Australian car costs: component breakdown

Have you ever wondered why some cars cost so much more than others, even though they look the same at first glance? There are substantial differences between popular car manufacturers and within each manufacturer’s fleet. The difference is huge.

Price is often the single biggest factor Australians consider when choosing a car, so it’s important to understand whether the large car price differences are justified for Australians. That’s why MNY decided to expand its research on fuel-efficient cars and delve deeper into the world of car prices.

MNY, the guide to all things money launched in 2023, has conducted a comprehensive series of analyzes to break down car costs in Australia. MNY Editor-in-Chief Sergiy Kirichenko has extensive knowledge and background in vehicle-oriented research. Prior to his current position, he served as a statistician for the Insurance Institute for Highway Safety/Highway Loss Data Institute for 17 years. He said the goal of MNY’s current research is to discover associations between specific engines and body types and vehicle purchase price. His hope is that the findings will help Australians make informed purchasing decisions and identify the factors that have a big impact on car prices.

Average car cost by brand in 2024

deeper dive

MNY staff assesses the impact of body style, engine size, drivetrain, and transmission type on overall vehicle price, and identifies the reasons behind trends and what overall patterns are emerging. was evaluated.

One of the important factors that affects the price of a car is the body type. Median prices vary widely between these vehicle types, with a typical sedan costing twice as much as a hatchback and a typical convertible twice as much as a sedan. The reason for this discrepancy lies in the vehicle’s target audience and the vehicle’s materials.

Hatchbacks are generally commuter vehicles for Australian working or middle-class families living in cities or suburbs. The smaller body size and smaller engine mean a significantly lower price and better fuel economy. It also doesn’t have any fancy features. Similarly, vans may be driven by working-class Australians looking to transport goods or people.

SUVs, sedans, and wagons also fit into similar niches as hatches and vans, but perhaps with additional technology and better materials. At the other end of the spectrum, coupes and convertibles are designed for high-income Australians who value high-end features and engine performance over purchase price and cargo space.

Cylinder size has a clear relationship to the overall price of the vehicle, as vehicles with more cylinders (and more engine capacity) are much more expensive. The electric car costs the same as his five-cylinder gas car, more expensive than most cars but much cheaper than top-of-the-line options.

Six-cylinder engines are usually installed in luxury cars, while eight-cylinder engines are installed in ultra-luxury cars such as Porsche and Aston Martin. However, these are extremely rare and the average Australian car has either a three- or four-cylinder engine.

Five-cylinder engines are still found in the average consumer’s car, as many manufacturers include them in more powerful models. But as larger displacement engines face increased scrutiny over their efficiency and emissions, consumers may turn away from those options and toward smaller gasoline engines and electric options. .

Breaking down prices by other components of the vehicle can be very beneficial. There is a big difference in price between two-wheel drive and four-wheel drive cars when you take drivetrain into account. Similarly, when considering the three main transmission types, there are clear trends between automatic, continuously variable transmission, and manual transmission.

The price difference is not due to the feature itself, but to the type of vehicle in which the feature is commonly used. Four-wheel drive vehicles are typically SUVs (larger) or sports cars (designed for performance) and have larger, more expensive engines. On the other hand, two-wheel drive vehicles are likely to be small commuter vehicles.

Similarly, manual transmissions tend to match smaller cars with 3- or 4-cylinder engines and lower prices. On the other hand, luxury cars are almost exclusively manufactured with automatic transmissions. Continuously variable transmissions, increasingly popular in newer models, fall somewhere in between.

Impact of EV

The evolution of Australia’s electric vehicle (EV) market represents a major shift in automotive trends, reflecting both technological advances and changing consumer preferences. Electric cars generally have higher initial costs than gasoline cars, but this cost difference is gradually narrowing.

The starting price for an electric car in the Australian market is around $45,000, with most models falling in the $60,000 to $100,000 range. This higher initial cost is offset by long-term savings in fuel and maintenance. The average Australian driver spends around $2,160 a year on petrol and can switch to an electric car for around $600 a year in charging costs. In addition, the maintenance costs of an EV are significantly lower, averaging around $300 for 15,000 km, compared to $1,050 for the same distance for a gasoline car.

There are different types of electric vehicles available on the market, each catering to different consumer needs.

A hybrid electric vehicle (HEV), which combines a traditional internal combustion engine and an electric motor, costs about $26,500.

Plug-in hybrid electric vehicles (PHEVs) start at around $42,500 and feature larger batteries that can be charged externally.

Battery electric vehicles (BEVs) start at about $47,500 and run solely on electricity, offering a quieter, smoother ride.

Government incentives and tax policies vary by state, further impacting the EV market. For example, New South Wales and Victoria offer rebates and stamp duty exemptions on new EV purchases, and Queensland offers rebates on new zero-emission vehicles. These incentives make EVs more accessible and attractive to a wide range of consumers.

conclusion

MNY’s analysis of Australian car costs, including the electric vehicle (EV) market, highlights the complexity of car pricing. Engine type, size, body style, and now power source all have a big impact on a vehicle’s price.

Features like four-wheel drive and eight-cylinder engines typically come at a higher price in line with luxury models, but the rise of EVs introduces new dynamics. Despite their high initial costs, electric vehicles can save on fuel and maintenance over the long term thanks to government incentives. This is why it is becoming an increasingly popular choice as consumer values ​​shift towards sustainability and efficiency.

The Australian car market is evolving with these trends. The variety of EVs available, from HEVs to BEVs, serve different needs and mark the shift towards greener and more cost-effective transportation options. This market evolution shows that the cost of a vehicle goes beyond mere technical specifications to reflect a complex interplay of features, market positioning, and consumer preferences.