Owning a car doesn’t make a lot of financial sense.

We tend to ignore this fact if public transport does not properly service your suburb, we’re not comfortable walking or riding a bike, we’re regularly in a hurry, or we need to travel to multiple destinations throughout the day. Over 76% of Australians who live in a main centre drive to work each day, with less than 5% walking and the balance on public transport.

Second car ownership is primarily about convenience, but at what price?

According to Allianz insurance there are almost 3.5 million Australian households with two or more vehicles in them. Australia has one of the highest rates of vehicle ownership in the world. Since 1955, as a nation, we have seen an increase from approximately 150 passenger vehicles per 1000 people to just under 600. Certainly, there’s an environmental impact but the financial impact is much more obvious.

So, what does having a second (or third) car cost? Let’s look at the approximate outlay in a calendar year for a typical mid-sized vehicle such as a Mazda 3 – Australia’s most popular new car in 2017:

  • Registration costs (depending on state) $800
  • Insurances $1000
  • Repairs/Servicing $1000
  • Fuel (based on 15000 kms per annum $1500
  • Loss of value (based on a new Mazda 3) $3000

Using this example, you’ll be paying/losing $6500 per annum for your vehicle – that’s $125 per week. This doesn’t include parking, roadside assistance, tickets, or financing.

This scenario will differ based on individual circumstances. A brand-new car will have less servicing and maintenance costs but a higher annual loss in value, while an older vehicle will lose proportionately less value but have a much higher cost for maintenance.

So, when put in that light is owning a second car the answer? It certainly provides flexibility – the ability to have transport available at a moment’s notice. However if this flexibility equates to $125 per week, are you better off making do with your first car as much as you can? What are your other alternatives?


Negligible costs, environmentally friendly and good for your health. Cycling suffers something of a social stigma, not to mention the risk (from all those cars on the road). Theft of equipment is also a concern. Cycling takes more time and effort than driving, but see how you go replacing two car trips with bikes trips each week.


Public transport is often more cost effective per trip because the trips aren’t specific to your journey – you need to work to their timetable, their works schedule and their cut-off times. The advantage is that you only pay for it when you use it, and you don’t waste time at the destination trying to find parking. It also allows you to focus on something else (other than the road) such as a book or podcast. Research whether taking public transport can fulfil part of your travel plans on a weekly basis.


This offers the benefits of car transport without the ownership. Uber has been popular because the transaction occurs electronically, meaning customers can’t “do a runner”, drivers can’t take advantage of “getting lost”, and rates are set by head office, based on demand. Drivers come in all shape and sizes, with the businesses catering to flexible schedules. Uber is not a turnkey solution for second car ownership, especially from a daily perspective. But it’s a valuable ingredient of your travel plan that should not be overlooked.

Car pooling:

If you’re invited to an event, it’s worth inquiring who from your area is goming, and whether you could get a lift with them. It’s an ideal way to network prior to arriving at an event, especially if you’re don’t think you’ll know many people.


If your second car is a large car, is it really necessary? Do you need a 4WD to do the school and grocery shopping runs? Could you get by with a scooter or small hatchback?

Get It Delivered:

If one of your excuses for having a second car is convenience, you should review what conveniences you need, and what you can either do without or accommodate in another way. A good example of this is grocery shopping; if you need a car to go shopping, investigate how much it would cost to get your groceries delivered. It should also benefit your bank balance too, as you won’t be tempted by in store displays and promises.

If you’re not using your second – or third – car on a daily basis, you should review how you do use it, and whether this usage can be facilitated by other methods. There is a little doubt that some second (and third) car owners would benefit from investigating an alternative to owning that extra car.

If you’re trying to identify ways to manage household spending and create wealth, you don’t need to do it alone. A financial adviser (or planner) spends their days identifying and presenting opportunities to their clients. Our simple, quick, free service will connect you to the best independent financial advisers, based on your needs. Click here to get started.

The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a financial adviser or other finance professional.

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