Transport costs accelerate by more than $900 a year

Transport costs have soared by more than $1000 a year in some Australian cities, with expenses topping $24,000 on average and putting added pressure on household budgets.

The figures, released by the Australian Automobile Association this week, showed transport costs rose by four per cent over the past three months, or more than triple the consumer price index. 

Households in Sydney, Melbourne and Brisbane continued to pay the most for transport, at an average of more than $27,000 a year.

But the AAA revealed costs in some regional areas rose by more than $800 a year and weekly costs in some towns had passed $400 a week for the first time.

The results came amid record high petrol prices of more than $2 a litre and after the consumer price index climbed to 5.4 per cent in the year to September 30.

Fuel prices
Rising fuel prices have added to the transport costs of households.

The latest AAA Transport Affordability Index found transport costs increased by four per cent between July and September, with the greatest price rises in car loan payments, fuel, insurance and servicing costs. 

On average, the report found, households in capital cities would spend $24,262 on transport each year or $466 a week, while households in regional areas spent $20,404 a year or $392 a week.

Australian Automobile Association managing director Michael Bradley said the rising prices, which represented more than 16 per cent of household income, showed budgets were being put under pressure.

"The cumulative effect of continually rising transport costs is a heavy burden at a time when Australians are feeling cost-of-living pressures across the board," he said. 

"Transport is a significant and unavoidable expense for households and is also one of the key drivers of general inflation."

Mr Bradley said the rising price of petrol and diesel fuels, higher prices for new vehicles and higher interest rates on car loans had a significant impact on costs. 

Figures from the Australian Institute of Petroleum showed Australians paid as much as $2.11 per litre during the quarter, with prices highest at the end of September. 

The AAA report found Sydneysiders paid the most for transport, at $27,730 a year, followed by Melbourne ($27,503) and Brisbane ($27,188).

But significant increases were reported in some regional towns including Alice Springs ($21,691), Geelong ($21,604) and Bunbury in Western Australia ($21,511), where weekly transport costs exceeded $400 a week for the first time.

The study, which is based on a household with two adults, children and two cars, also found car loan payments were highest in Perth and Bunbury, comprehensive car insurance costs were the most in Melbourne and Alice Springs, fuel costs were highest in Sydney and Bunbury, and public transport cost the most in Brisbane.

Despite the rising price of transport, the Federal Chamber of Automotive Industries reported Australia was on track to break record new vehicle sales in 2023 after more than 112,000 were sold in November and 1.11 million new vehicles were purchased throughout the year.

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