Welcome to part 5 of my living in Australia or it’s every evolving series title, can you live in Australia on the Australian weekly wage. This week I’m looking at the price of cars and what you can buy if you are earning the average weekly wage. You see, unless you live and work in a small town or in the city where there are buses and trains you will need to have your own car or access to a car or motorcycle of some sort to survive
I always review the motorcycles that I’m actually interested in and usually include the list price or recommended retail price of that motorcycle at the time of the review. I don’t really do car reviews except for when there’s something I really want to say about it.
On the average Australia wage there are still many car choices for new and used cars. Prices vary from he cheapest 12,990 currently to the millions. In this scenario As with prior posts I’ve picked the single person living in a location within 20Kms of their work in neither shared or solo housing. Sure the scenario may not apply to you but this is just an example.
The budget is $100 a week or $400 a month (car loan calculator) with any difference taken up by the deposit to buying a new car. The current car loan rate is 8.5% per annum over 3 years so the approximate weekly loan payment is $100 the approximate $12,500. Assuming you have a $5000 deposit the most you can spend on a car is $17500. Sure you can go for a long term say 5 years but the amount rises to approximately $19,500 at the current interest rate.
Going for a 3 year loan with a $5000 deposit you have roughly $17500 to spend on a new car. So what sort of car can you buy for this sort of money? The answer is a basic new and smallish car. Basic doesn’t mean an uncomfortable ride it just means it is satisfactory equipment levels and safety equipment due to government requirements. Furthermore safety ratings are an important consideration for car buyers in Australia.
Now before you object and say what about all the various deals offered by car dealers offering a much better car for the amount as the loan? Well that is a bit of a joke as the deposit and loan amounts are essentially rental and at the end of the term usually 3 years you have to give the car back. The standard car loan means you own the car at the end where these schemes you lose he car or perhaps get another loan to buy it.
So what new car you buy in Australia for $17,500? The most obvious choices are the Suzuki Swift, Suzuki Ignis, Toyota Yaris, Mazda2, Hyundai Accent, Mitsubishi Mirage, Honda Jazz. These will be entry level models and expect a maximum 1.3 litre engine and a manual for some models!
The conclusion: The single person on the average wage is probably going to think twice about buying a new car unless the cars listed above meets their needs. The alternative is to buy a used car.