If you earn a wage or salary and plan to buy a car in the next few months, the budget you sketched earlier in the year may already be out of date. New Australian Bureau of Statistics figures show living costs for employee households rose faster than for any other household type over the past year, and most of the pressure came from bills you cannot easily trim.
This article is for salaried buyers with a clean credit history who are comparing finance offers. It sets out what the ABS reported for the September 2026 quarter, works through what that rise means for the room left for a car repayment and ends with a short budget refresh. The ABS and RBA pages were checked on 11 November 2026.
What the September quarter living cost figures show
The ABS Selected Living Cost Indexes for the September 2026 quarter, released on 4 November 2026, recorded:
- Employee households: living costs up 1.9% in the quarter and 5.1% over the year, the largest rises of the five household types. In the June quarter the annual rise for employee households was 3.7%.
- All household types: quarterly rises between 1.1% and 1.9%, and annual rises between 3.8% and 5.1%.
- Main contributors: Transport, Housing, and Insurance and financial services rose for every household type. The ABS says the Transport rise was driven by higher automotive fuel prices.
- Mortgage interest charges: up 5.7% in the quarter for employee households, after an 8.2% rise in the June quarter. For employee households, Insurance and financial services rose 4.4% and Transport 3.5% in the quarter.
The ABS defines employee households as those whose principal source of income is wages and salaries. The ABS builds these indexes from what households actually pay out, and they include interest charges, which are excluded from the Consumer Price Index. The ABS notes that mortgage interest makes up a higher share of spending for employee households than for other household types.
Why the next figures may be higher again
The ABS says the September quarter rise in mortgage interest charges reflects the remaining effect of banks passing on the RBA's May cash rate increase, and that the September cash rate increase will show up in the December 2026 quarter figures. The RBA's cash rate history shows rises taking effect on 6 May (to 4.35%), 30 September (to 4.60%) and 4 November 2026 (to 4.85%). The November rise came after the period these figures cover.
If you hold a variable rate home loan, check the repayment your bank will charge after the latest change, not the one on your last statement. Our article on the big four home loan rate rise from 13 November covers the announced changes.
Worked example: what a 5.1% rise does to the room for a car repayment
Our own calculation, for illustration only. The assumptions are a household spending $5,500 a month on living costs a year ago, those costs rising by the employee household average of 5.1%, and a car loan over five years at an illustrative 8.50% p.a. with monthly repayments and no fees. The ABS figure is an average across employee households. Your own costs could have risen by more or less, depending on whether you have a mortgage, rent or own outright, and how much you drive.
- A 5.1% rise on $5,500 is $280.50 a month more than a year earlier.
- At 8.50% over five years, $280.50 a month is roughly the repayment on a $13,670 car loan.
- For comparison, a $45,000 loan on the same terms costs about $923.24 a month.
In other words, if your take-home pay has risen by less than about $280 a month over the year, the space for a car repayment in this example has shrunk by roughly the repayment on $13,670 of borrowing. A larger deposit, a cheaper car or a lower quoted rate are the levers that close that gap. Our guide on how much deposit to put down on a car loan covers the deposit side.
Refresh your budget before you compare car loans
- Use recent statements, not last year's figures. Total your spending from the last three months of bank and card statements, grouped into the same categories a lender asks about. Our guide to household expenses in a loan application lists them.
- Update the mortgage or rent line. Use the repayment that applies after your lender's latest rate change, or your current rent.
- Re-cost fuel and insurance. These rose in the quarter. Check your last few fuel receipts and the premium on your next renewal notice, not the one you paid a year ago.
- Add the running costs of the car you want. Registration, insurance, servicing, tyres and fuel for the new car belong in the budget alongside the repayment. Our car ownership budget worksheet sets these out.
- Compare complete offers. Look at the comparison rate, fees and repayment for the same amount and term from each lender. Our check of big four car loan rates in November 2026 shows how wide the published ranges are.
- Keep a buffer. Leave room for another rate change or an unexpected bill before you settle on a repayment.
For background on how lenders view living costs, our earlier article on June quarter living costs and car loan serviceability covers the previous release.
The bottom line
Employee households had the largest rise in living costs of any group in the year to September 2026, at 5.1%, driven by mortgage interest, fuel and housing costs. In our example, that rise takes up about the same monthly amount as the repayment on a $13,670 car loan. Before you compare finance, rebuild your budget from recent statements and current repayments, then explore car loan options or use our repayment calculators with the figures you have checked.
The living cost and cash rate figures are the ABS's and RBA's published data, checked on 11 November 2026. Our calculation is labelled and relies on the stated assumptions. This article is general information only and is not financial advice.
