Underestimation of the costs of owning and running a car
Non-Technical Summary
Cars are expensive to own and use, but once people get one, they rarely give it up or reduce how much they drive, even when costs rise or incomes fall. This is a problem because high levels of car use and ownership have negative consequences for individuals, communities and the environment. One possible reason for people continuing to own and use cars at high levels is that many underestimate how much their car actually costs to own and run. The aim of this research was to investigate how much it costs to own and use a car in Ireland, and whether motorists’ beliefs about these costs are accurate.
We surveyed over 800 motorists. First, we asked them how much they think it cost them to own and use their car for the past year, giving a measure of their general intuition of costs. Next, we took them through a detailed list of specific cost categories (e.g., fuel, insurance, parking). For each one, we asked if they paid it and how much. We designed the questions to help people recall as accurately as possible, and then added the costs together to estimate each person’s actual annual motoring costs.
On average, motorists thought they spent €2000 on their car over the past year (not including purchase price or depreciation). This differed by engine type, ranging from diesel drivers who estimated the most (€2500) to EV drivers who estimated the least (€800).
Their actual reported costs were significantly higher. Across the sample, they averaged just over €2900. Again, diesel drivers had the highest costs (~€3500) and EV drivers had the lowest (~€1,500). More than 70% of motorists underestimated how much they spent.
We also looked at what predicts motorist’s intuitive and actual costs, and how accurate they are. Actual costs varied in expected ways: EV drivers spent less, older people spent less and those who drove more spent more. However, very few factors predicted intuitive cost estimates or accuracy. The only notable exception was that respondents with children were slightly less likely to underestimate, possibly because managing a household budget increases cost awareness. Even so, most parents still underestimated.
These findings suggest that most motorists underestimate the true costs of driving, which helps explain why car ownership and use remain persistent and why price-only policies (like fuel taxes) may not shift behaviour as much as expected. Making costs more visible and easier to add up could help. Policies that increase per‑trip costs by changing incentives and by making costs clearer (e.g., congestion pricing, workplace parking levies, distance‑based insurance) may have stronger effects. Importantly, choices are constrained for many people by public transport availability, so more accurate cost perceptions alone are unlikely to change behaviour.