Here’s everything you need to know about how we calculated Drive’s exclusive 2023 Best Value Cars survey so you can save more on your next car.
It’s official: electrified vehicles may not be the cheapest new cars to buy but they are the cheapest to own.
Drive’s exclusive 2023 Best Value Cars ownership cost survey has confirmed what hybrid and electric vehicle owners already knew: Electricity is not only better for the environment, it’s easier on the hip pocket.
Drive has crunched the ownership costs on every new passenger car, SUV and light commercial vehicle under $120,000 to reveal the most affordable cars across the first three years of ownership. The results will save thousands of dollars for Australian new car consumers.
Electrified vehicles dominate the higher ranks of Drive’s 2023 Best Value Cars survey, securing nine of the top ten places, driven by low servicing fees and fuelling/charging costs compared to their internal combustion rivals.
You can explore the full list of all 940 cars here:
Search tips
Energy sources are: ICE (internal combustion engine), Hybrid, Plug in or EV.
Vehicle categories are: Dual cab ute, Passenger large, passenger light, passenger medium, passenger small, people mover, SUV large, SUV light, SUV medium, SUV small and van
Why are we searching for Australia’s Best Value Car for 2023?
Pressures on the finances of everyday Australians are intensifying with every passing month. Interest rates are at a 10-year high, inflation is running rampant at more than double acceptable levels, and wages are not increasing anywhere near fast enough to offset these financial pressures.
Haggling with the salesperson is an obvious way to save money on a new car purchase, but did you know that choosing smarter could save you up to $5600 per year? That’s the difference between the cheapest new car to own (Toyota Yaris hybrid) and the most expensive (Nissan Patrol 4WD).
That’s an extreme example, but even if we filter by vehicle class, the savings are considerable. The difference between the cheapest and the most expensive Medium SUV – Australia’s most popular vehicle type – is $1700 per year. In the Small SUV class the savings are a potential $2000.
Passenger cars also offer savings to those willing to buy wisely rather than emotionally. Buy a Corolla hybrid instead of a Kia Cerato GT and you’ll save $1000 a year.
As for the increasingly common dual-cab utilities, buying an entry-level Mazda BT-50 will save almost $2000 a year over a full-fruit VW Amarok Aventura.
Which cars are we testing?
Our goal is to shed light on the biggest vehicle-related drains on the budgets of everyday Australians. To that end, we’ve focused our efforts on the passenger cars, SUVs, utilities and vans bought by 95 per cent of Australians.
Everything from the best-selling Ford Ranger ute to the Toyota Corolla hatchback and Mazda CX-5 SUV has been included, right down to smaller volume vehicles like the Peugeot 308 small hatchback and Nissan Patrol large 4WD.
We have included all powertrain types, from petrol and diesel-powered cars to hybrids and pure electric vehicles. We also crunched the numbers on plug-in hybrid electric vehicles but have excluded them from our overall rankings, for reasons we explain below.
In all, we compiled data on 940 different makes and models which represent 87.9 per cent of the new vehicles bought by Australians (based on May 2023 data).
Vehicles not covered by this survey
We excluded all vehicles with a recommended retail price higher than $120,000 because buyer budgets at this level are less sensitive to running costs. We also excluded all vehicles classified as Heavy Commercial Vehicles and Buses because these are not Drive’s primary areas of expertise.
Niche appeal vehicles like coupes, convertibles and other two-door sports cars were excluded because they are seldom bought with running costs as a priority.
When it comes to utes, we focused primarily on dual-cabs with 4WD because this is where the most demand is, so cab-chassis, single cab and 4X2 models were removed.
Manual transmission variants of all eligible vehicles were excluded because of the minimal demand, although we did keep a couple of examples in the list to answer the age-old question of whether a manual is actually cheaper to own. Stay tuned for that!
Minimum safety requirements
Any vehicle with a current ANCAP safety rating of three stars or less has been excluded. Equally, any vehicle with an expired ANCAP safety rating (last tested 2016 or earlier) has been excluded. This means cars like the Suzuki Jimny, Subaru Impreza and Mazda CX-9 were removed from the data set.
Note that any vehicle that has not been rated by ANCAP is eligible.
What are the four biggest expenses for Australian car owners?
We all spend anything between $3000 and $9000 a year keeping our vehicles on the road, and that doesn’t include car washes, repairs and mechanical or cosmetic modifications.
Fuelling your car (or charging it if it’s electric) is the biggest single drain on our wallets, accounting for an average of 38 per cent of outgoings. The second biggest regular expense is insurance premiums, averaging 35 per cent of Australians’ annual automotive spend.
Vehicle registration is the third largest expense, coming in at almost $900 per year, or 15 per cent of the average transport-related spend. Maintenance in the form of annual or semi-annual servicing takes the fourth biggest slice of the pie at nine per cent or an average of $421 per year.
The rising costs of car finance, and why we excluded it
Rising interest rates and increased cost of living pressures have made some car finance and loan repayments the biggest challenge for many Australian families. But while these figures are important to any vehicle running costs, they are very difficult to estimate.
There are so many ways car finance can be structured, with most figures calculated on individual circumstances, that two people buying the same car can have totally different finance structures.
To that end, we have left the cost of the car out of our ownership calculations.
We have included list price (noted predominantly as MSRP before options and on-road costs) as a key reference point, and will be rolling out more information in terms of resale prices and operational costs as a percentage of purchase price in the coming weeks.
How we crunched the numbers
Average kilometres travelled per year
The Australian Bureau of Statistics pegs the average (median) distance driven by Australian Passenger Vehicles and Light Commercial Vehicles as 11,864km (source). We’ve rounded it up to 15,000km to cover a greater percentage of Australians’ mileage.
Fuel / Electricity prices
Good news! While interest rates and inflation have been increasing, petrol prices have steadily declined since late March, says national fuel monitoring site Motormouth.com.au. For our Ownership Costs formula, we used Motormouth’s average Sydney prices on May 22, 2023:
- ULP: 165.9cpl
- PULP (95): 180.8cpl
- PULP (98): 188.0cpl
- Diesel: 180.8cpl
In some cases, manufacturers claim that their vehicle can run on lower-octane premium or regular unleaded fuel, but they proudly promote power and torque figures in their sales materials achieved using high-octane fuel. In these cases, our ‘fuel cost over three years and 45,000km’ uses the price of the fuel needed to achieve the manufacturer’s claimed performance figures.
For electricity prices, we know that many EV owners charge at home using solar, and some also take advantage of ‘free’ charging at the office (well, somebody has to pay, but it’s probably not the EV owner). However, we’re also aware that retail charging networks cost anything between 45c/kWh and 80c/kWh depending on the speed of the charger.
So, for our Ownership Costs calculations, we used the domestic electricity supply rate of 22c/kWh which is halfway between the 0c/kWh of pure daytime home solar charging and 45c/kWh of retail charging networks.
Charging at home in Australia’s two most populous states costs between 20 and 28c/kW, representing a saving of up to 55 per cent (source and source) over retail network charging.
Vehicle Registration & Insurance
We used a Chatswood NSW address to obtain a comprehensive insurance quote on every eligible vehicle from the same source. Our ‘driver’ is a 35-year-old male with 17 years of driving experience and a clean driving record for the last five years who owns the car outright, does not use it for business and garages the car every night.
We left the insurance excess at the provider’s default and opted for market value instead of an agreed value.
Vehicle registration costs were obtained from the NSW State Government’s website (Vehicle Registration Fees). No concessions or incentives were applied.
We used the same driving record and address to obtain quotes for compulsory third-party personal insurance at greenslips.com.au. We tested the calculator on a Mazda 3 small hatchback, Land Rover Defender large 4WD, Mitsubishi Triton ute and Tesla Model 3 and confirmed that third-party personal insurance adds $426 to the annual registration fee of all vehicles regardless of shape, size, cost or performance (source).
Servicing Costs
We obtained vehicle servicing intervals and costs for every eligible vehicle from that brand’s website in May 2023. If a three-year or 45,000km capped price plan is offered, we used that figure. Otherwise, we applied one of the following in descending order of priority:
- Three-fifths of a five-year or 75,000km capped plan
- Three-sevenths of a seven-year or 105,000km capped plan
- The sum total of the first 45,000km of individual services
Where a vehicle’s servicing intervals are longer or shorter than 15,000km / 12 months, we tallied the outgoings required in the first three years and 45,000km.
The following exceptions apply:
- Genesis, Polestar: Eligible vehicles come with no-cost servicing.
- Tesla: No servicing costs are provided by the importer. A detailed survey by specialist EV site, EVCentral.com.au, suggests that Tesla owners will pay around $1400 for servicing during the first five years. Based on this, we adopted $840 (three-fifths of $1400) for the first three years.
- Mazda: some models (including BT-50 and CX-9) have service points that are condition-based and not included in the capped price (eg, fuel filter replacement: $90). We were unable to include these additional fees in our calculations. We encourage buyers to check the regularity of these additional costs before buying.
The post Australia’s Best Value Cars in 2023: How we did it appeared first on Drive.