Tips to save money on car expenses.

6 minutes
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According to the Australian Bureau of Statistics, a total of 20.1 million motor vehicles were registered as of 31 January 2021. For car owners in Australia, owning a private vehicle can be a source of great convenience, however it’s not cheap. Especially when you factor in running costs, including insurance, repairs, maintenance, and fuel. Fortunately, we’ve got some tips you can consider to help you save money.

When buying a new car it pays to understand the full costs of ownership, like fuel, maintenance, financing, and insurance fees. With this information you’re better able to gauge whether the car you would like to buy is within your budget. There are lots of resources available online to help you learn about what’s available, compare costs, and so on.

In general, cars tend to cost more every year and depreciate, so you may be better off choosing a higher quality model and keeping it for longer, rather than trading frequently. When purchasing a new or used car, think about whether a smaller model may be suitable for you. They tend to be cheaper due to their lighter weight, and as they’re often cheaper to replace they may cost less to insure and often use less fuel. Fuel efficiency of the car is also an important consideration as it can allow for small savings over the car’s life that add up in the long run. Lastly, consider carefully whether you need extras, such as a sunroof, darker window tinting, extended warranties and so on.

Fuel and driving habits.

By avoiding wasteful driving habits, you might reduce the cost of the daily usage of your car. For example, accelerating gently, being mindful of traffic to anticipate slow-downs and stops, driving at the optimal speed, and coasting during traffic jams to avoid slamming the brakes on, are all actions that can minimise the use of fuel.

A study by Monash University estimates that aggressive driving habits like speeding, rapid acceleration, and sudden braking can significantly impact your fuel efficiency. In fact, a passenger car uses 50% more petrol travelling at 120km/h than 88km/h.

Other ways you can reduce your fuel bill is to avoid idling your vehicle. Engine idling is when the car engine is running while the vehicle is stationary, such as at a red light. It could represent a significant proportion of your bill. According to this Transport Energy/Emission Research report in normal traffic conditions, Australians likely idle more than 20% of their drive time. Reducing idling can also help lower your carbon footprint, according to this University of Queensland, School of Public Health article “engine idle can have a significant impact on emissions and local air quality.”

Removing unnecessary items like sports equipment or roof racks can also help reduce the fuel consumption and aerodynamic drag. A recent experiment conducted by WhichCar indicates that a typical SUV with roof racks attached, driving the average Australian commute per year, expends 94.2 litres more than its rack-less counterpart. That number climbs to 220 litres when bikes are added on the roof rack. While removing and assembling roof racks may seem like a hassle, the savings in fuel may make it a worthwhile activity.

Setting the air conditioning in your car to a higher temperature can be helpful in conserving fuel as well. Driving with the windows open to let the hot air out before using the air conditioning and putting the windows down at low speeds may also help you save money.

Lastly, finding the lowest petrol prices in your area or use fuel discounts that might be available on your grocery receipts can also help save on fuel expenses. Resources like Petrol Spy can help you locate service stations that offer lower prices near you.

Car maintenance/repairs

The cost of upkeep for your vehicle may also amount to a hefty sum, but there are ways to decrease expenditure on this front too. It’s helpful to follow the maintenance recommendations in your owner’s manual. Regular check-ups and action to maintain optimal fluid levels for battery water, coolant, automatic transmission fluid, and brake and clutch fluids can minimise unwanted expenses in the future.

Opting for the right tyres, with correct tyre inflation and wheel alignment, is another way you can save on maintenance or repair costs. Correctly balanced tyres can run for thousands of kilometers more, as well as reduce destruction of the tread, wearing out shock absorbers, and damaging the suspension system. For most cars, premium fuels offer little discernable benefits yet are markedly more expensive, so using fuel of the octane-level as recommended by your owner manual is usually sufficient.

Car insurance.

Depending on your driving history and the area you live in, auto insurance can be a major expense of owning a car. It is therefore advantageous to learn the different ways you can shave some insurance premium-related costs.

Like shopping for any other products, do your own research on the various insurance packages on the market and compare rates. Resources like comparethemarket, iSelect, and finder may be helpful.  Look for opportunities to get discounts from your insurance provider by notifying them of all the safety features of your vehicle. Also, look at things like whether the policy includes hire cars, windscreen damage, roadside assistance and so on as all the ‘bells & whistles’ are likely to increase the premium. 

Consider too what amount of ‘excess’ you’re prepared to pay. The term ‘excess’ refers to the amount you’re required to pay in the event of an insurance claim. Electing to have a higher excess may also reduce the premium but ensure that a higher excess isn’t going to negatively impact your finances should you be in an accident; build it into your emergency savings.

You may also consider bundling insurance policies. Many insurers offer price reductions for taking out multiple policies together, such as auto and homeowner insurance.

If you drive an older car with a reduced value, it may be time for you to rethink the amount of insurance coverage you have. Comprehensive coverage helps pay to repair or replace your vehicle if it’s damaged or destroyed in an accident, or is stolen, and is often required by the lender if you take out a car loan. It also covers 3rd party damages if you’re at fault in an accident. However, for older cars that you own outright, where the cost of premiums is close to, or more than, the value of the vehicle, you might consider only paying for 3rd party property damage insurance instead of full comprehensive.

Adopting cost saving driving habits or being more mindful about how you run and maintain your car, may seem like there are only small amounts you can save here or there, however those small reductions add up over time helping you to save money on running your car.


This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

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