How Australian car pricing works

We take you into the detail and breakout the various components that make up car pricing and give you some insights how to get the best deal.

Australian automotive pricing is made up of a number of various manufacturer costs, dealership costs and government taxes. It can easily become very confusing to understand exactly what you are paying for, especially when having to negotiate with a dealership. Luckily we’ve got you covered.
Here we take you into the detail and breakout the various components that make up pricing and give you some insights how to get the best deal.
The most commonly referred to price is the Drive Away Price which is the total price inclusive of all costings and taxes. Simply put, this is the manufacturer’s best estimate of the total amount you would pay for the car and it’s what we monitor and use at The Beep.

Australian Consumer Law requires all automotive advertising to display this price as to not mislead customers so when you see car adverts, online configurators or dealership showroom point of sale material, this is the price that should be reflected. Note, it may not include any additional services such as scheduled servicing, financing or ongoing registration costs.
The drive away price is made up of three main components: Manufacturer’s Suggested Retail Price + On-Road Costs + Dealer Delivery Fees

This is the vehicle price set by the manufacturer including Goods & Services Tax (GST) and any applicable Luxury Car Tax (LCT). GST is a broad-based tax of 10% on the sale of most goods and services consumed in Australia, including cars.
LCT is a little more complicated. It is charged at 33% of the value over certain thresholds set by the Australian Tax Office (ATO) every year. The current 2024-25 financial year thresholds are defined as $91,387 for vehicles under 7.0L/100km (fuel efficient) and $80,567 for vehicles 7.0L/100km and over (non-fuel efficient). LCT is then calculated as the Vehicle Price minus the LCT threshold divided by 110 multiplied by 33.
For example, on a $100,000 non-fuel vehicle the LCT would be calculated as $100,000 - $80,567 / 110 x 33 = $5,830.

These include costs such as vehicle registration, stamp duty and compulsory third-party (CTP) insurance. Most of these fees vary between states and territories which is why the drive away cost itself varies. The Beep uses the default rates set by the manufacturers.
Vehicle registration fees are paid when the vehicle is first registered to the authorities and then when renewal is required. Typically registration is for 12 months on a new vehicle.
Stamp duty is the fee that a State or Territory government applies to the process of registering a vehicle in your name and the fee itself can vary considerably. For example, a typical $100,000 vehicle in Victoria would attract $5,200 stamp duty compared to NSW which is $4,100. There are numerous stamp duty calculators online to assist you.
CTP (also known as Green Slip in some states) is a mandatory insurance that covers your liability for any personal injuries resulting from a motor accident if you’re at fault. In general it covers the driver (you or a different driver), the driver of the other vehicle, passengers, pedestrians and cyclists. It does not cover any damage to property. It is typically arranged and priced into the new vehicle by the dealership at time of purchase.

Dealer delivery fees are designed to cover the cost of transporting the vehicle to the dealership alongside checking over and detailing the vehicle before its final handover. These costs can vary from $1,000 up to $8,000 and are generally where dealerships hide a lot of their profit margin. If you’re looking to negotiate on the vehicle price this is normally a good place to start and you may need to prompt the dealership to itemise out each specific cost.