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How much does a 4WD really cost you?

4WD’s are expensive. I won’t sugarcoat it. They cost a fair bit to fuel up, to keep running and then there’s the rest of the costs; insurance, registration, loan costs and the cost of accessories.

The point of this post is not to put you off buying a 4WD, nor to horrify you with the amount of money you’ve blown on a 4WD (or a few) in the past (or now!), but just to give you an idea of how expensive they really are.

Everyone gets to make their own decisions in life, and I’m not here to tell you what to spend your money on. However, I believe everyone has the right to understand how their financial choices can impact them. Buying the wrong 4WD for your situation can hurt you financially for the rest of your life. That said, I’m not forcing you to read on; if you aren’t interested, that’s cool. You can easily exit and continue on your merry way.

Our Isuzu Dmax

4WD’s aren’t cheap to own!

I’ll admit that I’ve spent a huge amount of money on 4WD’s over the years, and I’m only onto my third one. I’d do some things differently if I had my time again, but for the most part I’ve had a heap of fun and the memories made make up for any financial cost. I’m pretty confident my wife would agree (although to be safe I won’t ask her!).

Right now, take a guess how much you think owning a 4WD costs you each year, and lets see how accurate you are. How much does your 4WD really cost you, each year? $2000? $5000? $10000? More? Read on to find out!

80 Series Land Cruiser

Our old 80 Series Land Cruiser with a bucket load of money spent on it!

What are the expenses of owning a 4WD?

Please note this post excludes the actual purchase price which you also have to factor in.

Fuel

You need fuel to get anywhere in a 4WD. If you don’t have a loan, this usually tops the list of expenses on a 4WD, but not always. Fuel economy varies wildly depending on the circumstances, with some 4WD’s as low as 8L/100km working their way through to around 35L/100km when towing a big trailer in terrible conditions.

If you do the average 15,000km a year at $1.35 a litre and 13L/100km, you will pay $2632 each year in fuel.

Filling the Dmax with fuel

Fuel isn’t cheap, especially when you are remote

Maintenance

Tyres, general servicing and replacement of worn components is usually the next highest cost of owning a 4WD. The older the 4WD, the higher the maintenance costs (in general). As things age more and more parts need replacing. Believe me; I owned a 28 year old Land Cruiser!

For a medium to full size 4WD that is relatively new, expect to pay around 7 to 10 cents a kilometre ($1050 to $1500) per year in tyre and servicing costs. If you run better quality tyres than what the vehicle originally came out with then that will rise a little bit.

Maintenance will vary hugely from vehicle to vehicle. Some people do everything really well, and others don’t fix anything until it completely breaks. I had some hefty bills with my Land Cruiser; around $5000 to replace the head and head gasket, another $1700 to rebuild the fuel pump and dynotune it, and a couple of other bills that would have been over $2000 for transfer case rebuilds etc.

Sometimes you have a fantastic run with a vehicle, where nothing major needs work for a long time, and other times its one big thing after another (which is one of the reasons I sold my 80 Series!). The first few years were great, and it went downhill from there.

Mundaring Powerlines 4WD Track

The harder you use your 4WD, the more it will cost you in maintenance

4WD Insurance

Another wildly varying cost of owning a 4WD is insurance. If you don’t at least have third party insurance, I reckon you are mad. The risk is not worth it. However, this should range between about $600 a year to $2000 a year for comprehensive 4WD insurance. Your age, driving history, location, accessories fitted and replacement cost of the vehicle will all play a huge role in determining the premium, as does the value your vehicle is insured for, what you are covered for and what modifications you have fitted.

Third party insurance is cheaper, with fire and theft adding a little more. Only you can decide what risks to take, but the general rule is if you can’t afford to lose it, it should be insured.

Katherine tree vs car incident

4WD insurance is important for when things like this happen!

Registration

In Western Australia, registration for a normal 4WD is about $900 a year. I understand its even more in other states, and that it varies depending on whether your vehicle is classed as ‘commercial’ or not.

Loan costs

If you want to save an absolute bucket load of cash, this is the area you need to look at. It’s been said many times before that you should never take out a loan on a depreciating item (like a car!), so avoiding a loan in the first place is a good start.

However, if you take out a loan at a normal car loan interest rate (around 12%) you will get hammered with extra expenses. A 25k vehicle will cost you $3000 a year in interest. A 50k vehicle will cost you $6000 a year in interest, and a 90k vehicle will cost you nearly $11,000 a year in interest! That’s excluding any of the fee’s charged for managing the loan etc. Over a 3 – 5 year loan period, you literally throw a huge chunk of cash away for the pleasure of having a nice car, right now.

A lot of adventure can be had with money you’d save on not having a loan!

Modifications and accessories

Another major, and often unforeseen expense of owning a 4WD is modifications and accessories. When you first buy a 4WD, you think I’ll just do a couple of small modifications to the car. Then, when you’ve owned it for a few months you decide to add something else, and then something else and the list grows, and grows and often never ends.

If you aren’t careful, you’ll end up with a 4WD that has more money on accessories on it than the vehicle itself. When I sold our 80 Series, it had 28k worth of accessories bolted on (not that I paid or fitted all of that!). It literally had more insurance coverage through Club 4×4 for modifications than the vehicle itself (and this isn’t uncommon!)/

If you do the basics – Bull Bar, winch, driving lights, UHF radio, tyres, drawer system, dual batteries and a snorkel you are looking at around 4 – 15k, depending on what sort of quality level you go for and whether you install it or pay someone to do it.

Dmax motor

You can spend a fortune on mods for a 4WD!

Depreciation

Say what? Depreciation is the value that your 4WD loses as it gets older. If you buy a brand new Land Cruiser for 85k, in 15 years its only going to be worth about $20k. That’s 65k lost over 15 years, or $4300 a year. The moment you drive a brand new car out of the dealership expect it to lose a significant amount of money. That’s just life for you.

Vehicles depreciate the most in the first 5 years, and some brands are much worse than others. The luxury brands, like Lexus and Mercedes depreciate very fast. If you are aware of this, you can pick up some steals as they get older!

There are some vehicles that are just freaks of nature. The 100 Series factory turbo diesel Land Cruiser is one of them; they have held their value insanely well up until very recently. At about 65k new, you could sell one that was 10 years old for $35 – 40k fairly easily! The 80 series too, is one of the few older 4WD’s that still command huge prices. My 28 year old one sold for 21k!

1HDT motor

Some 4WD’s depreciate fast, and others hold their value very well

How can you keep the costs down?

Get a good interest rate

If you are taking out a loan for your 4WD, get a good interest rate. This will make a massive difference. A common vehicle loan is around 12% interest every year. Do a bit of shopping around and you should be able to get it down to 5 – 7%. If you look a bit harder, you can get 3%, and occasionally there are dealership 1% finance deals. 

On a 40k 4WD, 12% interest is $92 a week, compared to $38 a week if you get it down to 5%. Over 5 years, that’s $14,000 difference!

Plan your modifications

If you take the time to really work out what you want from your 4WD before you buy it, you’ll save a fortune. Far too many people spend a fortune modifying a 4WD into something that it will never be. Before you lay your hard earned down, really know what modifications you are going to do, and how that is going to build the perfect 4WD for you. If you don’t do this, you’ll keep modifying and throwing money at the vehicle.

I’ve seen too many 4WD’s that have been modified beyond what they were ever intended to do, and they still don’t do a great job. Start with the right 4WD for the job and you’ll save a fortune. I’ve written a post on this that explains more – How to build the perfect 4WD.

80 series land cruiser build

Plan your build, and start with a suitable 4WD from the beginning

Do as much servicing as you can

It’s worth while knowing how to do the basics on your 4WD, and if you can do it without upsetting the dealerships and warranty side of things, doing your own servicing is a good idea (if you are competent!). At least you know its done well, and you can save a fortune doing it. For newer cars this is harder as most people want to keep their warranties in place.

Shop around

When it comes to actually putting your hard earned down, shop around, a lot. Whether its the 4WD itself, a bull bar, locker, roof racks or storage system by spending a few hours ringing around you can save an absolute fortune. Car dealers make money buying and selling cars, so there is always wiggle room. Don’t be afraid to walk away from a deal.

Don’t spend more than you can afford

There are some very tidy 4WD’s on the market. A number of them are being sold because their owners can’t afford to own them. The loan repayments are one thing, but don’t forget everything else that you have to pay. A cheaper 4WD that you can afford to use is better than an expensive one that you can’t.

Decked out Patrol

There’s no point having a nice 4WD if you can’t afford to use it

Tax deductability

In some cases, you can get tax breaks for your 4WD. If you use it for work (carrying tools around for example) or because you actually need a 4WD to access your work place, then you may have the option of claiming some of the expenses. I am not a financial adviser, so I won’t go into any more specifics than that, but speak to your accountant. There can be some fantastic arrangements to be had with newer vehicles if you can claim them (or part of them) through your work.

Whats the total cost over a 5 year period?

The final result will vary a lot. For someone who buys a 3 grand Suzuki Sierra that runs on the smell of an oily rag, its only a few grand a year. If you have a decked out Land Cruiser Sahara under finance, it can be around 2 grand a month.

If we add up the costs above, excluding a loan, depreciation and modifications, its $5800 a year. The more modern your vehicle is the higher the depreciation, and that will go up significantly.

RAC suggests the average cost of owning a 4WD is between $220 to $285 a week. That’s $11,000 to $15,000 a year to own a 4WD (and if you have an expensive one its more than that!). Certainly not chump change for the average person, and that sort of money buys you a pretty amazing holiday (like 3 months exploring the Kimberley and Northern Territory!)

Over 5 years then, that’s anywhere from 12k to 75k, without even looking at the original price you paid for the 4WD!

Emma Gorge swimming

3 months of long service leave up north; absolute paradise.

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