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It seems the denser the postcode in Australia, the smaller the private vehicles, and I wouldn’t be surprised if we have more Toyota Priuses and bicycles per capita in inner Sydney at least than any other part of Australia! This is in stark contrast to 20 to 30 years ago when the Inner West of Sydney was full of hotted-up, fuel-guzzling motor heads driving V8 anythings, run on leaded petrol.

Times have changed and it’s not just in inner-city Sydney, but across across the nation. Australians are moving towards smaller, more ‘fuel efficient’ cars. But are they actually saving anyone money?

When buying a car, whether you’re environmentally conscious or not, many of us will consider fuel economy as part of our purchase decision. However, the most fuel-efficient cars are also much more expensive to purchase, have a lower range (km’s) and can be more difficult to maintain given the scarcity of parts and servicing knowledge.

So the question comes down to this: when considering fuel efficiency, is your priority the overall running cost of the vehicle or reducing your impact to the planet? If you said bottom-line cost, then it’s wise to factor in all costs, not just fuel.

When it comes down to it, hybrids and electric cars cost more to produce than those that run on petrol. Couple this with the fact that they are still less popular, and the end result is not only a higher purchase price but also more expensive parts in the lifetime of the vehicle.

In the last 3 years, less than 1,000 electric cars have been sold in Australia. Despite the big hype from manufacturers at the time, sales are so much lower than expected that in 2015 the purchase price in some cases has been reduced by as much as 33%, while some have been withdrawn from the Australian market altogether.

There’s no doubt this will change over time as technology improves, and government regulations catch up to incentivise green-friendly cars (as seen in other countries). However, the fact remains that small electric cars are not suitable for many Australians, particularly if they have families or need to do some heavy-duty driving for work, which makes it harder to reach the critical mass required to reduce manufacturing costs.

So, how do you compare fuel efficiency versus overall cost? Below is an overview of the overall five-year cost of the top 10 fuel-efficient cars in Australia, compared with the top 10 most popular cars. Costs are calculated based on a new car, driving 15,000km per annum under normal conditions over five years, at 8.5% finance in NSW.

Top 10 fuel-efficient cars in Australia

		Fuel type	Fuel consumption L/100km	Base purchase price	Annual finance cost	Annual registration cost	Annual insurance cost	Annual fuel cost	5-year maintenance and repair cost	Total cost over 5 years
1	BMW i3	Electric	0	$63,900	$15,732	$284	$1,864	$0	$8,820	$98,220
2	Mitsubishi i-MIEV	Electric	0	$48,800	$12,012	$232	$1,720	$0	$3,600	$73,420
3	Nissan Leaf	Electric	0	$39,990	$9,840	$284	$1,430	$0	$4,441	$62,211
4	Holden Volt	Hybrid	1.2	$59,990	$14,772	$433	$1,490	$229	$3,276	$87,896
5	Audi A3	Hybrid	1.6	$62,490	$15,384	$232	$1,263	$305	$6,732	$92,652
6	Mitsubishi Outlander PHEV	Hybrid	1.9	$47,490	$11,688	$433	$1,139	$362	$4,811	$75,093
7	BMW i8	Hybrid	2.1	$299,000	$73,608	$284	$2,798	$400	$13,230	$398,680
8	Porsche Panamera	Hybrid	3.1	$296,900	$73,092	$433	$2,906	$591	$12,980	$398,090
9	Porsche Cayenne	Hybrid	3.4	$139,200	$34,272	$433	$2,804	$648	$11,992	$220,249
10	Toyota Prius	Hybrid	3.9	$32,490	$8,004	$284	$1,127	$743	$5,494	$56,284

Top 10 most popular cars in Australia

		Fuel type	Fuel consumption L/100km	Base on-road purchase price	Annual finance cost	Annual registration cost	Annual insurance cost	Annual fuel cost	5-year maintenance cost	Total cost over 5-years
1	Toyota Corolla	Petrol	6.1	$24,440	$6,012	$433	$1,080	$1,164	$5,868	$49,302
2	Mazda 3	Petrol	5.7	$24,490	$6,012	$433	$1,008	$1,092	$4,992	$47,715
3	Hyundai i30	Petrol	7.3	$24,490	$6,024	$284	$1,068	$1,391	$4,992	$48,826
4	Holden Commodore	Petrol	9.0	$34,980	$8,616	$433	$1,540	$1,715	$5,976	$67,491
5	Toyota Hilux	Diesel	7.3	$53,990	$13,296	$433	$1,490	$1,653	$3,840	$88,201
6	Mazda CX-5	Petrol	6.4	$32,990	$8,124	$433	$1,161	$1,219	$8,448	$62,382
7	Toyota Camry	Hybrid	5.2	$30,490	$7,248	$433	$1,128	$991	$4,574	$53,574
8	Volkswagen Golf	Petrol	5.4	$23,490	$5,784	$433	$1,128	$1,032	$5,424	$46,562
9	Ford Ranger	Diesel	6.9	$47,690	$11,736	$433	$1,487	$1,314	$5,784	$82,447
10	Mitsubishi Triton	Diesel	7.1	$39,490	$9,720	$433	$1,279	$1,391	$3,840	$67,956

Taking this data, we can compare the five-year cost of the greenest car in Australia with the most popular car in Australia; with its high purchase and insurance costs, the BMW i3 has a five-year cost of $98,220. Meanwhile, the Toyota Corolla is half the cost at $49,302. The average lifetime cost of the most fuel-efficient cars is $156,276 versus the top-selling cars, which came to $61,446 and none of the top 10 fuel-efficient cars made the top 10 bestselling cars list.

Why? The higher purchase price of the most fuel efficient cars puts most of these vehicles out of reach for many Australians, with the more cost-effective of these vehicles tending to be too small and impractical for most.

It is for these reasons that fuel efficiency doesn’t always mean cheaper overall. Ultimately, if your priority is reducing your impact on the planet then definitely go for the most fuel efficient and eco-friendly models. However, if you’re more concerned with bottom-line costs then you need to factor in more than just fuel efficiency in your next purchase.