New Car On Road Costs – A Complete Guide
Most of us are already aware that on road costs are almost never included when new car prices are quoted on automotive websites. Automotive journalists will often quote manufacturers list prices in their new car reviews as well.
Sometimes new car salespeople will refer to these ‘list prices’ when giving price indications on the yard too…
“…and these ones are from $29,990.”
Just so you know, with Any New Car you’ll receive a complete, written price break down. We negotiate the best (drive away) price for you on any new car, in writing.
But in this post our purpose is to simply break down new car on road costs for you so you know, in advance, what they are and how and when these on road costs are applied when you buy a new car.
We’ll start by listing and explaining the on road costs that are factored into any finished (drive away) new car price.
Your new car, plus any options and accessories you have fitted by the supplying dealer prior to you taking delivery are subject to Stamp Duty. Government stamp duty on new cars varies depending on the State that you buy your new car in. You can calculate new car stamp duty here.
Luxury Car Tax (LCT)
New cars that exceed the Luxury Car Tax threshold in Australia attract Luxury Car Tax (LCT). The LCT threshold can (and has) varied from one financial year to the next so it’s always a good idea to check LCT thresholds directly on the ATO website.
The luxury car tax threshold is $65,094, however, there is also a ‘fuel-efficient car limit’ set at $75,526. These threshold amounts are current for the 2017-18 financial year.
For a full explanation of Luxury Car Tax, you can read the ATO’s own Luxury Car Tax Determination PDF. This is a succinct 3-page document that goes into the nitty-gritty of Luxury Car Tax in Australia.
Dealer Pre-delivery or ‘Dealer Charges’ is exactly as the name suggests, a dealer charge. It generally averages $1700, however it can exceed $2000 in some cases.
What’s it for?
By a pre-delivery charge, dealers recover:
- The cost of transporting a car (prior to anyone buying it).
- The cost of preparing a car for sale or presentation (new cars arrive with some items still in need of fitment – they’re also very well wrapped or sealed in parts).
- Pre-delivery service: Workshop mechanics perform necessary performance and safety checks outlined by manufacturers. Removal of protective packaging or coatings, fitment of standard items not yet fitted and a complete vehicle detail.
We help you by:
1. Minimising the effect of these charges on your new car purchase.
2. Negotiating the best overall drive-away package on your new car inclusive of any options or accessories you specify, and all necessary on road costs relevant to your buying status.
3. If we believe we’ll be able to save a significant amount of money by purchasing a particular item after you take delivery, we will inform you when we supply you pricing so you have the option.
Okay, on to other on-road costs…
Compulsory Third Party Insurance (CTP)
Compulsory Third Party Insurance or ‘CTP’ is required by law in Australia. It covers against claims made by a third party in relation to personal injury in the event of an accident.
Premiums are set by the insurer and vary according to registration address and vehicle usage. When buying a brand new car, your CTP policy is supplied to you by the dealer along with your registration. The following year when you renew your registration, you may like to change your CTP provider.
New Car Registration
All new cars need to be registered in the name of an individual or Company by the appropriate motor registry in each state or territory.
New car registration varies according to the vehicle and the type of registration. For example Business usage, Private usage or Primary producer. The status of end user also effects cost – for example, Pensioner, TPI or other legitimate cardholders.
Why Do New Car Prices Vary From Person To Person?
Changes in the overall (or the “drive away”) price happen whenever any part in the total price equation change.
The on road costs when buying a new car are almost never straightforward. Even if a car is advertised as “drive-away” the price could and likely will change because things such as registration type (Pensioner or Business Registration for example), adding options or accessories and negotiation efforts will all affect the final “drive away” price of a new car.
The Anatomy of a New Car Price With On Road Costs
The breakdown and order of things when pricing and purchasing a new car…
The ‘List Price’ of the New Car
Often referred to as the starting price, this (manufacturer’s list) price includes GST but that’s all. All else is charged on top of this price. This is the price you’ll find on most automotive data providers websites or quoted in new car reviews.
Any option you choose to add that is offered by the new car manufacturer. Factory options are becoming less prevalent as new car manufacturers continue towards offering model variations or so-called variants.
Model variants allow manufacturers to ‘pre-package’ models or to group or stagger variants to specific budgets and requirements.
New Car Accessories
Accessories are items you may add to ‘finish’ your new car and ‘make it your own’. These may be things such as window tint, carpet mats, bonnet protector, weather shields and more.
On Road Costs
On road costs are all those listed and explained at the beginning of this article (above).
On road costs are applied to the ‘List Price’ including GST in this order:
Stamp Duty, Dealer Pre-delivery, Luxury Car Tax (LCT) if applicable, Compulsory Third Party Insurance, Registration according to your buying status and vehicle type.
Just as you thought you were done…
Dealers will always offer you a vast array of protection packages AFTER the deal is done. These include paint protection, fabric protection, rust protection, under-body protection, theft protection and window tint if you haven’t taken it already.
Of course, if you decide to take any of these items Stamp Duty is re-adjusted and Luxury Car Tax as well if applicable which will again change the “drive-away” price.
New Car Finance
Finally, you’ll be asked how you’ll be paying for your car when it’s ready for you to take delivery. At this point, one of the dealer’s finance representatives will likely offer to ‘run some numbers’ for you.
If you’ve decided on your new car, we’ll make sure you have a genuine opportunity to buy your new car at the lowest possible price without you having to tackle everything yourself.
We’re saving new car buyers $1000’s every day…