Calculating the cost of your car » Car Money

Calculating the cost of your car

Would you like to understand the real cost of your next car? Whether you’re buying new or used, it’s helpful to work out your financial position before you sign on the dotted line. From using a car loan calculator to understanding potential running costs - here’s how to calculate the cost of your car.

1. Using a car loan calculator to estimate repayments

This is a great starting point for working out the cost of your next car. Simply enter the amount of money you need to borrow (loan amount) and how long you would like to borrow it for (the duration of the loan). The car loan calculator will then tell you how much you will have to repay in regular installments.

2. Calculating your car loan interest costs

Even if they don’t expressly state your total interest payable, car loan calculators can provide an easy measure for how much interest you will pay over the life of your car loan. Calculate your interest costs by multiplying the repayment amount by the number of payments you will make over the life of the loan. Then simply subtract the original loan amount and you will have the cost of your interest. This is an important factor to consider when adjusting the loan term against loan repayments so you are aware of the total cost of your finance. You are likely to pay less interest by either shortening the loan term, or decreasing the amount borrowed.

3. The up-front cost of your car

Even if you have owned a car before, you may find it helpful to remember there are upfront costs involved in ownership. These include:
Car insurance. This can vary depending on the age and model of your car and your personal risk profile. It’s a good idea to speak to your insurance company and understand what your car insurance will cost.
Warrant of fitness and vehicle licensing. Your car needs to have a current warrant of fitness in order to be considered roadworthy. Take into consideration when the current vehicle license expires so you can plan for this cost in your budget.

4. Running costs

While the car loan calculator will help you to budget for your repayment costs, it’s also important to budget for the cost of running your car. When you work out your monthly budget you should consider the cost of fuel, tyres, maintenance and repair. For example: if your tyres are expected to last 40,000km, and you drive an average of 10,000km per year, then your annual cost of tyre maintenance is ¼ of their up-front purchase price. When it comes to mechanical service, the older your car the higher these costs are likely to be. Fuel is likely to be the highest running cost and will depend a lot on the vehicle type and your usage. City driving typically uses more fuel per kilometer than open road driving.

Working through your budget in advance should help you to make sure you can afford the car loan you need. By using a car loan calculator you can understand the repayment and interest costs before you apply. Then by getting a good handle on your fixed and running costs you can be confident about whether the cost of your next car suits your budget going forward.

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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.


*Fixed interest rates for vehicle and personal loans range from 9.95% p.a. to a maximum of 29.95% p.a. on a minimum 12 month to a maximum 60-month loan term. The actual interest rate charged to you will depend on your circumstances, the type of lending required, the security provided, and is determined by the lender. 

Fees apply, including an establishment fee of up to $450 and an introducer fee of up to $995. Also, lenders may charge a PPSR fee of between $0 and $14. For example: On a loan of $5,000 over 12 months at 10.95% p.a. with Establishment and Introducer fees totalling $495 and a PPSR Fee of $7.39, the total amount to repay is $5,835.93 which is 12 monthly payments of $486.34. Those amounts don’t include ongoing fees, such as Service Fees, charged by the lender. You can find full fee information in the loan contract. We recommend that you check the fees before accepting the loan offer.

Approval is subject to meeting lending criteria, and affordability test applies. Our lender will independently assess whether you are eligible for a loan.

One hour application decision subject to affordability test, the applicant meeting the lending criteria and supplying all the required information to process the loan application.

Same day payout subject to the applicant meeting the above conditions and completing loan documentation by 12pm.