The True Cost of Owning a Car
Ask someone what their car costs and they will quote the fuel. Fuel is rarely the biggest line. For most owners of a car under about eight years old, depreciation is — and it is invisible until the day they sell. This is how to build the real number.
The six costs, in the order they usually matter
| Cost | Typical share | Notes |
|---|---|---|
| Depreciation | 30–50% | Largest cost on newer cars; near zero on old ones |
| Fuel or electricity | 15–30% | The one people track; varies hugely with distance |
| Insurance | 10–20% | Driven by driver age and history more than car value |
| Servicing and repairs | 10–20% | Rises with age; premium brands cost multiples of mainstream |
| Tyres | 5–10% | A consumable on a schedule, not a surprise |
| Tax, tolls, parking, inspections | 5–15% | Highly location-dependent |
Depreciation: the cost nobody budgets for
Depreciation is the difference between what you paid and what you get back, spread over the years you owned the car. A €30,000 car sold four years later for €17,000 cost €3,250 a year in depreciation alone — probably more than its fuel.
This is also why very old cars are cheap to own despite needing more repairs. A €4,000 car cannot lose €3,000 a year. The repair bills are real but the depreciation floor is close.
Worked example: three cars, same owner, 15,000 km a year
The oldest car is the cheapest to own even with triple the repair budget. What it does not provide is predictability: that €1,100 average might be €200 one year and €2,000 the next.
| New compact SUV | 3-year-old estate | 9-year-old hatchback | |
|---|---|---|---|
| Purchase | €34,000 | €19,000 | €5,500 |
| Depreciation per year | €3,600 | €2,300 | €450 |
| Fuel per year | €1,500 | €1,650 | €1,450 |
| Insurance | €650 | €600 | €480 |
| Servicing and repairs | €350 | €600 | €1,100 |
| Tyres (annualised) | €250 | €250 | €200 |
| Tax and fees | €200 | €220 | €180 |
| Total per year | €6,550 | €5,620 | €3,860 |
Where premium brands cost more than the badge
A used premium car is cheap to buy and expensive to keep, because its parts, labour rates and consumables were priced for its original owner, not its third one. Brake discs, air suspension components, adaptive dampers, large-diameter tyres and complex electronics all carry premium prices for the life of the car.
This is not an argument against buying one. It is an argument for budgeting the running costs of the car when it was new, not the price you paid.
Reducing the bill without changing car
- Shop insurance every renewal — loyalty is consistently penalised
- Buy quality tyres and keep them correctly inflated; underinflation costs fuel and tyre life
- Use an independent specialist once the warranty ends
- Service on time — deferred maintenance is borrowed at a very high rate
- Keep the service records; they pay you back at resale