This investigation will show you how to use a spreadsheet (with google sheets) to compare prices of cars and running costs.
Stamp duty
Whenever we register a new or used car in our name, we will need to pay a one-off levy or tax to the state government. This is known as stamp duty, and in NSW, it is collected by Roads and Maritime Services on behalf of the Office of State Revenue.
The amount of stamp duty paid depends on the value of the vehicle. Usually this is the purchase price, but for some used cars, it is the vehicle's market value (i.e. what the vehicle is actually worth).
Rates for stamp duty differ across all Australian states and territories.
In NSW, stamp duty is calculated on the value of the vehicle as follows:
| Value of vehicle | Stamp duty payable |
|---|---|
| Up to \$45000 | \$3 for every \$100, or part thereof. |
| Over \$45000 | \$1350 plus \$5 for every \$100, or part thereof, over \$45000 |
Note: In the table above, stamp duty is calculated on every \$100, or part thereof. This means we may have to round the vehicle's value up to the next \$100, to account for the part thereof (part of \$100).
Vehicle registration
Registering a vehicle ensures it is roadworthy and identifiable. In NSW all vehicles including caravans, trailers and motorcycles must be registered with Roads and Maritime Services (RMS).
Registration is valid for one year. Most of the annual cost of registration is a motor vehicle tax, based on the tare (unladen) mass of the car. The greater the car's mass, the higher the tax.
The following table from the RMS outlines the motor vehicle tax for light private use vehicles with various tare masses (as of January 1, 2019).
| Tare mass of vehicle (kg) | Motor vehicle tax |
|---|---|
| Up to 975 | \$215 |
| 976 to 1154 | \$250 |
| 1155 to 1504 | \$305 |
| 1505 to 2504 | \$466 |
Activity 1: Comparing purchase costs
- Use the internet to research three different cars that you would like to purchase one day.
- In a spreadsheet record their model, purchase price, and the annual insurance cost. All of which you should be able to find through the company's website. An example is shown below:
- Then add columns for Stamp Duty, Registration and Total cost.
- To find the stamp duty, if the purchase price of the car is less than \$45\,000, you can just multiply the purchase price by 0.03 as shown:
- If the purchase price is more than \$45\,000, you can add \$1350 and 5\% of the difference between the purchase price and \$45\,000 as shown:
- Find out the weight of your chosen car and add the registration cost according to the above registration table to your spreadsheet.
- To find the total add up all the values to column F:
- Do these steps for all three cars that you have chosen. Then determine which car is the cheapest altogether.
Activity 2: Running Costs
Now that you have chosen the car that is the cheapest it is time to consider the running costs.
- Create a spreadsheet like the one shown below and use the internet to research the current cost of each item. The cost of fuel, service, tyres, and road-side assistance may depend on the car you have chosen.
- Assume that you will do the following over the next year:
- Get your car serviced twice.
- Buy one spare tyre.
- Drive through tolls twice per week. (Assume there are 52 weeks in a year)
- Use road-side assistance once.
- Park at the local shops once per week.
- Use 50 litres of fuel per month.
- Use your spreadsheet to calculate the total running cost for your car over the year. Remember to start all your formulas with
=and use*for multiply. An example is shown below:
- Do the same for the other two cars that you chose in activity 1.
- Does the car with the cheapest purchase price also have the cheapest running cost?