Varalakshmi Nathan Varalakshmi Nathan 3:33 pm 14 Apr 21

Not every one rides a motorcycle. My husband had motorcycle and had fallen off and had bruises. Same with my son also. We need proper bus Transport that connects suburbs and city. We need more frequent buses from each and every corner of the street to go to the town centers and to city. Also we need shorter time of travel on the buses. It takes an hour and half to go to city by bus, in car it takes only forty minutes.

Howard Maclean Howard Maclean 11:39 am 14 Apr 21

This article annoyed me so much I wrote a reply.

https://thefoghorn.substack.com/p/the-most-affordable-form-of-personal

Howard Maclean Howard Maclean 9:37 am 14 Apr 21

... or you could buy your own escooter for around 1k and then spend cents a day charging it.

Luc Stofmeel Luc Stofmeel 10:42 pm 13 Apr 21

The article forgot the best option, an actual scooter!

$300 a year to register, free parking everywhere, runs on the smell of an oily rag, run to ride, can do grocery shopping and get it home

Acton Acton 9:46 pm 13 Apr 21

If these financial advisors calculate the running costs of a car for an ‘average’ Canberran as $16,000 a year then I would be questioning their assumptions, their maths and changing financial advisors. Or perhaps they are working for the two e-scooter companies.
My 2020 Canberra car costs were: Petrol $1200; Repairs and maintenance $1300; Insurance $450; Rego $1100; Total = $4050.
Their conclusions about the necessity of a car are also dodgy – families need cars for work and weekly shopping (unless you can balance 10 shopping bags of groceries etc on a bicycle), take kids to sporting events and doctors and trips to the coast.
I contend ever rising ACT Govt imposed household rates are destined to exceed the cost of running a car for the average Canberran.

Hayden Win Hayden Win 5:14 pm 13 Apr 21

I guess neither bicycles nor public transport are a thing?

Jen Wright Jen Wright 2:29 pm 13 Apr 21

Try being a teacher, or someone who has to dash from one end of the city to another to another and around again. Cars will never be completely replaced.

CaptainSpiff CaptainSpiff 12:48 pm 13 Apr 21

How did they come up with those numbers for car ownership? There is no way the average Canberran spends $16000 a year on running costs. My car goes 50+ km every day and we spend probably around $6000/year, with parking on top of that. Average Canberrans spending $4000/yr on parking? Are they pulling these numbers out of a hat? One would almost think the number crunching financial planner is being paid to come up with a particular conclusion.

“For the average Canberran who travels 35km per day, we calculated the total running cost of a car to be approximately $16,000 a year,” says Chris. “This includes fixed costs such as registration, insurance and servicing – we calculated these at $4000 a year. Then we added $8000 a year for fuel and other running costs, and then $4000 a year for parking.””

    JC JC 3:12 pm 13 Apr 21

    The costs were a bit bizarre.

    If you have separated fixed costs such as rego, insurance and maintenance and taken out parking then what is there left that goes with fuel to make up $8000.

    If just fuel then the quoted 35km a day even in a vehicle using 10l per 100km would only cost around $2000 per year.

    Only thing I can think of is they are factoring in depreciation to make up the other $6009.

    Even still 35km per day is not much either especially if you use the vehicle to do a couple of “interstate” trips a year etc.

Malcolm Roxburgh Malcolm Roxburgh 11:54 am 13 Apr 21

Don’t forget the amount of Canberrans who leave Canberra every weekend. Need a car for that.

Nico Wright Nico Wright 8:45 am 13 Apr 21

Not an e-scooter, a real scooter or motorcycle under300cc is a more cost effective option

デ スティーブ デ スティーブ 8:19 am 13 Apr 21

Motorcycle under 300cc, by far.

Cheap rego, free parking, lane filter through traffic at lights, cheap on fuel.

    Katy Norman Katy Norman 8:27 am 14 Apr 21

    デ スティーブ and you get to donate your organs!

    デ スティーブ デ スティーブ 8:35 am 14 Apr 21

    Katy Norman higher chance of ending up in hospital or dying as a pedestrian or cyclist being hit by a car than any motorcycle accident.

    Katy Norman Katy Norman 8:46 am 14 Apr 21

    デ スティーブ so it’s not the only dangerous thing, but it’s far more dangerous than driving a car.

Tania Shaw Tania Shaw 7:02 am 13 Apr 21

if you live in Tuggeranong you really don't have a choice, bus trips are at minimum double the time of car trips and then don't go where you need to (eg. I would need to bus into City to get to work in Fyshwick, where the car is 15 mins), and lots of things are outside the valley. If I work in the City $18/day and 1 hour of travel is worth 3 hours of my life on public transport.

    デ スティーブ デ スティーブ 8:19 am 13 Apr 21

    Tania Shaw get a motorcycle

    Tania Shaw Tania Shaw 8:33 am 13 Apr 21

    デ スティーブ oh I am not risking my life on one of those

    Natalie Ruiz Natalie Ruiz 11:54 am 13 Apr 21

    Tania Shaw agreed Tanya, i have the same issue working out at the airport 20-25 mins in the car, 1 hr or more on bus 😔

    Jeff Smith Jeff Smith 1:16 pm 14 Apr 21

    Tania Shaw Too true Tania. My bus use to take 12 minutes and two stops from Kambah straight to Woden, the bus changes in 2019 made it into heaps of stops and 35 minutes via Chapman, Stirling, Fisher, Warramanga and Weston. My nephew in another part of Kambah now has a 1km walk to the nearest bus stop and a ridiculous bus trip to his apprentice job in Phillip. 10 mins by Car when his single mum occasionally takes him, but with no licence it takes him over an hour by bus. What a debacle.

Kirra Lemongrab Kirra Lemongrab 11:00 pm 12 Apr 21

Nearly $7/day per adult... works out better for both of us to drive and pay for parking. Plus we don't have to wait for an hour for the next bus to come!

Paul Irving Paul Irving 10:55 pm 12 Apr 21

$8000 for fuel on 36km per day is a bit high. That's $160 in fuel a week. With unleaded 91 @ $1.35, that's near enough 120l per week or 83l per 100km.

I run a V6 Holden sw, and fill up once a fortnite for around $80, and that's 42km a day.

Jose Vega Jose Vega 10:36 pm 12 Apr 21

Cars for some trips, public transport for other trips... Keep your scooters.

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