Money
Australia's cheapest cars to own, run and insure
“Buy the cheapest car your ego can afford,” goes the saying, and that advice has never been more relevant than now, with soaring costs making practicality a smarter choice than ever before.
By Stephen Corby
It might feel like a million years, but the fact is that not so long ago new cars felt genuinely affordable and you could buy one for what now seem like crazy prices – a Suzuki Alto could be yours for less than $10,000 in 1996, while it was only last year that you could still buy a new vehicle for under $20,000 (the MG3, which now officially starts at $23,990).
When you consider that buying and operating a car is typically the second biggest household expense for Australians (your house being number one), it’s no wonder that so many of us are keen to find out what the cheapest cars are to own, run and insure.
Car costs are accelerating
In just the past 5 years, the average prices of cars in the light passenger segment – little inner-city cars like the Mazda 2 and Toyota Yaris – have risen from just over $15,000 to more than $25,000 (according to the 2024 RJ Pound pricing guide), a dizzying leap of 39% since 2019. The small passenger car segment, which once dominated our roads when Mazda 3s and Toyota Corollas were our most popular vehicles, is up 19% over that same period.
According to the same RJ Pound pricing guide, when it comes to SUVs, the cars most Australians now buy, small ones are up 24.5%, medium SUVs up 19% and large SUVs 13%. Surprisingly, our beloved and top-selling utes – Ford Ranger and Toyota HiLux – have gone up just under 10% in that 5-year timeframe.
No wonder it feels like a tough time to drive a bargain out of a car showroom.
The cheapest cars all up
Fortunately, help is at hand, in the shape of the RACV’s Annual Car Running Costs Survey, which has itself been running for more than 50 years, comparing Australia’s new cars in terms of the overall cost of ownership, by combining data on purchase price, loan repayments, insurance, fuel or electric vehicle charging costs, tyres, servicing and repairs, all averaged out over 5 years.
Here, then, is a list of the cheapest cars to own, run and insure in each category, plus one top tip to consider.
And the winner is…
According to the RACV’s Annual Car Running Costs Survey, for the third year in a row, the cheapest car to own and run in Australia in 2023 (the most recent survey available) was the MG3 Core Light Hatch (starting at $23,990), with monthly costs of $746.01.
The MG3, from Chinese brand MG, was closely followed by the Korean-built Kia Picanto S (starting at $21,190) at $765.87 per month.
Small but mighty
While the Picanto and MG3 both sit in the light car category, also known as “extremely small”, the bargain star of the Small Car segment was from a Japanese brand; the Mazda 3 Pure Auto hatch (starting at $31,190), with monthly costs of $915.30, according to the RACV.
The best Small SUV was another Korean offering, the Hyundai Venue Auto FWD Wagon (a real bargain starting at just $22,500) at $926.56 per month.
The middle ground
Much beloved of Uber drivers everywhere is the medium-sized sedan segment, which used to be what every family seemed to own when Ford Falcons and Holden Commodores ruled the world. Today, the best-value sedan for Uber workers and others according to RACV is the Toyota Camry Ascent Hybrid 2.5 Hybrid CVT Sedan (starting at $39,990), which would cost around $1,120.98 a month.
If you’re after the more popular mid-sized SUV segment, the Honda CR-V Vi 2.0 CVT FWD Wagon (starting at $44,700) works out cheapest at $1,161.36 a month.
Heavy hitters
If you’re shopping at the larger end of town and you need, or want, a large SUV, then the RACV recommends one that doesn’t look quite like the others – the more wagon-shaped, but lovely to drive, Subaru Outback 2.5 Petrol CVT AWD Wagon (starting at $47,990), which averages out at $1,387.37 per month.
Electric performer
If you’re in the market for an EV, the RACV rated the MG ZS Excite Standard Range RWD Wagon as the best value for money. It will set you back $1,172.76 per month, but it will cost you at least $33,990 to get into one.
As electric cars grow in popularity, it’s worth considering the beneficial running costs that they offer, particularly if you have solar panels.
Prices for the electricity you need to charge your EV vary, of course, but if you charge your electric car during the day when the sun is shining, you are effectively running it entirely for free. And when you consider that most EVs now offer more than 400km of range – and in some cases more than 600km – and that the average Australian drives just 30km per day, you really don’t need that many sunny days to make this work. More on this: Can you really take a long road trip in an electric vehicle?
Electric cars might not work for everyone, and having the space to install a charger, and solar panels, is not always possible, but it’s definitely an option worth considering to save money on running costs.
This article reflects the views and experiences of the author and not of Citro. Prices and costs stated are approximate and based on the sources provided. While care has been taken to check all figures, including against industry reports, Citro does not guarantee their accuracy and readers should independently verify any prices and costs stated in this article.
Feature image: iStock/miniseries
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