Owning a Car in Europe Now Costs 27 Percent More Than Five Years Ago
A new analysis from Arval Mobility Observatory, part of the BNP Paribas Group, paints a sobering picture for European drivers. Between 2020 and 2025, the total cost of ownership (TCO) for cars — which includes purchase price, fuel or electricity, maintenance, insurance, tyres and financing — rose by an average of 27 percent. Not one factor, but all of them moved upwards at once.
New car prices climbed 19 percent over five years. The reasons are familiar: broad inflation, a shift by carmakers towards larger, more expensive SUVs and EVs, and tighter environmental rules that squeezed out many smaller combustion models. Add post-pandemic supply-chain chaos, and you get a recipe for steep increases.
Used cars didn’t offer much relief either, their prices rising 18.5 percent in the same period.
Fuel costs rose 32 percent, while electricity prices surged by up to 70 percent in some European countries. Maintenance costs jumped 29 percent, driven by pricier spare parts and a shortage of skilled mechanics that pushed labour rates higher. Tyres and insurance each added roughly another 25 percent to the total bill.
Then came interest rates. Since 2022, borrowing costs have spiked, hitting leasing and rental contracts directly. In 2024 alone, vehicle financing costs soared by 50 percent, making buying or leasing a car markedly more expensive.
Arval’s Five Tips to Tame Rising Costs
Choose the right car. Smaller models and saloons are more economical than SUVs.
Optimise contracts. Extending lease terms from 36 to 60 months can cut monthly payments and lower TCO.
Improve driving style. Efficient driving can influence up to 60 percent of running costs.
Plan charging smartly. For EVs, well-timed charging strategies can make a major difference to real-world economy.
Use alternative mobility. Public transport, rental and car-sharing can save both money and emissions.
A Lifestyle Choice, Not Just Transport
Arval notes that car ownership is no longer seen purely as freedom of movement but increasingly as a costly lifestyle choice. The 27 percent jump in five years reflects a wider upheaval in the automotive world — rising energy costs, regulatory pressure and the expensive shift to new technology.
The report calls it a “perfect storm” for motorists, yet suggests that informed planning and smarter decisions can soften the blow.
Where owning a car once meant independence, it now demands financial discipline.
