car running cost

What does it cost to run a car?

3 min to readLeasing
The cost of running a car is not something you can answer easily. And, this is just passenger cars, commercial vehicle costs are a completely different story. Let's look at the monthly running costs in detail.
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What does it cost to run a car? Well, it's not something with an easy answer. And, this is just passenger cars, commercial vehicle costs are a completely different story.

In Europe, the costs to run a car can range from €440 a month in Greece to €830 a month in Norway. In x country it is €x. Read more about how European countries compare in the 2019 Car Cost Index. There are a few common car cost factors. These are: depreciation, taxation, fuel, insurance and repairs and maintenance. So let’s dive deeper into each cost component



When looking at car running costs depreciation is quite often a forgotten factor when you own a car for personal use. But, for business cars you should always take it into account as it will represent your largest monthly car cost. Newer cars lose their value quickly and depreciation can represent anywhere between 32% to more than 50% of your monthly car costs.


In the Netherlands road tax is applicable for all registered vehicles. The monthly cost depends on a car’s fuel type, gross vehicle weight and the location it was registered.

A luxury tax is applicable for passenger cars and motor cycles. Like road tax, this amount also depends on a car’s fuel type and CO2 emissions. On average monthly tax costs for an electric vehicle are €127, for a diesel €211 and for petrol €146.

Australia wide, average registration costs are around $130 a month.

And, if you drive a car worth over a certain amount you will have to pay Luxury Car Tax (LCT), which is around 33%. You can view LCT threshold rates here. You also won’t be able to claim any GST credit for the luxury tax you pay, no matter how much you use your car for your business.



Your car’s fuel (petrol, diesel or electricity) accounts for around 14% of your monthly car costs. Here, choosing the right car for your needs is important. What you spend on fuel will vary per month it really depends on, how many kilometres you drive, your car's load, your driving behaviour, the area you live (road conditions) and the price of fuel in your area.

In some cases it might be more economical to drive electric over petrol or diesel and a relaxed driving style will always help save on fuel costs.


Insurance costs like third party insurance are incredibly important, as they are mandatory, and represent around 12% of your monthly costs. Your insurance will also cover any damage related repairs.


Repairs and maintenance

General repairs, maintenance and tyre costs represent around 6-9% of your total monthly costs If your car is under warranty, normally 3 years, repairs will be covered, but routine maintenance, inspections and services (tyre and oil changes) are not included.

Vehicle choice can also play a part in lowering your maintenance and service costs. Electric vehicles have fewer moving parts compared to internal combustion engine (ICE) vehicles so less maintenance is required.

Other costs you might expect

If you’re leasing you pay a small monthly fee for administration and customer support. If you have purchased your car with a loan you will need to pay interest each month. These two combined are around 5% of your monthly car costs

Of course, costs aren’t everything! Personal taste, driving experience, making sustainable choices and the way you initially fund your car are also important.

Can’t decide if you should lease or buy your next vehicle? Compare the two options here: (link to lease vs buy article if you have it)

Published at August 12, 2020
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August 12, 2020
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