Australia 'is the most affordable country to own a car'

Australia is the most affordable country to buy and run a car in according to a UK study.

Commissioned by Scrap Car Comparison, the report took a sample of 40 countries and looked at the purchase prices of a common new car (in this case a Toyota Corolla and Volkswagen Golf), added things like service costs, insurance premiums and fuel prices – and then weighted it against the national average income.

What resulted was Australia coming out as the most affordable of those nations, with 49.48 per cent of the average annual salary being needed to buy and run a new car – more than five per cent less than the United States which ranked second at 54.87 per cent.

Of course, there are some variables which contribute to the results of this report, such as comparing the same model of car like-for-like across each of the countries included, the relevance of the insurance towards the particular vehicle and utilising an average yearly salary rather than the median.

Meanwhile, according to the Australian Automobile Association's (AAA) latest transport affordability study, Australians spend 14.7 per cent of their income on transport costs, adding up to an average of $18,417 annually – which doesn't include the cost of the vehicle itself.

The AAA's quarterly report is based on a 39-year-old woman and a 36-year-old male who are a couple living with children in a detached house with two cars – breaking down the car ownership costs into different categories including; rego/CTP/licensing, car loan payments, fuel, servicing and tyre costs, insurance, public transport and tolls.

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Corolla ZR Hybrid

Based on the AAA's numbers, the average yearly income of the aforementioned household is $125,286. Subtracting the 14.7 per cent running costs from the SCC's report of 49.48 per cent being spent on car ownership, this leaves us with $43,575 to spend on a new car, about halfway between the cost of a Golf Mk8 110TSI R-Line ($45,912 drive-away) and a fully-optioned Corolla ZR Hybrid hatch ($39,446).

While the Corolla is still the fifth-best selling vehicle in Australia so far in 2021, the top-selling Toyota HiLux shifts double as many units and the Golf isn't even in the top ten list – meaning the report isn't representative of the vehicles Australians are buying but rather an indicator of specific conditions across multiple markets.

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Golf R-Line

Despite this, the Federal Chamber of Automotive Industries believes it's unsurprising Australia is the most affordable country for vehicle owners in the world, with Chief Executive Tony Weber saying further reductions in taxation could drive prices down further.

"It is not surprising Australia is the cheapest country to buy a new car," said Weber.

"With over 50 brands in the passenger vehicle market competition helps to drive prices down.

"Australian Governments can still make purchasing new vehicles cheaper for the Australian motorist – removing inefficient costs like the Luxury Car Tax and other antiquated fees at all levels of government will directly lower the costs of purchasing and keeping a car on the road.

"The Federal Government must allow manufacturers to innovate and adapt to changing preferences in how motorists purchase cars, instead of looking to protect one element of the market place-the dealer.

"Any attempts to over regulate the market will see the consumer lose out."