Car ownership costs more than most people expect. Beyond the purchase price, you face ongoing expenses like fuel, servicing, insurance, registration, and tyres that add up quickly. Finding a vehicle that keeps these running costs low can save you thousands of dollars each year.
This guide reveals seven cars that deliver the lowest running costs in Australia for 2025. We break down real numbers for each vehicle’s monthly expenses, explain why they cost less to run than competitors, and show you which insurance options help keep your total ownership costs down. Whether you need a city runabout, family car, or your first vehicle, you’ll find a practical option that protects your budget without sacrificing reliability.
1. National Cover car insurance
Choosing the right insurance provider cuts your running costs before you even select a vehicle. National Cover delivers comprehensive car insurance with rates that consistently undercut major competitors, making your total ownership expenses lower regardless of which car you drive. Their price-beat guarantee ensures you get the cheapest available coverage without sacrificing protection.
Running costs snapshot
You can reduce your annual insurance spend by $200 to $500 when you switch to National Cover from mainstream providers. Monthly premiums start from competitive rates that leave more money in your budget for fuel, servicing, and other essential expenses. Their transparent pricing shows you exactly what you pay for coverage, with no hidden fees that inflate your costs down the track.
Why it is cheap to run
National Cover uses ASIC-licensed analysts who research pricing across the market to offer you the lowest rates. Their streamlined operations cut out the advertising costs that push up premiums at bigger insurers. You get comprehensive coverage including storm damage, theft, and third-party liability without paying premium prices that drain your budget unnecessarily.
"Smart price research and a price-beat guarantee help clients save money while maintaining maximum coverage."
Who it suits best
Budget-conscious drivers who want full protection without overpaying find the best value here. You benefit most if you currently pay high premiums or own vehicles used for rideshare, delivery, or commercial purposes. First-time buyers also appreciate the straightforward policies that don’t include confusing extras you never use.
Insurance tips and cover options
Compare your current premium against National Cover’s quote to see potential savings. Request their price-beat service if you have a lower quote from elsewhere. Choose comprehensive cover over third-party options to protect your investment fully, and ask about excess discounts when using their preferred repairers to reduce out-of-pocket costs after claims.
2. Suzuki Swift Hybrid
The Suzuki Swift Hybrid takes the crown as one of Australia’s most affordable vehicles to own in 2025. This light hatchback combines a fuel-efficient mild-hybrid system with low purchase price and minimal servicing costs, making it an unbeatable option when you calculate total running expenses. RACQ research confirms it delivers exceptional value across all ownership categories.
Running costs snapshot
Your total monthly expense sits at $874 when you factor in all ownership costs over five years, according to RACQ’s 2025 vehicle cost survey. You pay a drive-away price of $24,490 for the manual variant, which keeps your initial outlay low. Fuel consumption averages around 4.9L/100km thanks to the mild-hybrid technology, translating to roughly $85 monthly for typical city and highway driving. Servicing costs stay minimal with $250 to $350 per annual service under Suzuki’s capped-price programme.
Why it is cheap to run
Mild-hybrid technology reduces fuel consumption by recovering energy during braking and assisting the 1.2-litre three-cylinder petrol engine. Your servicing intervals stretch to 12 months or 10,000 kilometres, reducing workshop visits compared to vehicles needing more frequent attention. The five-year unlimited-kilometre warranty protects you from unexpected repair bills that typically hit older vehicles outside coverage periods.
"RACQ’s 2025 study confirms the Swift Hybrid delivers the lowest monthly ownership costs among all surveyed vehicles."
Who it suits best
City commuters who rack up moderate annual kilometres find this vehicle ideal for cutting running expenses. You benefit most if your daily drive involves stop-start traffic where the hybrid system recovers the most energy. First-car buyers appreciate the affordable entry price combined with modern safety features and wireless smartphone connectivity that make daily driving more convenient.
Insurance tips and cover options
Compare comprehensive insurance quotes specifically for the Swift Hybrid, as its safety rating and theft statistics directly affect your premium. Select an agreed value policy rather than market value to guarantee full replacement cost if you total the vehicle. Consider raising your excess to $750 or $1,000 if you have a clean driving record, which typically reduces your annual premium by 10 to 15 percent without significantly increasing financial risk.
3. Kia Picanto
The Kia Picanto claims the title of Australia’s cheapest car to buy and remains among the cheapest cars to run throughout 2025. This city-sized hatchback measures just 3,595mm in length, delivering exceptional fuel economy and rock-bottom purchase costs that make it an attractive option when you calculate total ownership expenses. Its combination of affordability and Kia’s generous warranty protection creates compelling value for budget-focused buyers.
Running costs snapshot
You pay just $21,340 drive-away for the base Picanto Sport manual, making it Australia’s most affordable new car. Your monthly running costs average approximately $850 to $900 when you include fuel, insurance, registration, and servicing over a five-year period. The 1.2-litre four-cylinder engine sips fuel at around 5.2L/100km, costing you roughly $90 monthly for typical urban driving. Kia’s capped-price servicing keeps annual maintenance between $200 and $300, protecting you from unexpected workshop bills.
Why it is cheap to run
Compact dimensions reduce tyre costs and make parking effortless, while the naturally aspirated engine requires less complex servicing than turbocharged alternatives. Kia backs every Picanto with a seven-year unlimited-kilometre warranty, which covers you far longer than most competitors and eliminates repair costs that typically emerge after shorter warranty periods expire.
"The Picanto’s seven-year warranty and low purchase price combine to deliver the lowest total cost of ownership in Australia’s new car market."
Who it suits best
New drivers appreciate the Picanto’s manageable size and straightforward controls that build confidence behind the wheel. You benefit most if you primarily drive in urban areas where parking spaces favour smaller vehicles. Solo commuters or couples without children find the four-seat layout perfectly adequate for daily transport needs.
Insurance tips and cover options
Request quotes from multiple insurers, as the Picanto’s low value and strong safety rating often attract competitive premiums. Choose comprehensive cover despite the affordable price, as replacement costs still exceed what most people can comfortably pay from savings. Consider an agreed value policy set at your purchase price to guarantee full reimbursement if theft or total loss occurs within the first year of ownership.
4. Toyota Corolla Ascent Sport hybrid
The Toyota Corolla Ascent Sport hybrid stands as Australia’s most fuel-efficient medium car and one of the cheapest cars to run in 2025. This proven sedan combines Toyota’s legendary reliability with modern hybrid technology that slashes fuel costs, making it the smart choice when you need more space than a light car offers. RACV research consistently ranks the Corolla hybrid among the lowest-cost vehicles to own across all categories.
Running costs snapshot
Your total monthly expense sits at $1,001 when you account for all ownership costs over five years, according to RACV’s 2025 vehicle cost survey. You pay an estimated on-road price of $34,543, which positions it competitively against non-hybrid medium cars. Fuel consumption averages just 3.8L/100km thanks to the 2.5-litre hybrid system, costing you approximately $65 monthly for typical combined driving. Toyota’s capped-price servicing programme keeps annual maintenance between $195 and $250, delivering predictable workshop costs that won’t surprise your budget.
Why it is cheap to run
Hybrid technology recovers energy during braking and uses electric power at low speeds, dramatically cutting fuel consumption compared to petrol-only alternatives. Your servicing intervals stretch to 12 months or 15,000 kilometres under Toyota’s maintenance schedule, reducing workshop visits that eat into your time and money. The five-year unlimited-kilometre warranty protects you from mechanical failures that typically cost thousands to repair outside coverage periods.
"RACV research confirms the Corolla hybrid delivers the lowest running costs in Australia’s competitive medium car segment."
Who it suits best
Families needing five-seat capacity and boot space for school runs, shopping, and weekend trips find this sedan ideal for balancing space with economy. You benefit most if your driving includes a mix of urban commuting and highway travel where the hybrid system operates at peak efficiency. Rideshare drivers appreciate the exceptional fuel economy that directly increases take-home earnings per shift.
Insurance tips and cover options
Compare comprehensive insurance quotes from multiple providers, as the Corolla’s excellent safety rating and low theft rate often result in competitive premiums. Select a policy that covers rideshare usage if you plan to use the vehicle commercially, as standard personal policies typically exclude this cover. Consider reducing your excess to $500 rather than higher amounts, as the Corolla’s popularity means replacement parts remain affordable and repair costs stay reasonable after minor accidents.
5. BYD Dolphin Dynamic
The BYD Dolphin Dynamic represents Australia’s cheapest electric vehicle option and one of the most economical cars to run in 2025. This compact EV hatchback eliminates petrol costs entirely while delivering a claimed 427km driving range from its 60.48kWh battery, making it a practical choice when you calculate total ownership expenses. RACQ’s 2025 research confirms the Dolphin outperforms petrol equivalents in the small passenger category for running costs.
Running costs snapshot
Your total monthly expense averages $889 when you factor in all ownership costs over five years, positioning it as one of the cheapest cars to run despite higher purchase prices for electric vehicles. You pay approximately $40,300 drive-away after state government EV incentives in most territories. Charging costs sit around $65 to $75 monthly when you charge at home using off-peak electricity rates, while public DC fast charging adds premium pricing. BYD includes six years of free scheduled servicing, eliminating workshop costs that typically range from $200 to $400 annually for petrol vehicles.
Why it is cheap to run
Electric drivetrain removes the need for engine oil changes, timing belt replacements, and fuel filter services that drain money from petrol car budgets. Your electricity costs work out roughly 70 percent cheaper than petrol per kilometre when you charge at home overnight. BYD backs the Dolphin with a six-year unlimited-kilometre warranty plus eight years of battery coverage, protecting you from expensive failures that typically hit vehicles outside standard protection periods.
"RACQ data shows the BYD Dolphin delivers lower monthly costs than petrol equivalents despite its higher purchase price."
Who it suits best
Urban commuters who drive less than 200km daily and can charge at home overnight benefit most from the Dolphin’s range and charging characteristics. You find maximum value if your dwelling includes off-street parking with electrical access for installing a home charger. Environmentally conscious buyers appreciate zero tailpipe emissions without sacrificing practical transport needs.
Insurance tips and cover options
Request quotes from insurers experienced with electric vehicles, as battery replacement costs significantly affect premium calculations. Choose comprehensive cover that specifically includes high-voltage battery damage from accidents or electrical faults, as standard policies sometimes exclude this expensive component. Consider setting your excess at $1,000 to $1,500 to reduce annual premiums, since the Dolphin’s advanced safety features and solid build quality reduce accident likelihood compared to cheaper alternatives.
6. Hyundai Venue
The Hyundai Venue delivers SUV practicality without SUV running costs, making it one of the cheapest cars to run in Australia’s small crossover segment for 2025. This compact SUV sits higher than a conventional hatch while maintaining fuel efficiency and affordable servicing that keeps your total ownership expenses low. Hyundai’s current drive-away pricing deal makes it even more accessible for budget-focused buyers seeking extra ground clearance and cargo space.
Running costs snapshot
Your total monthly expense averages approximately $850 to $900 when you account for all ownership costs over five years, positioning it competitively against light hatchbacks. You pay just $25,990 drive-away for the base manual variant under Hyundai’s promotional pricing available until June 30, 2025. The 1.6-litre four-cylinder engine consumes around 6.5L/100km in combined driving, costing you roughly $110 monthly for typical urban and highway use. Hyundai’s capped-price servicing keeps annual maintenance between $240 and $330, protecting you from unexpected workshop bills that erode your transport budget.
Why it is cheap to run
Naturally aspirated engine requires simpler servicing than turbocharged alternatives, reducing complexity and parts costs during routine maintenance. Your 12-month service intervals mean fewer workshop visits that consume your time and money throughout the ownership period. Hyundai backs the Venue with a five-year unlimited-kilometre warranty, eliminating repair costs that typically emerge once shorter coverage periods expire on competing vehicles.
"The Venue combines SUV versatility with hatchback-level running costs, delivering practical transport without premium expenses."
Who it suits best
Small families needing extra cargo height for prams, shopping, and sporting equipment find the Venue’s elevated load floor more practical than conventional hatches. You benefit most if you occasionally drive unsealed roads where the increased ground clearance provides confidence that low-slung cars cannot match. Older drivers appreciate the higher seating position that makes entry and exit easier than ducking into lower vehicles.
Insurance tips and cover options
Compare comprehensive insurance quotes across multiple providers, as the Venue’s safety features and SUV classification affect premium calculations differently between insurers. Select a policy with new-for-old replacement if available within the first two years, guaranteeing you receive a brand-new vehicle if total loss occurs during this period. Consider setting your excess at $600 to $800 to balance affordable premiums against manageable out-of-pocket costs after minor accidents.
7. Mazda 2 G15 Evolve
The Mazda 2 G15 Evolve remains one of the cheapest cars to run in Australia’s light car segment despite Mazda discontinuing its more affordable base grades in 2025. This proven hatchback delivers reliable Japanese engineering with modest fuel consumption and straightforward servicing that keeps your total ownership expenses predictable. Your purchase gets you a refined city car that punches above its weight class for driving dynamics and interior quality.
Running costs snapshot
You pay $30,402 drive-away for the Evolve hatch, positioning it as Mazda’s most accessible new car offering. Your monthly running costs average approximately $900 to $950 when you factor in fuel, insurance, registration, and servicing over five years. The 1.5-litre four-cylinder engine consumes around 5.3L/100km in combined driving, costing you roughly $90 monthly for typical urban use. Mazda’s capped-price servicing programme keeps annual maintenance between $280 and $350, providing cost certainty that helps you budget for ownership without unexpected workshop surprises.
Why it is cheap to run
Naturally aspirated engine requires less complex servicing than turbocharged alternatives, reducing parts costs and maintenance complexity throughout your ownership period. Your 12-month service intervals minimise workshop visits that consume time and money over the vehicle’s lifespan. Mazda backs the 2 with a five-year unlimited-kilometre warranty, protecting you from mechanical failures that typically cost thousands to repair once shorter coverage periods expire.
"The Mazda 2’s naturally aspirated engine delivers reliable performance with lower servicing complexity than turbocharged competitors."
Who it suits best
Urban professionals who value driving engagement alongside economy find the Mazda 2’s responsive handling more enjoyable than competitors focused purely on cost-cutting. You benefit most if your daily commute involves winding roads where the balanced chassis delivers confidence that appliance-like alternatives cannot match. Downsizers appreciate the refined interior that feels more premium than the affordable price suggests.
Insurance tips and cover options
Compare comprehensive insurance quotes from multiple providers, as the Mazda 2’s strong safety rating and low theft statistics often result in competitive premiums. Choose a policy that includes hire car cover for up to 30 days, ensuring you maintain mobility if accident repairs take longer than expected. Consider setting your excess at $700 to balance affordable annual premiums against reasonable out-of-pocket costs after minor incidents.
Final thoughts
Selecting one of these seven cheapest cars to run cuts your annual transport expenses by thousands of dollars compared to thirstier, higher-maintenance alternatives. Your total ownership costs depend on smart purchasing decisions and protecting your investment with affordable insurance that doesn’t drain your budget.
National Cover’s comprehensive car insurance delivers the coverage you need at prices that keep your running costs low. Switch providers today and combine your fuel-efficient vehicle choice with premium insurance rates that competitors struggle to match. You’ll drive away knowing both your car and wallet benefit from decisions that prioritise long-term value over short-term compromises.
Calculate your potential savings by comparing your current insurance premium against what you could pay with the right provider. Every dollar you save on coverage stays in your pocket for the things that matter most to you.
