Dear Lifehacker, Is it possible to cheaply own a second car? I’m not so concerned about purchase price and petrol. I’m more worried about CTP, rego and comprehensive insurance options. This is just a car for occasional use by my wife, so $1250 a year minimum (my estimates for NSW) before it even leaves the driveway seems a bit much. Are there options for low-cost low-mileage small vehicles that aren’t so expensive? (We’re both well over 30) Cheers, Family Guy
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Unfortunately, the amount of driving you do isn’t factored into your annual registration fee. You can take your car on 50 epic road trips or leave it in the garage all year: either way, the rego will be the same. (In the former case, actually passing registration could be a bigger challenge, however.)
Naturally, there’s a lot more variation when it comes to compulsory third-party insurance and related costs. We passed your query over to Gizmodo’s resident car expert Campbell Simpson. Here’s what he came back with:
Is there a cheap way to own two cars? The short answer is not really. There’s a certain sunk cost in having a second car, and like you’ve realised, a lot of that is in the fact that there are some mandatory costs that aren’t avoidable.
The problem with CTP is that — for the most part — it’s a fixed price, based on the age of the vehicle as well as a few other factors like the age of the youngest driver, that driver’s previous driving record, and the postcode that the vehicle is garaged in. Unless there’s an outlier — in this example, with a MY2000 car in Sydney driven by a 30-year-old driver with a perfect record, QBE is $250 cheaper than the others’ approximately $850 quotes — you’ll almost certainly be paying a relatively fixed cost. The same is true of registration.
Non-compulsory insurances like third party property damage, third party plus fire and theft, and comprehensive insurance are much more variable, and can be adjusted significantly depending on your suburb, your driving history and also the vehicle that you purchase. As a general rule, older cars are more expensive to insure because they’re a larger crash risk, and the same is true of sporty cars, younger drivers, and male drivers — you might find a policy in your wife’s name for a Corolla might be much cheaper than your name in a WRX of the same age or price. On a cheap, occasional use car, I wouldn’t suggest comprehensive, purely because it’s significantly more expensive, and the agreed value of the vehicle will likely be too low to make a repair feasible in the first place.
Where you can potentially save a little money is by bundling your policies with a single provider. NRMA, for example, offers a sliding loyalty discount that increases the longer you keep your policies, and also with the more policies overall. Using two cars for both CTP and non-compulsory insurance, you’ll save 7.5 per cent overall. Again, there’s a caveat in that the cheapest overall provider for one car’s CTP or non-compulsory insurance might not be the cheapest for the other, and vice versa. Suffice to say, you might save a bit of money by bundling, or you might not.
If it’s for genuinely occasional use, and you’re living in a metropolitan area, a car-sharing service like GoGet or Hertz 24/7 or even Car Next Door might work out cheaper in the long run. When you consider that $1000-plus sunk cost of compulsory third party injury, third party property insurance and registration, maybe $500 of petrol per year, and a couple of hundred (at least) in maintenance — mandatory, especially on an older car, not only to pass yearly inspections but to keep you and your wife safe as well as other road users — you’ll get yourself 30-odd full-day rentals of a GoGet or similar sharing car over each year.
If you’re committed to the idea of owning two cars, the best thing I can suggest is to shop around, using a couple of different cars that you’re potentially interested in buying, to see which is cheapest overall — with the caveat that in some cases, you do get what you pay for, both for the car itself and the quality of the insurance.
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