Budget cars more expensive to maintain

Budget cars more expensive to maintain

Motorists are being warned to look beyond the sticker price when buying a car and to factor in post-sales costs such as servicing, car insurance and a vehicle’s fuel economy, after new research found some budget-priced vehicles can cost more to maintain than a luxury car.

The Australian Automobile Association (AAA) found the cost of servicing a Nissan Micra hatchback, at $1584 over three years, to be more than 50 percent dearer than the cost of regular services of Volkswagen Golf at $876 over three years. The two cars cost $13,990 and $36,490 respectively, according to the study.

The Micra was even more expensive to maintain than Toyota’s heavy-duty LandCruiser, with the $80,000 4WD proving $324 cheaper to maintain over three years.

The report found the cheapest cars to maintain over the period were the Hyundai 120 ($567), Holden Barina ($740), Mitsubishi Mirage ($750) and Toyota Yaris ($780).

The study was based on car dealerships’ capped-price servicing costs, which were introduced to increase the transparency of car running costs and stop some rogue operators from over-charging. Before the introduction of capped-price servicing, prices varied widely even among dealers representing the same brand of vehicles.

AAA executive director, Andrew McKellar, said capped-price servicing does provide a greater level of transparency but people must read the fine print.

“Not all brands offer the same conditions or service period which means you may not be comparing apples with apples,” he said.

“Do your homework and examine all the details such as how many services you get at that fixed rate and also how often the service needs to be undertaken.”

Aside from the upfront costs and the price of maintaining a car, it’s important to factor in other expenses such as car insurance and a vehicle’s fuel economy.

A recent study from Canstar found the average car insurance premium for families is $1181, while under 25s pay $1361 on average each year, but premiums may vary widely between car models and driver profiles, among other factors.

So before you buy a car talk to your provider or use RateCity to get a quote on comprehensive car insurance so you know what you’ll be paying down the track.

As for fuel economy, all new light vehicles sold in Australia are required to display a Fuel Consumption Label to help motorists make informed choices about the environmental impact and running costs.

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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.