What’s included in the drive-away price of a car?
- The drive-away price of a car includes everything you need to literally drive away
- CTP, stamp duty, dealer costs and rego all add to your costs
- But some essentials aren’t included
If you’re in the market for a new car, you’ll want to know the total cost. While ‘drive-away’ prices are becoming standard, you’ll still see ‘plus on-road’ costs advertised too. So, what exactly do drive-away costs and on-road costs include?
Here, we take out the guesswork of buying a new car and discover what you’ll need to pay.
What does drive-away price mean?
If you’re buying a new car – or used car – in Australia, the ACCC suggests car dealers should advertise the single price you’ll need to pay to buy the vehicle.1
This can be known as a ‘drive-away price’ – or ‘drive away no more to pay’. The ACCC guidance says that price needs to be advertised as a single figure at least as prominently as any component or partial price.2
The drive-away price will include everything you need to pay to be able to literally drive the car away.
Depending on your state, the total price you could pay for a new car may include:3
- Stamp duty (or registration duty)
- Transfer fee
- CTP insurance
- Registration fee
- Number plate fee
- Traffic improvement fee
- Dealer delivery fees
Check the small print for the length of registration and CTP – some dealers may offer 12 months, others may provide three or six months. The ACCC says you should be informed if you’re being given less than 12 months.4
Remember, while the drive-away price will include CTP, it won’t include comprehensive car insurance – you’ll need to arrange that yourself.
Is the drive-away price the same as on-road costs?
No – your on-road costs are all the components that make up the total price you pay, on top of the actual cost of the car. These may be listed separately with a lower price stating ‘excluding government charges’ or ‘plus on-road costs’. But that price should be – at most – as prominent as the drive-away price.
What needs to be included in your new car price by law?
GST and the luxury car tax (if applicable) must be included in the price listed by the car dealer.5
What warranty do you get with a new car?
Every new car comes with a manufacturer’s warranty, which protects you from things that shouldn’t go wrong with your new car. This doesn’t include wear and tear or damage after an accident.
The length of warranty varies between manufacturers. In July 2024, the broadest warranty on offer was 10 years/200,000kms.6
As well as the manufacturer’s warranty, in Australia, car buyers are also covered by the Australian Consumer Law, which applies to new cars for an ‘unspecified but reasonable time’.7
What does registration cover?
Every vehicle must have registration, or ‘rego’, to be driven legally on public roads. And you need to have CTP insurance to register a vehicle.
In Victoria,8 Western Australia,9 Northern Territory,10 and Tasmania,11 registration includes CTP insurance (motor injury insurance or motor accidents compensation fund).
In South Australia,12 Queensland,13 and Australian Capital Territory,14 you can select your preferred insurer while registering the vehicle (in Queensland you have the option of buying CTP before registering or including it in your registration).15
In New South Wales, all new vehicles require CTP (or green slip) insurance, except trailers and caravans. In most cases, the car dealer will organise CTP at the same time as the registration.
QBE provides CTP insurance in New South Wales, Queensland and South Australia.
What does Compulsory Third Party (CTP) insurance cover?
CTP insurance covers the cost of compensation claims if you, or anyone driving your car, causes an accident where someone else is injured. Third parties who could claim against you include your passengers, and other road users such as pedestrians, motorcyclists, cyclists, other drivers, and their passengers.
Stamp duty on a new vehicle
Stamp duty is tax payable on car registrations.16 In a drive-away price, the dealer will pay the stamp duty, or if you’re paying on-road costs you’ll need to pay the stamp duty.
The amount of stamp duty you’ll need to pay depends on the state you live in. Check out your state or territory’s calculator here:
- New South Wales
- Victoria
- Queensland
- South Australia
- Western Australia
- Australian Capital Territory
- Northern Territory
- Tasmania
Luxury car tax
Luxury car tax is charged at 33% on vehicles that cost above a certain threshold (including GST),17 and is built into the sale price of the vehicle.
For the 2024-25 financial year, the threshold is $80,567, or $91,387 for fuel-efficient vehicles18 with fuel consumption of 7L/100km or less.19
Understanding the deal on offer
When you’re looking for a new car, it’s important you’re comparing like for like. By understanding the true cost, you can make the best decision to suit your needs.
Remember to protect your new car
While drive-away costs include CTP, they don’t include comprehensive car insurance.
QBE Comprehensive Car Insurance provides cover for accident, damage, fire and theft, plus three-year new car replacement (conditions apply). Not to mention damage to other people’s property up to $30 million.
Make sure your new car is protected by taking out comprehensive insurance before you drive out of the dealership.
To decide if the product is right for you, please read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD).
1 Pricing manual for the motor vehicle industry | ACCC
2 Pricing manual for the motor vehicle industry | ACCC
3 New Offroad 4x4 cars for sale in Australia – carsales.com.au
4 Pricing manual for the motor vehicle industry | ACCC
5 Buying A Car: On-road Costs Explained | Drive Car News
6 The warranty offering for Australia’s top 20 new car brands | CarExpert
7 Submission 98 – Attachment 1: Just bought a new car? Know your consumer rights – Australian Automotive Dealer Association (AADA) – Right to Repair – Public inquiry
8 Indemnity provided by the transport accident charge – TAC – Transport Accident Commission
9 Motor injury insurance | Western Australian Government
10 Motor vehicle registration | NT MACC
11 About the MAIB – MAIB
12 About CTP insurance | CTP Insurance Regulator
13 Help with your registration quote | Transport and motoring | Queensland Government
14 Vehicle registration and transfer – Access Canberra
15 Help with your registration quote | Transport and motoring | Queensland Government
16 Stamp duty | business.gov.au
17 Luxury car tax rate and thresholds | Australian Taxation Office
18 Luxury car tax rate and thresholds | Australian Taxation Office
19 Definitions – Luxury car tax | Australian Taxation Office
