Are European Cars More Expensive to Own in Australia Due to Insurance and Maintenance?
Owning a European car in Australia like a BMW, Mercedes, or Audi can be more expensive than other brands, primarily due to higher insurance and maintenance costs. In this article, we will explore the reasons behind these increased expenses and provide an estimate of how much more it might cost you to own one of these luxury vehicles.
Insurance Costs: Higher Premiums
Higher Premiums: European luxury cars often carry higher insurance premiums due to their higher market value, increased repair costs, and the perception that they are more likely to be stolen.
Estimated Increase: On average, insurance for these cars can be 20% to 50% higher than that for non-European brands, depending on the model and the driver's profile.
Maintenance and Repairs: Service Costs and Routine Maintenance
Service Costs: European vehicles typically require specialized service, which can be more expensive. Additionally, parts for these vehicles may be more costly and harder to source, leading to higher repair bills.
Routine Maintenance: Maintenance costs for European cars can be 30% to 50% higher than for non-luxury brands. For example, an oil change or brake service on a European car can often exceed $500, whereas similar services on a Japanese or Australian car might cost around $300.
Depreciation: Holding Their Value
While luxury cars do depreciate, European cars often hold their value better than others. However, the initial cost of a European car is significantly higher than that of a non-luxury brand.
Total Cost of Ownership: Purchasing, Insurance, Maintenance, and Depreciation
Total Cost of Ownership: When considering the total cost of ownership, including the purchase price, insurance, maintenance, fuel, and depreciation, owning a European car in Australia could cost you anywhere from $15,000 to $30,000 more annually than a comparable non-European vehicle.
Conclusion: Although the exact amounts can vary based on the specific model and individual circumstances, it is reasonable to expect that owning a European luxury car in Australia can be significantly more expensive, especially in terms of insurance and maintenance. For precise figures, it would be beneficial to obtain quotes from insurance providers and local mechanics for the specific models you are considering.
Additionally, there is another important factor to consider: Luxury Car Tax in Australia
While the issues of insurance and maintenance costs are fairly common across different regions, there is a unique tax in Australia that comes into play when purchasing a new European car. There is a certain threshold amount at which point a luxury car tax is applied, and every dollar above that threshold is taxed at 33%.
For instance, if the luxury threshold is $60,000 and your list price is $70,000, you will be taxed on the $10,000 above the threshold. This means the car will cost you $73,333, including the luxury tax.
Here's a brief example calculation:
List Price: $70,000 Threshold: $60,000 Taxable Amount: $70,000 - $60,000 $10,000 33% Tax on $10,000: $10,000 * 0.33 $3,300 Total Cost: $70,000 $3,300 $73,300While this tax does apply to new cars regardless of the brand, it adds a significant financial burden to the overall cost of owning a luxury European vehicle.
In Summary
The higher cost of owning a European car in Australia is primarily due to insurance and maintenance costs, as well as the luxury car tax. While the exact figures can vary, it is important to consider these factors when making such a big purchase.