Australia’s obsession with SUVs and oversized utes shows no signs of slowing down. In 2024, SUVs emerged as the most popular new car choice with an estimated 57% market share, while light commercial vehicles—including utes—accounted for 22% of purchases. Traditional passenger cars such as sedans and hatchbacks lagged far behind at just 17%. This dramatic shift in vehicle preferences is not only altering our roads but is also imposing a range of hidden costs on society.
Bigger Cars, Bigger Homes?
In January, South Australian Premier Peter Malinauskas proposed new laws requiring developers to build larger garages—at least half a metre wider and 60cm longer than current standards—to accommodate the burgeoning fleet of giant cars. However, critics quickly pointed out that such a move could add tens of thousands of dollars to the cost of new homes. SA Greens transport spokesperson Robert Simms slammed the proposal:
“It’s absurd that in the middle of a climate crisis, the state government would be forcing developers to build bigger garages. All this will do is entrench South Australia’s reliance on car travel.”
This debate over garage sizes has exposed a broader issue: our cultural shift toward larger vehicles is already inflating housing and infrastructure costs.
Environmental and Economic Toll
The surge in SUV and ute purchases carries significant environmental consequences. Emissions experts warn that the increasing production and operation of these bulky vehicles contribute heavily to Australia’s carbon footprint. Globally, SUVs emit around 1 billion tonnes of CO2 each year—a figure that flies in the face of efforts to reduce greenhouse gas emissions. Professor Paul Roberts, deputy director at the Western Australian Centre for Road Safety Research, expressed his disbelief:
“It’s kind of bizarre that at a time when we’re worrying about global warming we’re seeing an increase in cars with these engines. There’s no political bravery about this.”
Fuel Costs and Emissions Disparities
A 2023 analysis revealed that the booming popularity of SUVs has led Australians to spend an extra $13 billion annually on fuel. When comparing fuel consumption, stark differences emerge. For example, the Ford Ranger dual-cab ute—the most popular vehicle of 2024—costs its owner just over $2,000 per year to fuel, whereas a Toyota Corolla hybrid, the leading passenger car, averages about $1,100 for the same distance of 14,000km. Moreover, the Ranger emits roughly 200 grams of CO2 per kilometre, compared to the Corolla’s 90 g/km. Over a year, these figures translate to the Ranger producing about 2.81 tonnes of CO2 versus 1.27 tonnes for the Corolla.
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These disparities not only exacerbate environmental issues but also push against the government’s vehicle efficiency standards, threatening broader efforts to reduce emissions across the economy.
The Hidden Costs: Insurance and Safety
The financial impact of Australia’s preference for big cars extends beyond fuel and emissions. Larger vehicles are statistically more likely to be involved in severe collisions, posing higher risks to both occupants and other road users. Insurance companies are increasingly factoring these risks into their premiums. While an Insurance Council spokesperson downplayed vehicle size as a factor, they acknowledged that the rising average base price of cars and the complexity of repairs are contributing to higher insurance costs.
Industry analyst Danny Martin from IBISWorld explains:
“Insurers are aware that SUVs tend to cause more damage to smaller cars and pose greater risks to pedestrians, so they raise premiums across the board to mitigate potential losses. It’s similar to how home insurance is adjusted for properties in flood-prone areas.”
Higher insurance premiums, in turn, raise the overall cost of owning and operating a large vehicle, affecting not only individual drivers but also businesses that rely on these vehicles.
Tax Perks and Policy Incentives
A host of government tax incentives and concessions have played a pivotal role in shaping Australia’s vehicle market. Designed initially to support small businesses with commercial vehicle needs, policies such as the instant asset write-off scheme and full expensing have inadvertently fueled a surge in SUV and ute purchases. These policies allow businesses to deduct the full cost of a vehicle—often exceeding $100,000—in a single year, making larger vehicles more attractive even for sole traders and professionals who traditionally would not require such capacity.
Moreover, heavy vehicles like utes and 4WDs are exempt from fringe benefits tax, and commercial vehicles meeting certain payload criteria enjoy a luxury car tax exemption. These benefits have cost Australians hundreds of millions in foregone revenue and have effectively subsidised the shift towards larger, less fuel-efficient vehicles.
Urban Implications: Safety and Congestion
Beyond economic and environmental costs, the rise in large vehicle ownership has profound effects on urban environments. Larger vehicles occupy more space on already congested roads and make urban driving more challenging for occupants of smaller cars and pedestrians. Independent transport expert Marion Terrill warns:
“The presence of these enormous vehicles reduces lane capacity and hinders visibility, causing drivers to slow down and increasing overall congestion. These delays have a real cost in terms of lost time and reduced efficiency for everyone.”
Terrill suggests that nudges such as introducing small car-only parking zones, higher licence fees for larger vehicles, or even requiring specialty training for SUV drivers could help mitigate these issues without resorting to outright bans or punitive measures.
Manufacturers’ Profit Motives
Automakers also have a vested interest in promoting larger vehicles. Industry sources reveal that manufacturers see higher profit margins in SUVs and large utes, with models like Ford’s F150 pickup truck being central to their global profitability. In fact, the F150 is reported to account for about 90% of Ford’s profits in some markets. This focus on big vehicles is so pronounced that companies have even withdrawn from markets where smaller, fuel-efficient cars are preferred.
As manufacturers continue to prioritise the development and sale of larger vehicles, consumers are presented with a market where perceived value—and higher price tags—reinforces the popularity of these models despite their hidden societal costs.
A Cost That Society Bears
The cumulative impact of these factors is significant. From escalating fuel bills and higher insurance premiums to increased environmental damage and urban congestion, Australia’s love affair with big cars is costing society dearly. The additional expenses incurred by businesses and households are subtly passed on through higher prices and reduced public investment in infrastructure.
Moreover, these vehicles’ persistent presence on our roads may undermine future efforts to reduce emissions and promote safer, more efficient transportation alternatives.
Looking to the Future
While some policymakers and experts advocate for stricter regulations or disincentives for large vehicles, the challenge lies in balancing consumer choice with public good. Rather than a draconian ban on big cars, a more measured approach may involve tweaking tax policies, encouraging more sustainable urban planning, and promoting a cultural shift towards smaller, more efficient vehicles.
As Australia grapples with the twin challenges of climate change and urban congestion, the question remains: Is our continued love for big cars worth the cost? For now, the evidence suggests that while large vehicles offer benefits to individual owners, society at large is paying a steep price—economically, environmentally, and in terms of road safety.
