The true cost of driving

Hi, this is Simon. I’m a software engineer at Datawrapper. This week, I explain why I don’t own a car and why you probably shouldn’t own one either.

Driving is more expensive than you probably think. Most people may have a pretty clear idea of how much they spend on gas, but that’s just a fraction of the total cost. If you own a car, you also have to pay for maintenance, repairs, insurance, and tax. And there’s a big factor that’s often overlooked: Every day you use it, your car loses value.

This chart shows the monthly costs for three very typical German cars: a small car (Opel Corsa), an SUV (Mercedes GLC), and a Volkswagen Golf, which has been the best-selling car in Germany for many years. If you, like thousands of Germans, want to drive your own VW Golf, it will cost you about 630 euros a month. For reference, in 2021, the average gross monthly income in Germany was 2,160 euros. A Mercedes GLC will even cost you more than 1,000 euros a month, around half of the average gross income.

The (true) true cost

So we’ve established that driving costs you more than you probably thought. But that’s not the full story yet.

When you buy a car, you assume that the government provides the necessary infrastructure for driving it — roads, bridges, parking, etc. In addition to that, there’s a substantial negative impact that cars have on society and the environment: climate change, air pollution, noise, accidents, and congested streets.

When economists put a price tag on those factors, they call them social costs. In a recent study, researchers Stefan Gössling, Jessica Kees, and Todd Litman calculated the private and social costs of driving for the three car models mentioned above. They found that the social cost is about 30-40% higher than what car owners are currently paying. Those costs are externalized: They are not paid by individual car owners but by society as whole. That means, even if you don’t drive, your taxes still pay for the social cost imposed by your neighbor’s car.

“But I already pay so much in taxes!”

Every person owning a car, ever.

Yes, your government taxes you for owning a car, for buying gas, and maybe also for parking, but that covers only a part of the actual cost your car puts on society. In their study, Gössling et al. point out that, if we wanted to fully internalize the social costs, driving a car would be significantly more expensive than it currently is.

The researchers also argue that policies that incentivize individual car ownership are inherently unfair and inefficient. Such policies force people to buy cars they can’t afford while also imposing large external costs on everyone, even those who walk, bike, or use public transport.

The solution

What can we do about that? I think the answer is obvious: fewer cars. In order to achieve that, we need to prioritize other modes of transportation wherever possible. Of course, relying on walking, biking, and public transport is not always feasible, particularly for people in rural areas. But in industrialized countries, where car ownership is high, most people actually live in cities. If we made it easier for those in urban areas to go about their lives without driving, we could already reduce the number of cars significantly. Also, it is in cities where the negative effects of traffic have the greatest impact.

You see that buses and trains are much more efficient than cars because they use less space and energy per passenger. Electric cars have lower environmental costs than cars with traditional internal combustion engines, but they cause the same accidents and traffic jams.

Compared to any form of motorized traffic, active transportation modes like cycling and walking have minimal social costs that are completely offset by their large public health benefits. That's because walking and biking keep you fit! 💪

So in order to make transport systems healthier, fairer, and more efficient, policy makers should favor other modes of transport over individual car ownership wherever possible. Many major European cities have taken bold steps towards doing that quite successfully, including Copenhagen, Paris, Madrid, Barcelona, Ghent, Helsinki, and Oslo. It’s no surprise that Copenhagen, a city that has prioritized walking and cycling for many years, is often considered to be the world’s most livable city.

About the data

The charts in this article use data from three different sources:

• European Commission, Directorate-General for Mobility and Transport, Essen, H., Fiorello, D., El Beyrouty, K. (2020). Handbook on the external costs of transport: version 2019 – 1.1, Publications Office.
• Stefan Gössling, Andy Choi, Kaely Dekker, Daniel Metzler. The Social Cost of Automobility, Cycling and Walking in the European Union, Ecological Economics, Volume 158, 2019.
• Stefan Gössling, Jessica Kees, Todd Litman. The lifetime cost of driving a car, Ecological Economics, Volume 194, 2022.

Each of the studies has a different focus and uses different methodologies, so the data may not be directly comparable. I decided to still show them side-by-side because they all make the same point: Driving may be convenient it is also extremely expensive — for car owners, but also for everybody else.

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That’s it from me for this week. As always, do let me know if you have feedback, suggestions, or questions. I am looking forward to hearing from you at simon@datawrapper.de, Mastodon, or Twitter. We’ll see you next week.