Cars: What do they actually cost?

In this article we explore what the actual monetary cost of a car is to society but also its owner.

  1. Argument

    Cars are considered a cheap modes of transportation because they provide a high level of convenience and independence, allowing users to travel directly to their destinations without the constraints of public transit schedules, which can translate to significant time savings and increased productivity. Additionally, with the availability of affordable used cars, low-interest financing options, and advancements in fuel efficiency and electric vehicle technology, the overall cost of owning and operating a car has become more accessible to a broader range of people.

  2. Rebuttal

    Cars are often presented as a cheap and convenient form of transportation. In this article, a contrarian view is presented which touches on costs borne by society as a whole, but focuses primarily on the costs borne by individual car owners.

    (Gössling et al., 2022)
    is a comprehensive study which determined the lifetime cost of car ownership in Germany, a country with a representive level of car ownership. Germany has fewer cars w.r.t. to its adult population compared to the car-dependent US but more than the Netherlands with its focus on public transportation and cyling (). The data in this study is in part sourced from the German ADAC
    (ADAC, 2024)
    which is similar to AAA in the USA - an organisation which can be considered part of the car lobby in Germany.

    figure 1 - Cars per 1,000 adults in Germany, USA, and the Netherlands by year.Data:
    (KBA, 2024)
    ,
    (Destatis, 2024)
    ,
    (USCB, 2022)
    >
    figure 2 - Yearly social and private costs of a Opel Corsa 1.2 in Germany.Data:
    (Gössling et al., 2022)

    The authors distinguish between private costs (such as purchase, taxes, insurance, and fuel) and societal costs (such as infrastructure and pollution). While societal costs are important, this rebuttal will primarily focus on private costs.


    A common issue is that people often assume their car is a given and, therefore, fail to include its full cost when comparing various travel options. Most individuals focus solely on fuel consumption and travel time when evaluating their transportation choices. However, as illustrated in . This approach often underestimates the true expenses of owning and operating a vehicle. For instance, the operational cost of an Opel Corsa accounts for only about 21% of the total cost per kilometer driven. The remaining 79% are often not considered.


    The full cost of car ownership is frequently overlooked because many people lack access to viable alternatives. Yet, the cost of cars is not only underestimated but also represents a significant financial burden. shows the mean gross yearly income and the average expenditure on new and used cars in Germany. The dashed lines represent the ratio of car costs to the average car purchase price. Both datasets are not adjusted for inflation, making them comparable. If car prices merely followed inflation, the ratio lines would stay constant. The increasing ratios over time indicate that car prices are actually driving inflation, which reduces the purchasing power of car owners who then have less money to spent on themselves, family, the small buisnesses in their neighbourhood, savings for retirement, etc. this has a profound impact on our socities, and social cohesian.


    The rising cost of cars is exacerbated by the increasing size of vehicles. Across the EU, the wheelbase of cars has increased by from to , and the weight has increased by from to

    (ICCT, 2024, pp. 45-61)
    . While this rebuttal will not focus on external costs it is impossible to always clearly distinguish between social and private costs, because heavier vehicles will require more frequent road maintance or more expensive infrastructure to be constructued. The ressource allocation to maintaining and building this infrastructure is something we all as a society have to carry, and while these increases to the dimensions of cars may seem minor, according to the 4th Power Law
    (NZTA, 2009, p. 25)
    , the additional weight results in 42% more damage to infrastructure across the EU car fleet.

    figure 3 - Nominal cost of new and used cars and their prices relative to the average gross wage in Germany.Data:
    (DAT, 2023)
    ,
    (Destatis, 2024b)

  3. Solution

    As is often the case in life, the more choices the better. The solution to this problem is simple: make various modes of transportation accessible to all. This will allow people who want to spend a significant chunk of their income on a car to meet their transportation needs, while also allowing people who cannot afford one or who would like to choose a more active lifestyle, or to spend their income differently, to do so as well. Cities must accommodate pedestrians, cyclists, and public transportation alike to achieve this. The Netherlands is a prime example of this. It facilitates all of these groups, as reflected in the modal share (). The Dutch rely on their cars to get around, but for distances which are cyclable and walkable, they have a much larger share compared to countries like Germany () which cater more to cars. This is undoubtedly down to the infrastructure, which makes it safe and easy to move from one place to another. Thanks to modern city design, this is often faster or just as fast as the route a car would take.

    figure 4 - Mode share distribution across different distance rangesData:
    (BMDV, 2018)
    figure 5 - Mode share distribution across different distance ranges in the Netherlands.Data:
    (CBS, 2023b)

  4. Bibliography