Why Australians are rethinking car costs

17 September 2026

Many households dedicate a significant portion of their budget to owning and running a car.  

The cost of owning and running a car can add up quickly, with fuel, insurance, servicing, registration and repayments all contributing to household budgets.

That’s why it's not surprising that the 2026 Smart Cost of Living Report - based on a nationally representative survey of more than 2,000 working Australians -  found 95% of surveyed drivers are concerned about the cost of owning a car right now.

 

Australians are changing their driving habits

 

Our research shows many drivers are already making changes to help reduce fuel costs.

Fuel costs are affecting more than just transport decisions. The research found they're influencing family travel, weekend activities and household budgets.

Almost half of the drivers surveyed in Smart’s research said they are avoiding longer drives or road trips, while others are sticking to essential trips or spending more time at home on weekends.

 

 

Cost is influencing vehicle decisions

 

The Smart research found cost pressures are also affecting the vehicles that survey respondents are choosing to buy and sell.

Among the surveyed drivers who had sold a vehicle in the past year:

• 33% said they needed the money from the sale
• 25% said they could no longer afford the ongoing ownership costs
• 16% said they wanted a more fuel-efficient vehicle

 

These findings suggest affordability is a key consideration when deciding what vehicle to own.

 

Australians are considering fuel-efficient vehicles

 

Among Australians surveyed in our Smart research, many are considering purchasing a car within the next 12 months that may help reduce ongoing ownership costs:

• 22% are considering an EV
• 20% are considering a hybrid or fuel-efficient vehicle
• 8% are considering a smaller vehicle
• 4% are considering a new car but aren’t worried about fuel efficiency

For many people in our research, the focus is no longer just the purchase price. It's the long-term cost of owning and running a vehicle.

 

Looking for ways to reduce the cost of owning a car?

 

Reducing vehicle costs doesn't have to mean driving less. 

For eligible employees, a novated lease could be another way to make car ownership more affordable. 

With a novated lease, your lease repayments and running costs such as registration, insurance, servicing and fuel are bundled into one regular payment and deducted directly from your salary. 

Because eligible expenses are paid using pre-tax salary, a novated lease may help reduce the overall cost of vehicle ownership compared to other purchasing options such as a traditional car loan. 

Our research also found almost one in five people surveyed would prefer a novated lease when thinking about their next vehicle purchase.