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Global Fleet Expert
Director of International Consultancy Services
Posted on: 07 April 2016

Total Cost of Ownership – Which European country is the most expensive?

Total Cost of Ownership

If you suspect that car costs are higher in certain European countries than in others, you’re right. But, in what measure do they differ? And how do cost variations in different countries weigh up to each other? Now, a study by LeasePlan of car costs in 11 European countries reveals that the cost of driving a car can vary as much as € 350 from one country to the next, with the Netherlands topping the list as most expensive country.

For the first time ever, all cost elements of owning and driving a car in Europe have been brought together in the LeasePlan CarCost Index . Comprising a representative selection of 11 European countries, the CarCost Index lists overall fleet ownership and operating costs in these countries and points the way in making informed decisions about buying or leasing cars.

Adding up the costs

For this first of CarCost Index, LeasePlan experts identified the total cost elements of a C-segment car (20,000 km per year, on the basis of three years), including purchase price, depreciation, insurance, repair costs and maintenance, taxes and fuel costs. One of the most significant findings was that 70% of car costs are fixed leaving the remaining 30% that are influenced by the driver.

The index has proven that it pays to look beyond the ‘traditional’ cost items and to include all cost factors when making leasing (or purchasing) decisions based on optimising your fleet TCO

Fuel costs and high-tax countries

The variations in fuel costs reflect the tax regimes in the various countries. High taxes on fuel, means Italy has the highest fuel costs, with the UK and Spain a close second and third. As for diesel: the Swiss government taxes this fuel type heavily because of its higher levels of emissions. Diesel is therefore the most expensive (of all indexed countries) in Switzerland. By contrast, in the Netherlands, diesel is considerably cheaper than petrol.

The below graph shows an index of fuel costs across the countries included in the study.

 

The Netherlands – most expensive country

Looking at the Total Cost of Ownership, the Netherlands is the most expensive country in Europe for owning and driving a car. On average, and depending on their fuel choice, Dutch motorists spend between € 600 and € 800 on their cars every month. Compare this to Germany – where average monthly costs are between € 420 and € 450 – and it is clear that ‘one’ Europe does not equal one cost level. Making things even more complicated is the fact that cost elements vary per country. Maintenance costs are cheapest in the UK and highest in Sweden. But, then again the UK is in the Top-3 of highest fuel prices, whereas Sweden has the lowest insurance costs.

The below graph shows an index of car list prices across the countries included in the study.

 

 

 LeasePlan CarCost Index highlights

• Germany and the Czech Republic are the cheapest for motorists. Total Cost of Ownership is the highest in the Netherlands.
• On average, fuel costs are highest in Italy.
• 70% of costs are fixed: such as maintenance costs, depreciation and taxes. Of these, depreciation is the largest representing 36% of fixed costs.

So how can this help you drive down your TCO?

The CarCost Index provides you with a unique tool to compare not only purchase price, fuel cost and tax rates, but to get full insight into ALL your motoring costs in Europe. The index has proven that it pays to look beyond the ‘traditional’ cost items and to include all cost factors when making leasing (or purchasing) decisions based on optimising your fleet TCO.

For more information on LeasePlan’s CarCost Index please contact us using the Contact Us.

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About the author

Global Fleet Expert

Saskia Harreman, with a long history in the automotive industry joined LeasePlan International in 2000 in the field of account management. She then moved into the Global Coordination team and was involved in business process management, legal and ICT structure for LeasePlan International. Other responsibilities included product development and internal training.

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