Study: Lifetime Cost Of Small Car $689,000; Society Subsidizes 40 Percent of This

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. A new article, "The Lifetime Cost of Driving a Car" published in Ecological Economics, 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.



The study's results confirm that motorists underestimate the full private costs of car ownership, while policymakers and planners underestimate the social costs. 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, and the justification of taxes.



Carlton Reid's summary of this study in Forbes Magazine converts the cost values to American dollars: Lifetime Cost Of Small Car $689,000; Society Subsidizes This Ownership With $275,000.