Private car ownership can "represent a cost equal to housing" says research

Motorists underestimate total costs of car ownership, while policymakers and planners underestimate social costs

Table 5: Lifetime earnings in comparison to private car ownership cost, The lifetime cost of driving a car, Ecological Economics, Volume 194, April 2022

The car is one of the most expensive household consumer goods, yet there is a limited understanding of its private (internal) and social (external) cost per vehicle-km, year, or lifetime of driving, says a new research study based in Germany.

This comes as MPs urge Government to urgently explore the options for a distance- and vehicle-type national road-pricing scheme in the UK.

Motorists underestimate total costs of car ownership, while policymakers and planners underestimate social cost  

The research was picked up by Forbes, in which Carlton Reid wrote: "Cars can be convenient, but they are also incredibly costly, both to owners and society in general. New academic research has calculated that the lifetime cost of a small car—such as an Opel Corsa—is about $689,000, of which society pays $275,000. (A Mercedes GLC costs $1+m over an owner's lifetime.)”

The research focused on Germany, but lead author Stefan Gössling told Reid that the guiding principles work for other countries, too. Writing in Ecological Economics, Gössling stated motorists underestimate the total private costs of car ownership, “while policymakers and planners underestimate social costs.”

The paper provides an overview of 23 private and ten social cost items, and assesses these for three popular car models in Germany for the year 2020. 

For the typical German travel distance of 15,000 car kilometers per year, the total lifetime cost of car ownership (50 years) ranges between €599,082 for an Opel Corsa to €956,798 for a Mercedes GLC. 

The share of this cost born by society is 41% (€4674 per year) for the Opel Corsa, and 29% (€5273 per year) for the Mercedes GLC. Findings suggest that for low-income groups, private car ownership can represent a cost equal to housing, consuming a large share of disposable income. 

This creates complexities in perceptions of transport costs, the economic viability of alternative transport modes, or the justification of taxes, says the paper.