Owning a Car is 27% More Expensive Today Than Five Years Ago

The total cost of ownership (TCO) of a vehicle has surged over the past five years, recording a 27% increase. The report, featured in the white paper "The Global Vision of Total Cost of Ownership: Perspectives for 2025 and Strategic Opportunities for Management," prepared by Arval, attributes this rise to an exceptional combination of factors that have driven up all components of car usage costs, from purchase to maintenance.

The analysis highlights that between 2020 and 2025, a "perfect storm" has simultaneously impacted vehicle prices, energy costs, repairs, insurance, tyres, and financing. The accumulation of these increases has led to a significant rise in mobility costs, affecting both individuals and large fleets.

Among the most significant elements is the purchase price. Vehicles have become 19% more expensive during this period due to global inflation, the greater presence of SUVs in catalogues, the incorporation of more technology and safety systems, and the advancement of electrification.

New regulatory demands in Europe have also pushed manufacturers to focus their production on electric and plug-in hybrid models, reducing the availability of more affordable combustion models.

Added to this are the supply chain tensions recorded in the years following the pandemic, which have raised manufacturing costs. The used car market has not escaped this trend either, with increases of 44.5% in the most tense years and a cumulative rise of 18.5% since 2020.

Energy is another major factor contributing to the rise in ownership costs. Fuel prices have risen by an average of 32% since 2020, affected by global volatility and geopolitical tensions. Electricity, both domestic and for businesses, has shown even more pronounced increases, of 70% and 80%, respectively, between 2020 and 2024, also raising the cost of using electrified vehicles.

Car maintenance costs have risen by 29% due to increased labour costs, delays in parts arrival, and the greater technical complexity of modern vehicles. Tyre and insurance prices have increased by 27% over these five years.

Financing has not been left out: interest rates have increased by 35% between 2022 and 2025, peaking at 50% in 2024, affecting both financed purchases and leasing contracts.

In this scenario, the white paper identifies five key strategies to contain TCO. The first is to correctly select the vehicle, avoiding unnecessary oversizing and considering that SUVs entail higher costs. It also suggests optimising leasing contracts by extending their duration to reduce the monthly fee, a particularly effective measure for pure electric vehicles.

The study highlights the impact of driving style, which influences 60% of TCO components, and recommends training programmes in efficient driving.

It also emphasises the importance of adequately planning the charging strategy for electrified vehicles, combining infrastructure at home, work, and public spaces to reduce energy costs.

Finally, it encourages exploring alternative mobility models, from mobility budgets and flexible leasing to car sharing or public transport, aiming to reduce both the carbon footprint and the costs associated with travel.