Buyers' Guide: On-road costs explained
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Ninety nine per cent of the time, the price listed on an item is the price you’ll pay — a pair of sneakers, a new laptop, even an icecream from your dairy.
Why should buying a car be different? We often receive calls from AA members asking what on-road costs (ORC) include and, more importantly, if they’re being misled by the seller.
What’s included in on-road costs?
On-road costs typically include vehicle registration, Warrant of Fitness (WoF), and Road User Charges (RUC) for diesel vehicles. Sometimes they also include putting petrol in the tank, grooming, servicing or any pre-delivery inspections carried out.
What should you pay for on road costs?
That depends what the dealer includes as on road costs.
There’s no set rule on inclusions, nor is there a standard price, so make sure you ask the seller for a breakdown on costs to ensure you’re both on the same page.
Fuel type also comes into the equation as diesel variants incur Road User Charges.
These charges vary depending on vehicle size and weight, but for a passenger diesel car you’re looking at $68 per 1000km plus an admin fee.
With so many varying factors, many dealers have simply chosen to have a fixed charge regardless of the make/model and fuel type.
We decided to contact several used car dealers in the Auckland area and ask about their on-road costs and what they included.
For consistency we looked at a Mazda Axela import around the $7500 mark. Results were as follows:
Dealer A: $390 — includes six months registration, 12-month WoF, vehicle service and a full groom.
Dealer B: $300 — includes six months registration, 12-month WoF.
Dealer C: $350 — includes six months registration, 12-month WoF and a vehicle service.
If you’re comparing similar makes and models as we have done (particularly engine size and fuel type), chances are the on road costs should be much of a muchness. If the vehicle has an unclear service history, we recommend you invest in a vehicle service for peace of mind.
What about buying new?
Think you can avoid on road costs when buying new? Nope. Manufacturers have a similar pricing structure when purchasing new and although this varies from one model to another, one town to the next, you’re most likely looking at around the $1000 mark.
Some manufacturers have ditched the RRP and have adopted a more all-inclusive pricing strategy to avoid any doubts on cost.
Toyota New Zealand recently introduced the Drive Happy Project. Toyota claims it is making the new car buying process more transparent by being more upfront about pricing.
In other words, it tells you how much the car will cost, including the on road costs, before you get into the process of evaluating it, taking it for a test drive and so on.
This upfront, haggle-free price is called the Toyota Driveaway Price (TDP) because it includes the price of the car, all pre-delivery costs, WoF, registration, a full tank of fuel, (and with a diesel vehicle, 1000km of road user charges) and even floor mats.
Customers also have a seven-day money back policy should they not be happy with their new wheels.
Next time you’re shopping for a new set of wheels, keep a close eye on on-road costs as they might creep up on you.
Remember that you’re the customer so don’t be afraid to ask for clarity around the price.