Driving Costs Escalate With Stockholm's Congestion Tax

Translated from the original Swedish article by Carl Morgan.

Maintaining a car in Stockholm may be 7,000 SEK ($878 US) more next year

Published December 27, 2005, 5:30 AM

It will be more expensive next year to own a car and live in Stockholm. In 2006 it will cost around 7000 SEK ($878 US) more this year for Stockholm residents who commute by car to work between the city and its suburbs. This is according to a study by the Institute for Private Economics, a part of the Swedish bank Föreningsparbanken, and commissioned by Taxi Stockholm.

The increase is primarily due to the new congestion tax, but increases in fuel costs are also making it more expensive to be a Stockholm resident with a car. Current gas prices are around 11.31 SEK per liter ($1.42/liter or $3.79/gallon), but gas prices have been much higher during the past year. "It's already a poor deal to commute between the inner city and the suburbs in your own car and it is getting all the more expensive," said Ylva Yngveson, Director of the Institute for Private Economics.

Now people are having to ask themselves if they really need a car. For a family with small children, 7000 SEK is a lot of money. According to the Institute's estimates, it costs 65,340 SEK ($8192 US) per year to own and maintain a Volkswagen Golf 1.6 FSI in Stockholm. This estimate includes driving approximately 15000 km (9321 miles) per year and a congestion tax of 15 SEK ($1.88 US) two times per day. Purchase price: 160,000 SEK ($20,056 US). Total monthly cost: 5530 SEK ($693US).

In another example, an owner of a Volvo V70 2.4 140 HK with a purchase price of 250,000 SEK ($31,340 US) will pay 85,410 SEK ($10,708) per year. Per month it will cost the owner 7230 SEK ($906) to drive the Volvo, congestion tax and all. Göran Jaxéus, Managing Director at Taxi Stockholm, naturally hopes that the increased cost will cause Stockholm commuters to consider using taxis and other collective transportation options.

"Taxis are stereotyped as being somewhat of a luxury, but with the increase in fees I think that this label will eventually fade. Many people have a second car, and when they compare the cost to own and maintain it, a taxi is a clear alternative."

The study also compares the cost of those who trade-in their Golf-style car for a transit pass and 24 taxi rides per month (10km per trip). If the former auto owner decides to rent a car for a weekend, the cost savings still allow 16 taxi trips in addition to the transit pass.

The owner of the Volvo, or similar style car, has a budget for a transit pass and 32 taxi trips per month. If he or she decides to rent a car with unlimited miles for a weekend, there is still enough left for 24 taxi trips. Again, this is all based on paying the congestion tax with other auto-related costs.

However, Ylva Yngveson doesn't believe that Stockholm residents are going to lose the car at first, despite the cost increases. "Another study we did several years ago showed that people would more likely change jobs, work more or move in order to maintain a budget for their car. People love their cars."

Leif Aspelin

08-13 51 41, [email protected]

Thanks to Carl Morgan