Cost of car ownership in Europe

Anatom

I'll just leave this here. Its a study by Leaseplan which they published yesterday. Effectively, it says that car ownership costs much more in the Scandinavian countries than it does in the former Eastern bloc. Hardly a surprise there, but I was surprised by the very large differences in the price of fuel. It just shows how much tax we're paying, albeit not as much as our Norwegian friends are paying...

Car ownership costs in Norway discovered to be almost double that in Hungary

LeasePlan has uncovered widely divergent total costs of driving a car in Europe - linked primarily to depreciation and taxation

Norwegian car owners pay more than other Europeans to drive a car.
At €708 per month, Norwegians pay almost twice as much for their petrol car as Hungarian drivers (€364).

The Netherlands is the most expensive country for diesel car drivers. On average, the Dutch spend €695 per month on their diesel vehicle. Here again, Hungary is the cheapest country (€369).

These are just a few of the findings of the LeasePlan CarCost Index 2016, a recent study of the costs of car ownership and usage of petrol and diesel cars in 24 European countries.

This study maps out all the cost elements of an automobile in great detail at an international level, drawing upon LeasePlan’s knowledge and experience from its own multi-branded fleet using index methodology.


Total car cost per month


The LeasePlan CarCost Index compares the most important cost elements, like purchase price, deprecation costs, repairs and maintenance, insurance, taxes and fuel expenses, including winter tyres if required by law. The analysis is based on the first three years of operational costs and an annual mileage of 20,000 km.

European divide: regional differences
Within Europe, the average cost of driving a small to medium car can vary as much as €344 per month. The top three most expensive countries for driving a petrol car are Norway (€708), Italy (€678) and Denmark (€673).
The ranking of most expensive diesel car countries is led by the Netherlands (€695), followed by Finland (€684) and Norway (€681). It’s noteworthy that in East European countries like Hungary, the Czech Republic and Romania, the costs of driving a petrol and diesel car are significantly lower, starting at €369 per month.

Car owners have little influence on the costs
Depreciation costs are the main contributor to the total cost of car ownership. Within Europe, the average depreciation costs for small to medium cars represent 37% of the total cost. In Hungary, the low overall cost is due primarily to the lower than average purchase price which positively affects the deprecation costs. Road tax and VAT account for 20%, while fuel contributes 16% to the total cost of a car per month. This means that car owners have relatively little influence on the costs.

In six of the 24 European countries studied, driving a diesel car is more expensive than driving a petrol car. Although the pump price for diesel is cheaper than the price for petrol, other factors such as more expensive taxes, insurance, or maintenance costs explain the higher total cost for diesel vehicles in some countries.

Environmental taxation plays a role
The study also shows that there is a strong correlation between the high overall cost and high road tax/VAT (value added tax) across both vehicle types for the most expensive countries (Italy, Nordic countries and the Netherlands) and vice versa for the most inexpensive countries, which are taxed the least (Hungary, Czech Republic, Romania).

This can be seen as a reflection of the relatively strong ‘green’ movements in the more expensive countries , which translates into environmental regulation via taxation.

For example, in the Netherlands VAT and road tax add up to 31% of the total costs of driving a diesel car. When it comes to petrol vehicles, Norway is number one in taxes, which can add up to 29% of the total cost.
Tex Gunning, chief executive officer, LeasePlan (pictured above) said: “Depreciation and the lack of control over vehicle costs are two facts that raise questions about the benefits of car ownership versus leasing or other mobility alternatives for people today. Our presence throughout the automotive value chain – combined with our global scale – allows us to manage our lease vehicles very cost competitively and indeed at a lower naked cost for our customers than purchasing their own cars or fleets.

Relative cost of driving a car


“Due to the complexity of car cost elements, we recommend that potential car owners or fleet managers consider the bigger picture when deciding to buy a new or used car – or even better to consider leasing or forward-looking mobility solutions like car sharing, which can be lighter on the wallet as well as the environment.”

Repair and maintenance most expensive in Sweden
The costs for maintenance and roadside assistance are the highest in Sweden at 15% (€85) of total cost. On the contrary, Turkey has the lowest repair and maintenance costs at €28 per month. This is unsurprising, since labour costs represent a significant share of the repair and maintenance expenditure and Sweden’s hourly labour rate can be three times as high as in Turkey.

Insurance: prioritising safety above speed pays off
Switzerland has the highest insurance costs in Europe. These costs add up to €117 per month for both petrol and diesel. The Czech Republic is the cheapest country for petrol vehicle insurance at €37. In Sweden – generally one of the more expensive countries – prioritisation of safety above speed pays off.

The LeasePlan CarCost Index shows that Sweden is the most inexpensive European country for diesel vehicle insurance at €39 per month.

Average petrol costs: €100 per month
Based on an annual mileage of 20,000 kilometres, the average fuel expenditure in Europe for petrol is €100 per month, whereas €67 per month is spent on diesel. Italy takes the lead in fuel costs at € 136 per month for petrol vehicles, which is caused by the high fuel tax. At just €54 per month, the Russians profit from the cheapest fuel costs for petrol due to the country’s large oil reserves. The cheapest country for diesel is Poland at €49 per month.

The CarCost Index 2016 analyses the overall costs of owning and operating vehicles in 24 countries: Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

bear1

It doesn't take into account earnings though so it's all a bit relative.
Here is my example owning a car while working in warsaw.
Full insurance for the year was approx 600e
Motor tax is on fuel and a litre of diesel is about 1.20e
Maintenance: due to the winters here you'd need 2 sets of tyres for the summer and winter so that can be costly but isn't a yearly thing.
All in all you'd want to budget approx 1500e for the year for insurance and other costs apart from fuel.

biko

If we compare Oslo and Budapest general living costs

Consumer Prices in Budapest are 59.91% lower than in Oslo
Consumer Prices Including Rent in Budapest are 62.26% lower than in Oslo
Rent Prices in Budapest are 68.23% lower than in Oslo
Restaurant Prices in Budapest are 73.04% lower than in Oslo
Groceries Prices in Budapest are 65.75% lower than in Oslo
Local Purchasing Power in Budapest is 48.21% lower than in Oslo

Fuel costs are 31% lower than in Oslo

Hence car ownership is also likely to be a lot lower

Del2005

It would of been better if compared to the average wage. No point in saying it costs 400 in one country and 1000 in another if the monthly wage in the 1st is 500 and 3k in the 2nd.

biko

It would have been better yeah. Big Mac index.

CiniO

My estimate for usage of typical car for typical Joe in Ireland, vs typical car for typical Kowalski in Poland would be something like that.

Ownership over 4 years, with 25k km a year.

Ireland:
Purchase: 4 year old Corolla diesel for €11,000.
After 4 years car (8 years old) sales for €5000
That means depreciation: €6000
Annual tax over 4 years: €1120
Insurance over 4 years: €2800 (comprehensive as most people choose that)
Tyres over 4 years and 100k km (4 sets): €1200
Maintenance over 4 years: €3200
Diesel over 4 years: €7500
Total cost: €21,820

Poland:
Purchase: 10 year old Golf for €4500
After 4 years car (14 years old) sales for €2500
That means depreciation: €2000
Annual tax over 4 years: €0
Insurance over 4 years: €500 (Third party only as that's most popular there)
Tyres over 4 years and 100k km (2 sets one summer one winter): €600
Maintenance over 4 years: €1600
LPG Conversion: €500
LPG over 4 years: €4000
Total cost: €9200

So comparing total cost over 4 years in Ireland €21,820, in Poland €9200.
Cost per year then - Ireland: €5455, Poland: €2300.
Cost per 100km - Ireland: €21.82, Poland: €9.20.

Cars are obviously not equivalent, but that's just the average car people would choose for reasonable cost motoring.

Cost in Ireland is nearly 2.4 times of that from Poland, but salaries in Ireland are closer to 3 times that in Poland or even more, so effectively it costs less in Ireland to drive.

unkel

There seem to be only a few countries where diesel cars (causing cancer) are taxed significantly more than petrols, like NL / PL / FI

All the other countries should be ashamed of themselves.

Peregrinus

CiniO wrote: »

My estimate for usage of typical car for typical Joe in Ireland, vs typical car for typical Kowalski in Poland would be something like that . . . .

Cost in Ireland is nearly 2.4 times of that from Poland, but salaries in Ireland are closer to 3 times that in Poland or even more, so effectively it costs less in Ireland to drive.

Plus, on those figures you're getting a better car in Ireland (as you concede) and better insurance cover.

CiniO

unkel wrote: »

There seem to be only a few countries where diesel cars (causing cancer) are taxed significantly more than petrols, like NL / PL / FI

All the other countries should be ashamed of themselves.

I'm not sure where they're getting this data, but Poland doesn't have more expensive diesel than petrol.
Diesel costs about the same as petrol during winter, and it's cheaper during summer.
There's also isn't any extra tax on diesel cars...
And considering most cars are much older there than in Ireland, environment impact is even worse.

Germany have a good system, where all bigger cities don't allow older diesels cars (before 2006 afair).

Del2005

CiniO wrote: »

My estimate for usage of typical car for typical Joe in Ireland, vs typical car for typical Kowalski in Poland would be something like that.

Ownership over 4 years, with 25k km a year.

Ireland:
Purchase: 4 year old Corolla diesel for €11,000.
After 4 years car (8 years old) sales for €5000
That means depreciation: €6000
Annual tax over 4 years: €1120
Insurance over 4 years: €2800 (comprehensive as most people choose that)
Tyres over 4 years and 100k km (4 sets): €1200
Maintenance over 4 years: €3200
Diesel over 4 years: €7500
Total cost: €21,820

Poland:
Purchase: 10 year old Golf for €4500
After 4 years car (14 years old) sales for €2500
That means depreciation: €2000
Annual tax over 4 years: €0
Insurance over 4 years: €500 (Third party only as that's most popular there)
Tyres over 4 years and 100k km (2 sets one summer one winter): €600
Maintenance over 4 years: €1600
LPG Conversion: €500
LPG over 4 years: €4000
Total cost: €9200

So comparing total cost over 4 years in Ireland €21,820, in Poland €9200.
Cost per year then - Ireland: €5455, Poland: €2300.
Cost per 100km - Ireland: €21.82, Poland: €9.20.

Cars are obviously not equivalent, but that's just the average car people would choose for reasonable cost motoring.

Cost in Ireland is nearly 2.4 times of that from Poland, but salaries in Ireland are closer to 3 times that in Poland or even more, so effectively it costs less in Ireland to drive.

Do Poles have some special tyres that manage 50k each? Swapping from summer to winter doesn't reduce the wear when they are on the car.

Fred Swanson

This post has been deleted.

Peregrinus

Fred Swanson wrote: »

This post has been deleted.

Cinio's figures for Ireland included comprehensive insurance, while those for Poland included only third-party. The Irish figures therefore included the cost of insurance against a wider range of risks than the Polish; the cover was better in that sense.

CiniO

Del2005 wrote: »

Do Poles have some special tyres that manage 50k each? Swapping from summer to winter doesn't reduce the wear when they are on the car.

No, tyres are the same.
Roads are different - other type of surface.

Most Irish roads are made with different technology to roads on the Continent, having way more sharp chippings on top of surface layer, causing excessive tyre wear, but providing extra grip, especially on wet surface. Probably makes sense considering the weather here.

Here in Mayo my front tyres won't last me more than 10 - 12k km.
Driving around Dublin on more flat and straight roads probably around 20k km.
On the Contienent (including Poland) with the same driving style, front tyres would easily last me 50k km or more.

CiniO

Fred Swanson wrote: »

This post has been deleted.

Third party is probably similar (even though I think Irish insurers provide higher maximum payouts), but own car damage is the big difference.
In Ireland, difference between comprehensive and third party policy is negligable. F.e. my insurer asks me for 600 for comprehensive, or 550 third party, fire and theft, and no option for third party only.

In Poland for similar car I have here, I would pay about 150 for third party, or 550 for comprehensive.

Voodoomelon

A bizarre comparison, choosing two different brands, model and year of car, lpg one and dont do the other?

Donedeal is littered with 2007 Golfs for €3000, why choose a 4 year old Corolla?

CiniO

Voodoomelon wrote: »

A bizarre comparison, choosing two different brands, model and year of car, lpg one and dont do the other?

Donedeal is littered with 2007 Golfs for €3000, why choose a 4 year old Corolla?

Becasue I chose average motoring examples.

Most Irish drivers don't drive 10 to 14 years old cars on LPG, while most Polish driver do.
The same most Polish people can't afford to buy 4 year old car, while most Irish can.

I can make you comparison on the same kind of car like to like, but there's hardly any point, as it would be completely different kind of people driving them. Someone with very decent executive job position in Poland might be driving the same kind of car as someone on minimum wage selling burgers in Ireland.

Del2005

Voodoomelon wrote: »

A bizarre comparison, choosing two different brands, model and year of car, lpg one and dont do the other?

Donedeal is littered with 2007 Golfs for €3000, why choose a 4 year old Corolla?

It's a better comparison to the OP. Average running costs vs average wages gives a better picture than top level prices. The amount you have left from your wages after expenses is what most people look at.

H3llR4iser

The study also shows that there is a strong correlation between the high overall cost and high road tax/VAT (value added tax) across both vehicle types for the most expensive countries (Italy, Nordic countries and the Netherlands) and vice versa for the most inexpensive countries, which are taxed the least (Hungary, Czech Republic, Romania).

There is an error in this statement - Italy doesn't have very high motor tax rates, and they are only marginally connected to environmental and/or emissions concerns.

My own car, an Alfa 159 1.9 JTS (petrol), pays 673 Euro / year here, and 361 Euro / Year in Italy; Tax is calculated based on engine power with only a small adjustment regarding the vehicle's emissions profile - for example, an hypothetical "Euro 0" (built before 1992) car with the same 160CV / 118KW would pay 419 Euro / Year, so just a 58 Euro adjustment with no difference between diesel and petrol engines. That's one of the reasons there still are 25 years old FIAT Panda and Uno driving around Italy...

What kills the cost of motoring down there are the insane fuel prices and, most importantly, the insurance being bonkers since the early '90s (although Ireland is catching up quickly).

But as many said everything is relative, considering the average income and use of the car - for example, my car stands still just outside my door 5 days out of 7; Between insurance and tax, just keeping it there already costs me around 1700 Euro/year, before it moved an inch; With such low usage, fuel costs are obviously very low - if I was in Italy in the same situation, I'd be spending less than here, even with the higher petrol price. Then again, my salary would be around 75-80% lower than it is, so not happy times.

So TL;DR - The bigger problem here are the "dead weight" costs to keep the car in the first place, more than anything else, which also contribute to early obsolescence - between insurance hikes and tax, nobody wants a 2007 2.5L and it most likely ends in the scrapyard creating an environmental problem way bigger than a few hundred thousands litres of burnt petrol would...