Upfront costs when buying a car

When buying a car in Australia, be aware that the actual cost of the car includes more than just the advertised purchase price – there are additional costs that you will need to budget for.


Dealer delivery is a charge set by the dealer. It covers expenses that the dealer will incur in selling the car – such as cleaning the car, compliance, administrative costs and the cost of holding the vehicle prior to the sale.


Stamp duty will be an additional cost – and this varies depending on which state you are in.


Goods and services tax (GST) is a broad-based tax of 10 per cent on most goods sold in Australia. If you are buying a luxury vehicle, be aware of the Luxury Car Tax, which is 33 per cent on the GST-inclusive value of the car over the relevant threshold.


Any extras that you order for the vehicle will normally also cost you extra. The advertised price usually only covers the minimum, i.e. the base model with everything stock standard. If you are buying the vehicle with extras such as ABS, automatic transmission, metallic paint and any upgraded trim, expect that you will be paying additional costs for these extras. You could be surprised when presented with the total purchase price of the vehicle if you are unaware that the floor mats, stereo upgrade, mirror and light protectors, body kits, spoilers, window tinting, rust proofing and so on that you are accepting as they are offered to you, are all adding to your eventual bill. If you are considering any of these optional extras – ask for the price before you make a decision, and use every opportunity to negotiate for some of them to be included in the base price of the vehicle, if you can.


In addition, you will need to cover the cost of registering your vehicle, as well as compulsory third party insurance, fire/theft or comprehensive insurance. These costs will also need to be paid annually when renewed. Any vehicle that is sold as an unregistered vehicle will incur the cost of number plates.


It is so easy to forget about all of these items when swept away in the enthusiasm and excitement of buying a new car. Being prepared and aware enables you to budget accordingly, and also positions you to ask the right questions and equips you to negotiate where appropriate.


Interested in purchasing a car but want to find out more about any costs involved? Contact us on 1300 889 256 or message us to find out more!