Building Wealth · 6-country comparison

The True Cost of Owning a Car: 6-Country Comparison (2026)

Most people judge a car by its sticker price or monthly payment. But the real cost of ownership is two to three times higher once you add the thing nobody writes a cheque for — depreciation — plus insurance, fuel and tax. Here's how the five-year true cost of a typical new car compares across the US, UK, Canada, Australia, Ireland and Switzerland, and the one rule that saves money in every one of them.

5-year true cost of a typical new car

*True 5-yr cost = depreciation + insurance + fuel + maintenance/servicing (excludes finance interest). Insurance and tax vary widely by driver and region.

What drives the differences between countries

• Insurance. Ireland has some of the highest motor-insurance premiums in Europe; the US and Canada vary hugely by state/province (Ontario and BC are notably expensive).
• Motor tax. Ireland and the UK base annual tax on CO2/emissions; Switzerland sets it per canton; the US is generally low.
• Fuel. Fuel is far cheaper in the US than in Europe, narrowing the running-cost gap for petrol cars there.
• EVs. Most upfront EV purchase grants have been wound down (US federal credit ended Sep 2025; UK car grants largely gone; EVs now pay UK road tax from Apr 2025) — EVs still win on fuel and servicing, but the purchase-incentive era is mostly over.
• Imports. In Ireland, importing a used car triggers VRT (and possibly VAT), which can erase the saving.

Why depreciation dominates everywhere

Across all six countries the single largest cost of owning a car is the one that never appears on a bill: depreciation. A new car typically loses 15–25% of its value in year one and roughly half over five years, which in most markets exceeds fuel, insurance and servicing combined.

That is why the buy-used argument holds in every country here regardless of local tax. Letting someone else absorb the first two or three years removes the steepest part of the curve, and it is the one decision that moves the total more than any other.

What actually differs between countries

• Fuel duty. The pump price gap between the US and Europe is mostly tax, which is why fuel economy changes the total cost far more in the UK, Ireland and Switzerland than in the US.
• Acquisition taxes. Ireland's VRT on first registration and Australia's state stamp duty plus Luxury Car Tax add thousands before you drive away. Canada's sales tax varies from 5% in Alberta to nearly 15% in the Atlantic provinces.
• Recurring taxes. The UK charges VED by emissions with an expensive-car supplement; Ireland bands motor tax by CO2; Switzerland sets vehicle tax cantonally on different bases entirely.
• Insurance structure. Public insurers in four Canadian provinces, compulsory CTP bundled with Australian registration, and high UK premiums for younger drivers all move the number.

The substitution effect

The countries with the highest running costs also tend to have the densest public transport, and that is not a coincidence. In Switzerland a half-fare card or GA is a genuine substitute for a second car, which is why Swiss car ownership per household is lower than the income level alone would predict. The honest comparison is not car-versus-car across countries but car-versus-the-local-alternative.

How to use these figures

Treat the country totals as a structure, not a quote. Your own number turns on four things the averages cannot know: how many kilometres you actually drive, whether you buy new or used, your insurance profile, and how long you keep the car. The last one matters most — spreading the depreciation of a used car over eight years produces a completely different answer from changing a new one every three.

For the wider money picture at this stage — home buying, investing and more — see the Building Wealth guide, localised for all six countries.

↪ Part of our 6-country cost comparisons — see how every big financial decision compares across these six markets.

For the full ownership calculation on one car rather than the country comparison, see the true cost of car ownership.

The same first-year-versus-lifetime distinction applies to a pet, where it catches people out harder: the true cost of owning a pet.

Frequently asked questions

What is the biggest cost of owning a car?
Depreciation — not fuel or maintenance — is the largest cost of owning a new car. A typical new car loses around 50% of its value over five years, and 15–25% in the first year alone. It is invisible because you do not write a cheque for it, but it dwarfs every other line item.

Is it cheaper to buy a used car?
Almost always. A 2–3 year-old car has already taken the steepest depreciation hit, so a used buyer gets most of the value for far less money — and usually pays lower insurance and finance costs too. This holds in every country compared here.

Which country has the most expensive car ownership?
Switzerland and Ireland tend to be costliest — Switzerland through high purchase prices and running costs, Ireland through some of the highest motor-insurance premiums in Europe plus CO2-based motor tax. Figures are in local currency and not exchange-rate adjusted.

Sources

• US — Carfax / industry depreciation data; AAA Your Driving Costs
• UK — gov.uk (VED); industry depreciation and running-cost data
• Canada — provincial insurance data; NRCan fuel costs
• Australia — state transport authorities; ABS; motoring bodies
• Ireland — Revenue (motor tax, VRT); motor-insurance market data
• Switzerland — Federal Statistical Office; cantonal motor-tax schedules

Figures as of June 2026 (2024–25 data), in local currency and not exchange-rate adjusted. Compiled from the latest publicly available official sources; general information, not individually verified or personalised advice. See our disclaimer.