Everything you need to know about on-road costs
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Usually when shopping, you expect to pay the exact recommended retail price an item is listed for. Nothing more, nothing less.
However, when shopping for a vehicle it can be different, as you’re typically required to pay an on road fee alongside the cost of the vehicle. This covers costs to get the vehicle ready to be driven on the road.
We often receive calls from AA members asking for more information on on-road costs (ORC), and what they normally include.
What are on-road costs?
On-road costs typically cover what is required to get the vehicle ready for the road when buying from a dealer (new or used). For all vehicles it covers registration and warrant of fitness (WoF). For diesel vehicles it involves road user charges (RUC). In some cases dealers include extras, such as a full tank of fuel, a vehicle groom or servicing.
What should you pay for on road costs?
This normally depends on what you’re looking to buy and what the dealer includes as on-road costs. Apart from vehicle registration and WoF, there’s no set rule on what’s covered, nor is there a standard price.
Make sure you ask the dealer for a breakdown of the ORC. If the dealer is unable to provide this, you may be paying for unnecessary add-ons.
Fuel type also comes into the equation, as diesel cars incur road user charges.
These charges vary depending on size and weight, but for a passenger diesel vehicle you’re looking at $72 for each 1000km (plus an admin fee).
With so many varying factors, some 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 across New Zealand about what was included in their their on-road costs. To compare these costs, we looked at popular petrol Nissan Tilda imports costing between $6000 and $7000.
Dealer A: $595 — includes six months’ registration, a 12-month WoF, and a groom.
Dealer B: $490 — includes 12 months’ registration, a 12-month WoF, six months’ mechanical insurance (<10,000km), and 20 litres of fuel.
Dealer C: $350 — includes 6 months’ registration and a 12-month WoF.
If you’re comparing similar makes and models as we’ve done, the price can sometimes vary depending on what the dealer includes in the ORC. Never be afraid to ask for exactly what’s included in the cost.
New vehicle dealers have a similar pricing structure, although this can vary. We asked about the ORC of three separate petrol hatchbacks, each of which had a RRP of between $29,000 and $36,000.
The results varied, but they all included 12 months’ registration, a WoF and a full tank of fuel. However, one included the floor mats as part of their costs and another specified a pre-delivery inspection. The prices ranged between $795 and $1,290.
Some manufacturers such as Toyota have ditched the ORC approach and have adopted an all-inclusive pricing strategy.
This removes any room for negotiation on the sticker price, but allows the buyer to know exactly what they’ll end up paying for a vehicle if they choose to buy it.
This upfront, haggle-free price, the Toyota Driveaway Price, includes the price of the car, all pre-delivery costs, WoF, rego and a full tank of fuel.
For a diesel vehicle some road user charges are also included.
Next time you’re shopping for a new vehicle make sure you consider the on-road costs as they affect the total cost of a vehicle.
This is increasingly important if you’re on a tight budget, as ORC can be the difference between spending less or more on a vehicle.
Remember: you’re the customer so don’t be afraid to ask for clarity around what’s included.