Most motorists have no idea how much it costs to keep their car on the road and are likely to underestimate its impact on their pockets by around €1,000 a year, new research suggests.
The Economic and Social Research Institute (ESRI) study, published on Tuesday, highlights how many drivers overlook substantial costs when thinking about the financial implications of owning a car.
A nationally representative sample of more than 800 motorists were asked to give their best estimate of how much they spend each year owning and running their car.
They were then guided through a detailed breakdown of expenses, including fuel or charging, insurance, tax, maintenance, parking, tolls and other costs.
According to the findings, 72 per cent underestimated their annual motoring costs – mostly by a substantial amount.
Excluding the cost of actually buying the car and the subsequent depreciation, the median estimate among drivers was €2,000 per year. However, when the ESRI totted up the actual costs they were closer to €3,000, almost 50 per cent higher than drivers estimated.
The study, funded by the Department of Transport, found fuel was the largest single reported expense, with a median annual cost of €1,560.
The research also found large differences in costs between vehicle types and highlighted the financial advantages of switching to an electric vehicle (EV). Drivers of EVs reported annual running costs close to half those of drivers of petrol or diesel cars.
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The median annual cost for an electric vehicle was €1,560, compared with €2,715 for petrol cars and €3,546 for diesel cars.
However, the study also showed that the degree of cost underestimation was similar across engine types, indicating that misperceptions were not limited to any particular group of motorists. The tendency to underestimate was also widespread across age groups and income levels.
“These findings show that most motorists are not aware of how much their car costs them each year,” said Shane Timmons, senior research officer at the ESRI and co-author of the study.
“When people think about motoring costs, they focus on the most visible expenses, especially fuel, but overlook other costs that add up over time.”
He said that “improving awareness of the full cost of car ownership could help people make more informed transport decisions”.
The ESRI report may not even reflect the new normal for Irish motorists. If someone drives 16,000km annually, and a litre of fuel costs €2, then driving an average car at 12.4km per litre would see a motorist spend €2,580 on fuel alone over the course of 12 months.