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How much does it cost to own a new car in Finland?

Ever wonder how much Finns pay each year just to use a new car? Yle and Finland's auto club crunched the numbers to find out – and it’s a lot.

auton ratti ja suojatie jolla jalankulkijoita
Image: Esko Jämsä / AOP

The Finnish Broadcasting Company Yle recently asked the Automobile and Touring Club of Finland (ATCF) to ascertain how much it costs in Finland to own and operate a new car.

The auto club analysed costs for the annual use and upkeep of a car that represents three different price levels, comparing petrol and diesel-powered cars with new hybrid alternatives. Under the assumption that the car is driven 18,000 kilometres a year, comparative numbers for five years of consecutive use were also examined.

Calculations include the basic vehicle tax, an extra tax applied to cars that don't run on petrol, depreciation, fuel costs, insurance, parking fees and maintenance expenses.

The Automobile and Touring Club's communication director Jukka Tolvanen says a surprising amount of car-owners associate only fuel and maintenance costs with owning a car.

"It's certainly not cheap to own a vehicle. The largest expense is depreciation, as the car loses value. People are just fooling themselves if they are only thinking about the operating expenses," he says.

Tolvanen says there are many factors that influence depreciation: the car's make and model, how many kilometres it has been driven and how well the car has been taken care of.

"Smoking your first cigarette inside a new car is like throwing banknotes out the window," he says.

Sticker price less than 20,000 euros

The example cars in this first category are two different models of a Seat Ibiza, one that runs on petrol (sticker price 17,800 euros) and the other on diesel (19,900).

Before depreciation, the ATCF found that owning and operating this car cost between 2,700 and 3,100 euros a year, which translates to between 233 and 260 euros a month.

If the car's loss of value is taken into account, the yearly expense soars to about 5,000 euros. In order to calculate depreciation, the ATCF used a formula whereby the car's worth falls 18 percent in the first year, and 14 percent every year after that. Also, for all the calculations featured here, the total expenses don't include any loan expenses, which should naturally be added to the total if the car was bought with borrowed money.

Expenses over five years for this least expensive class of car work out to about 25,000 euros, with fuel costs accounting for over 1,000 euros annually.

"Fuel expenses are highly dependent on what kind of car you drive and how you drive it. If you drive a lot, a diesel car is often your most economical choice," Tolvanen says.

graphic
Image: Yle Uutisgrafiikka

Between 20,000 and 30,000 euros

Example cars in this second price group are a petrol-fuelled Skoda Octavia (sticker price 28,000), a Skoda Octavia diesel (30,000) and a hybrid Volkswagen Golf GTE (42,000).

In this class, the annual cost of keeping these cars, including depreciation, jumps to between 6,000 and 7,000 euros.

Tolvanen says that the future in this middle class of cars is likely in the hybrid car market, as more motorists could drive short distances on electricity, and longer distances with petrol. Price is still a prohibitive factor, however.

"A hybrid car is more expensive up front, and it'll lose its value faster than traditional cars because it's new technology and newer and cheaper electric-powered models will soon arrive on the market," he says.

Between 40,000 and 50,000 euros

The example cars the auto club used in this part of the testing were a petrol VW Passat (sticker price 40,000), its diesel equivalent (43,000) and a VW GTE hybrid (49,000).

Annual total costs of owning and operating a vehicle in this price class climb to between 2,700 and 3,300 euros per year, without depreciation. With depreciation, however, these costs jump to an average of 7,850 euros a year.

In this price range, fuel costs for the year rise to over 1,600 euros for this petrol model, 1,300 for the diesel version and 929 euros for the hybrid model, but once again, the faster depreciation rate for the hybrid still make it the most expensive option overall.

So which is the best buy, Jukka Tolvanen, all things considered?

"Well, if you are only thinking of the price, a used car that hasn't been used much is good. But of course you also have to consider things like comfort, safety and the environmental impact of the vehicle," he says.

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