As seen on:

SMH Logo News Logo

Call 1300 303 181

On-road or Showroom Price?

Beware of car dealers who quote you the ‘showroom’ price, and forget to mention that there is a considerable cost to get your newly acquired new vehicle from the showroom to the road! Savvy car buyers will always insist on a ‘drive away/no more to pay’ price quotation. (A quote from Private Fleet will include delivery to your door, familiarisation with your vehicle’s features and maintenance requirements, and a full tank of fuel. It is a good idea to make sure any quotes you seek directly from dealers or other brokers are comparable. )

On-road costs commonly include registration charges, compulsory third party insurance, stamp duty, and dealer delivery charges. For some vehicles, a luxury car tax also applies.

By law, every car must be registered in the name of the individual or company owner. The motor registry in each state handles registration, and charges vary according to the vehicle, the end user status (for example, pensioners receive concessions) and planned vehicle use (private, primary production, or business).

When registering a vehicle, you also have to prove that you have adequate CTP (compulsory third party) insurance. This is insurance to cover the costs resulting from personal injury to another person if the vehicle is involved in an accident. Insurers compete for CTP business, and costs will vary depending on the insurer selected. You are permitted to choose your own CTP insurer, but you must evidence adequate cover.

Your dealer will usually arrange both registration and CTP insurance for you. The cost will either be included in his quote, or added to the price of your vehicle at the time of delivery.

Note that CTP does not cover third party property damage. You need to arrange this separately, and although dealers often assist with arranging third party or comprehensive insurance—and can sometimes offer special deals—the cost is usually not included in the quoted on-road costs.

Taxes are inevitable! Some form of tax attaches to almost everything we buy! State and territory governments hit all new car buyers with a tax referred to as ‘Stamp Duty’. Mostly, it is calculated on the purchase price, often using quite complicated sliding scales. In Queensland, the engine size is also a determining factor. Stamp Duty can add substantially to the cost of a car, so make sure your dealer’s quote includes it.

The Federal Government now levies a hefty 33% ‘luxury car tax’ on some vehicles. If the vehicle price is more than $57,123 (as at December 2008), tax is levied on the GST-exclusive portion of the difference between the price and $57,123. For a $100,000 vehicle, this amount is ($100,000 – $57,123) x .909090, or $38,979. At 33%, a luxury car tax of $12,863 applies. This amount is added to the GST inclusive price of the car.

A recent increase in this tax from the previous rate of 25% caused considerable controversy, resulting in concessions for some buyers. Those buying certain types of vehicles for farming or tourist-related business may benefit from exemptions.

On-road costs also include a dealer delivery charge. This fee covers the dealer’s costs of preparing the vehicle for sale, including:

  • Transporting the car from the supplier or docks to the dealer’s yard
  • Organising registration
  • Fitting certain compliance components
  • Fitting optional accessories you have selected or accessories included in a ‘bonus package’ deal offered by car manufacturers from time to time
  • Removing protective tapes and plastics and other packing to protect the car in transit
  • Performance and safety checks carried out in the dealer workshop
  • Fitting number plates
  • Washing and detailing the car ready for hand over

This fee will vary depending on the type and price of the car, accessories to be fitted, and other factors. Expect to pay at least $1500 on most vehicles, though Private Fleet will negotiate aggressively on this cost component as well as on the base vehicle price, to ensure you get the best overall deal achievable.

If you are checking advertised prices of vehicles, look carefully for an indication of whether or not on-road costs are included. These costs typically add $4000 or more to the cost of the average new car, and can make a huge difference to the price of a luxury car.

Remember, always insist on a price ‘on-road’, with full tank of petrol and the initial service free. Your new car should give you several months of enjoyment before you incur any further costs other than your usual fuel refills.