What are on-road costs?

UPDATE: New, more comprehensive story available

Since the story below was published in 2019, we've published a new, in-depth guide to all of the confusing words you'll hear or read when buying a new car. You're welcome to continue reading this story, or you can head to the new guide at the link below.

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Stamp duty, dealer delivery, registration; we all know these costs exist, but when faced with the excitement of car shopping it’s easy to forget that these costs can add significantly to the bottom line of your new car purchase.

Add in the fact that some extra costs are factored into the retail price and some aren’t – the umbrella term ‘on-road costs’ can quickly become confusing.

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On-road costs generally account for charges like stamp duty, registration, compulsory third party insurance and dealer delivery charges that are all charged individually in a new car contract. Annoyingly, all these costs vary depending on state and territory, dealer location and car manufacturer.

Stamp Duty

This is charged in addition to a new car price and applies whenever the ownership of a car changes. That means it’s charged on used cars too. The tax covers the cost of transferring the ownership of the vehicle and can vary from state to state – it also increases as the vehicle price does (check out how to calculate stamp duty here).

Dealer Delivery

Dealer delivery is a cost charged by the dealership that represents their effort in getting the new car to you. It involves things like pre-delivery inspections, paperwork with relative authorities, tests and a wash or detail when the car is first presented at the dealership. Again, costs vary between dealerships and manufacturers so it’s a bit of an unknown quantity until you start negotiating.

Of all on-road costs, dealer delivery is the one that you may be able to negotiate on, depending on the the car and dealership. It's worth a shot if you want to knock that price down some more.

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Registration

It goes without saying that this is needed for every car on Australian roads and is charged at the point of sale between dealership and customer.

Compulsory third party insurance

Here's one for NSW and Queensland buyers. CTP covers victims of transport accidents, and compulsory in all states. In most states CTP is included in the cosy of your registration renewal, but if you're in NSW or Queensland you to need to choose your CTP insurer when buying a new car, so look out for this item in your invoice if buying a car.

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Luckily, costs like GST and luxury car tax (if applicable) are accounted for in the retail price which means you won’t have to worry about them being charged in addition.

Go into the dealership armed with knowledge ensuring you don’t get caught off-guard in regards to on-road costs and give yourself the best chance of a good deal.

UPDATE: New, more comprehensive story available

Since the story below was published in 2019, we've published a new, in-depth guide to all of the confusing words you'll hear or read when buying a new car. You can head to the new guide at the link below.

Other useful links for new-car buyers