Car running costs lurch ahead for Kiwi drivers

17:00, Sep 24 2013

The cost of running a car in New Zealand can be as expensive as a dollar for every kilometre driven, largely driven by the most invisible cost of the lot, the falling value of the car itself.

A small petrol hatchback was found to be the cheapest car to operate while a diesel vehicle with an engine capacity above 3000cc was considered the most expensive.

The biggest costs were depreciation, interest rates, petrol, insurance, and repairs and maintenance.

AA motoring advice manager Andrew Bayliss said depreciation represented about a third of the cost of running a car.

For the smallest petrol cars, depreciation started at about 23c a kilometre.

"People say ‘Oh hang on a minute but petrol's gone up a little bit in the last 12 months'.

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"Well, it has but the value of vehicles has perhaps come back a little bit . . . all these other little things are pretty insignificant compared with the capital cost and the depreciation."

Last week, petrol prices dropped to 216.9c a litre for 91 octane and 151.9c a litre for diesel.

AA calculated its costs based on a price of 220c a litre for 91, which it said was about 10c a litre higher than 2012's average.

Of the 220c a litre cost of petrol, about 120c a litre was attributable to duties and taxes, while average importer margins were about 30c.

Based on travel of 14,000 kilometres a year, the cheapest annual petrol bill a customer could expect started at $930 for a diesel vehicle and $1900 for petrol.

However, a diesel vehicle also incurred road user charges of $742.

Bayliss said the reality of the convenience of owning a car meant operating costs were unavoidable.

"It is what it is," Bayliss said.

"I don't think running a car is perhaps any more expensive here in New Zealand than most other comparable countries."

He said the cost of operating a car in 2013 was much the same as it was last year.

MTA spokesman Hamish Stuart said a quick calculation of costs mostly agreed with AA's findings, though depreciation was difficult to accurately account for.

Repairs and maintenance costs were found to start at about $600 a year, and Stuart encouraged drivers of newer vehicles to follow the service schedules.

"You're getting more performance from less engine.

"Not doing so can have catastrophic consequences," he said.

Reports from Australia yesterday suggested Australians were paying more than AU$3800 (NZ$4300) a year to run a vehicle.

When the AA figures are stripped of depreciation, New Zealand's operating costs of about $4600 are much the same as those across the Tasman.

Petrol was said to makes up 40 per cent of Australia's annual average car bill, while in New Zealand it accounted for about 26 per cent.

The Australian estimation had included annual parking fees of about $100 a year, but Bayliss said the AA did not consider parking costs.

"Given the average use of around 13,000 to 14,000km per year, that only equates to just over 1c per km, so it's also not something we consider to be of any great consequence."

Fairfax Media