DRIVERS ARE UNDERESTIMATING the cost of running a car by 50%, a new study has found.

The research conducted by the Economic and Social Research Institute (ESRI) found that many drivers overlook substantial costs including insurance, maintenance and parking. 

Over 70% of drivers are underestimating their costs, mostly by a substantial amount.

“These findings show that most motorists are not aware of how much their car costs them each year,” said Shane Timmons, 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.”

ESRI surveyed over 800 drivers across the country. Participants were first asked to give their best estimate of how much they personally spend each year on 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.

The average estimate was €2,000 per year, but actual costs added up to almost €3,000. 

Fuel was the largest single reported expense, with annual cost averaging €1,560.

This was followed by insurance (€500) and charging (€480).

Long-term parking amounted to over €200, with cleaning over €100, and tolls and toll tags around €80.

The research also found large differences in costs between vehicle types. Drivers of electric vehicles reported annual running costs close to half those of drivers of petrol or diesel cars, with €1,560 for electric vehicles compared with €2,715 for petrol cars and €3,546 for diesel.

However, the degree of cost underestimation was similar across engine types. The tendency to underestimate was also widespread across age groups and income levels.