· 6 min read
Ask a car owner what their car costs and you will usually hear the fuel bill, maybe the insurance. The biggest costs are the ones that never arrive as a bill: depreciation and the return the money tied up in the car could have earned. Add everything up and a modest car often costs several hundred euros a month.
The six costs of owning a car
- Depreciation. The car loses value every year, fastest in the first few. It is usually the largest single cost.
- Fuel or electricity. Distance × consumption × price.
- Insurance. Fixed, whether you drive or not.
- Maintenance and repairs: tyres, servicing, inspections, the occasional big repair.
- Tax and parking. In a city, a parking space can cost as much as the fuel.
- Opportunity cost. Money spent on the car is money not invested. Even a car bought in cash costs you the return that cash would have earned.
A worked example
A €30,000 car kept for 8 years and sold for 30% of its price, driven 12,000 km a year at 6.5 litres per 100 km and €1.80 a litre. The capital tied up in it averages about €19,500 over the 8 years; at a 5% real return, that money would have earned about €975 a year.
| Cost | Per year |
|---|---|
| Depreciation (€21,000 over 8 years) | €2,625 |
| Fuel | €1,404 |
| Insurance | €900 |
| Maintenance | €700 |
| Tax | €250 |
| Opportunity cost of the capital | €975 |
| Total | €6,854 (≈ €571 a month) |
Pink costs never arrive as a bill: the value the car loses, and the return its money would have earned. Dark blue ones do.
This is before parking, before any loan interest, and with a fairly economical car. Running the same numbers for an electric car changes the mix (higher price, lower energy and maintenance costs) but not the lesson: the cost is mostly invisible.
What going car-free would cost instead
Living without a car is not free either. Say a public transport pass at €60 a month, ten days of car rental a year at €60 a day for holidays and moving furniture, and €50 a month of taxis or ride-hailing. That is €1,920 a year, about €160 a month.
Car-free: transit pass (blue), rentals (purple) and taxis or ride-hailing (orange).
The difference is about €411 a month. Invested every month at a 5% real return, it grows to roughly €167,000 in today's money after 20 years. That is the honest price tag of the car in this example, and the right comparison for "I need a car".
In today's money. About €99,000 is paid in; the rest is growth.
When a car is still the right call
- Public transport where you live is slow or rare, so going car-free costs hours every week.
- You need it for work, for children's logistics, or for mobility reasons.
- You drive a lot, so the fixed costs are spread over many kilometres.
The point is not that nobody should own a car. It is that the decision deserves the full number. The Car vs No Car calculator compares owning with going car-free using your own costs, including what the slower trips cost you per hour. If you are choosing between two cars, electric or petrol, bought, financed or leased, the Car Total Cost of Ownership calculator compares their total cost of ownership side by side.
Run it with your own numbers
The figures above are one illustration. These calculators take yours: free, no sign-up, nothing you type leaves your browser.
Worked examples use round, illustrative numbers in today's money with real (after-inflation) rates. They are not advice for your situation; see the terms and the methodology.