Heya,
I need to renew my licence and got sent a letter from VicRoads.
So here's what I don't understand:
3 Year Licence = $82.80
$82.80 / 3 = $27.60
10 Year Licence = $283.60
$283.60 / 10 = $28.36
Yes yes.. I know it's only $0.76 difference and that's not what I'm querying.
I'm just wondering to myself (and aloud now), doesn't it make more sense that if you buy a larger quantity of something that it gets cheaper?
I guess the only benefit is convenience?
Anyway - just say'n.
that's interesting - NSW is more logical for a change. Also a 50% discount on top for a clean record.
1 year: $60
3 years: $138
5 years: $188
10 years: $348
True, I do wonder whether licence costs go up over the years though? So the next time you pay for a 3 year licence you might end up losing, while now you sort of lock in the price. Still though it is typical that large quantities are cheaper.
Was thinking along the same lines as well.
I tried to see if there was a camelcamelcamel for vicroads but alas..
Victorian Road Rule 303 says you must not ride an animal alongside more than one other rider. So camelcamel is fine but camelcamelcamel is against the law.
Yes prices do go up each year.
accounts for inflation
This post literally reminded me to pay my rego that's due tomorrow, thank you
This is equivalent to an upward sloping yield curve for interest rates. Vic Roads expect future licence costs to increase more than the interest they earn from the lump sum for a 10 year licence. E.g. after 3 years, the 3 year licence cost might increase to $90.
Thanks for the enlightening comments all, makes more sense to me now.
Unless my maths is out, it actually costs MORE per year to pay for a 10 year licence than a 3 year one. WTH??
$283.60 for 10 year ($28.36 p/a) vs $82.80 for 3 year ($27.60 p/a)
I'm stating the obvious, but what's with that?
No idea, but perhaps so they can claim that they’re supporting low income people?
future hikes?
Price of the 3 year licence will probably go up 3 times for each 3 year renewal so has probably been factored into the 10 year licence fee??
Oh yeah. Didn't think of that. Makes sense.
Because in three years when you have to renew, it’ll be ~88, and then three years later, ~94, so your annual average is gonna be higher.
jjjar is right but we are bankrupt down here, so it's as much a bait & switch to bring cashflow forward.
License for?
to kill
I'm stating the obvious, but what's with that?
Based on today's prices its 'cheaper' but in 3 years time, the cost would have gone up, and 3 years after that, it would have gone up again and so on.
Also the hassle of doing every 3 years vs once every 10 years.
Bit like other cover etc. Ambulance for example, in VIC its the same cost per year to do 1 year or 5 years. But you protect yourself against price rises.
So, I've done the math on this one just for those that are interested. Paying 10 years equates to a discount of about 2.95%.
Vicroads increases the License fee ~1.88% each year (excluding FY21 during COVID where they held rates flat). If you project todays rates forward another 10 years here the difference:
Scenario #1 - Buy every 3 years:
FY23: $85.50 +
FY26: $90.41 +
FY29: $95.61
= $271.52 for 9 years
(~$30.17 per year averaged)
Scenario #2 - Buy 10 year license:
FY23: $292.80
(~$29.28 per year averaged)
Conclusion: It hardly seems worthwhile pre-paying! You'd need to also consider the opportunity cost of what else you could do with $300 getting better than 2.95% return, and the concept you'd be locked into a VicRoads license for 10 years (e.g. what if you moved interstate or overseas).
but are 175.68 FY23 dollars worth more or less than 90.41 FY26 + 95.61 FY29 dollars due to inflation?
It’s a state that voted Dan in twice.. what do you expect? Common sense to prevail?
Lazy tax