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Transportation is putting increased pressure on the cost-of-living crisis for Australians, according to the latest data.

The average Australian household is spending 17 per cent of its income on transportation, after costs increased by more than three times the national inflation rate in 2023.

According to the Australian Automobile Association (AAA) – the peak body representing the NRMA, RACV, RACQ, RAA, RAC, RACT, and AANT motoring clubs – transport costs increased by 13 per cent over the year, compared to the official inflation rate of just 4.1 per cent.

This includes car loan repayments, insurance, servicing and tyres, roadside assistance, registration and compulsory third-party insurance, licencing, tolls, public transport, and fuel.

Between October and December 2023, households spent an average of $434.77 on transport costs each week – up from $384.86 over the same three-month period in the previous year.

The Consumer Price Index – the main tracker of inflation in Australia – was just 4.1 per cent in 2023, according to the Federal Government, compared to a 13 per cent jump in transport costs.

Data released by the AAA shows households living in capital cities are spending an average of 17 per cent of their incomes on transport costs, compared to 15.8 per cent for those living in regional areas.

For city dwellers, that translates to $24,402 annually, while those in the regional areas are spending $20,558 each year just on transportation.

Car loans are said to be by far the biggest cost, thanks to interest rates increasing from 0.10 per cent in April 2022 to 4.35 per cent today.

Fuel has also become more of a financial burden, accounting for more than 23 per cent of transport costs, according to the data.

Ben Zachariah

Ben Zachariah is an experienced writer and motoring journalist from Melbourne, having worked in the automotive industry for more than two decades. Ben began writing professionally more than 15 years ago and was previously an interstate truck driver. He completed his MBA in Finance in early 2021 and is considered an expert on classic car investment.

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