24 June 2021

Is it worth owning a car in Canberra?

| Karyn Starmer
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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.

READ ALSO The best electric scooter shops & servicing in Canberra

“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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Capital Retro4:40 pm 16 Apr 21

“I live in Crace……………”

You can’t help bad luck!

A Nonny Mouse6:55 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.

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.

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.

CaptainSpiff12:48 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.””

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 Roxburgh11:54 am 13 Apr 21

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

I’ve been happily car-free for 3 years now. Belconnen suburb home, commute via bike to work (changed with covid). Shopping I use panniers on the bike and/or walk/public transport.
When weather conditions make cycling too hard or unpleasant, Uber is fantastic and convenient.
Yearly costs for me of public transport, Uber, car hire or car share (pop car) are between 1 and 1.5 thousand- way cheaper than a car!
Bonus is the health benefits of exercise, fresh air and connection. It’s also great knowing that I’m reducing my impact on the environment by one less car on the road and one less manufactured.

If you added in the benefits in efficiency savings for owning your own car, the difference would be huge.

For anyone that doesn’t work and live near the town centre areas, the other options would waste massive amounts of your own time that could be put to better economic use.

If you factored in the opportunity cost of that time, cars are going to win in Canberra hands down.

Had no car and license before moving to Canberra. Within 18 months it became essential to have a car be able to get anywhere other than to and from work.

This article ignores the price/cost of convenience. Particularly once local area tourism is taken into account. If a person’s only journeys are to the local workplace or the local shops then they are missing out the beauty of the Canberra region. Transport to the snow, local wineries, arts and crafts in the satellite towns (e.g. Bungendore) and the parks will significantly add to the cost of other transport means, but only marginally add to the cost of a car already owned.

Too many narrow assumptions make this ‘case’ irrelevant to large numbers of Canberrans.

We two need a car. Perhps through being a successful management scientist and change-agent I’ve never done a ROI or cost-benefit analysis on it. I simply know.

The ACT’s recent ‘brilliant’ re-design of the public transport system – buses – simply reinforces our need for a car.

Too many anti-car articles?

😉 and 🙂

My brother in law didn’t need a car in Canberra and then the ACT Government took away his bus route about two years ago.

Now the family has two extra cars. Good work Minister Fitzharris.

Capital Retro1:52 pm 12 Apr 21

Probably has no where to park those two cars at home either thanks to the planners of the world’s coolest little capital city.

Or you could ride a pushbike for (almost) free

And, bring the weekly shop home on it, too!?

I doubt it.

Timboinoz I do my weekly shop on my bike all the time. Weekly trek to the farmer market and walk to Coles to buy the few things I can’t get from the market. I don’t break any speed records on the way home with loaded panniers but that doesn’t bother me (or anyone else)!

I own a couple of e-scooters that I use for communicating to work each day and the round trip is approx 28kms. I did my first sub zero ride this morning at 6am and still prefer this mode of transport over a car or bus. Just need to get the government to allow e-scooters to be able to legally use the bike lanes

do you use the scooters to do your weekly shop?

I’d bet not.

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