What is Fueling the Rise in Car Ownership in Australia?

Photo courtesy of Pixabay Images by Santeri Viinamäki

Despite employment growth being flat, new car sales in Australia are at record highs. It looks like Australians still need to buy a car no matter the economic conditions. It is amazing that with its population, Australia is still among the top ten car ownership countries in the world.

1. Australians Love Cars

According to a report by Nation Master, the US tops the countries with the most cars per 1,000 people at 797 car owners.

The countries that follow include San Marino, Monaco, Iceland, Liechtenstein, and Luxembourg. Australia is 7th and New Zealand 8th.

If you exclude the small countries, Australia would have the second highest car ownership in the world.

According to statistics released by the Australian Bureau of Statistics, there are 775 motor vehicle owners per 1,000 people in 2017, an increase of 5 on the previous year (770).

On our roads you will find 14 million passenger vehicles compared to 3 million light commercial vehicles and only 850,000 motorcycles.

Car ownership also varies by state. If for example you live in New South Wales, you will find that only 544 people per 1,000 own a vehicle, compared to 628 in South Australia.

These figures make sense considering that NSW’s extensive public transport systems and the high population density in Australia’s largest city, Sydney.

2. The Vehicle Age Rules are Not Stringent

The average age of a passenger vehicle has not changed since 2012 – 9.8 years.

In Tasmania and South Australia, where people are more likely to own a vehicle, more than a quarter are at least 16 years old.

The age of the vehicle reflects how able and willing the population is to buy a new car.

In the past four years, employment growth has grown with the sale of new cars. This is even though the price of vehicles has barely changed in the last 20 years according to economist, Greg Jericho.

3. Car Prices Have Barely Changed in 20 Years

You may be shocked to hear that in 1995 you could buy a Toyota Camry for $23,910 on an average weekly wage of $647.

Fast forward to 2017 and you can still buy a Toyota Camry at $23,990 at an average wage of $1,533.

This is a momentous growth in wages and almost negligible change in car prices.

You needed to work for 37 weeks to own the Toyota Camry in 1995 compared to just 16 weeks 18 years later.

No wonder Australians are buying new cars more so now then ever before – most of which are SUVs.

4. Affordable Car Ownership Financing

Photo courtesy of Freepik Images by @snowing

Typically, most people are not saving to buy the vehicle. This is in spite of being able to save for a car.

Instead, Australians are getting affordable debt to finance their car ownership.

Financing for new vehicles doubled in 4 years to May 2016. Unfortunately car loans make up 60% of all loans and loan defaults were their highest since 2010.

Buying a second hand car might be more affordable, but Australians’ love affair with new cars shows no signs of fizzing out anytime soon!

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