How Much Does It Cost to Run a Car in Ireland?

There are several different costs to consider when it comes to owning and operating a car in Ireland.

As of early 2024, Irish motorists are spending an average of €220 per month on vehicle running costs. There are numerous factors in play, from fuel to insurance to repair and maintenance to simply just keeping your car clean. 

While running a car isn't cheap, understanding these costs can help you budget effectively and identify areas for potential savings. Continue reading as we break down these costs in this article.

Initial Purchase Costs

New vs Old

Start with a careful approach when buying your car to set the tone for future savings. You may want to consider the difference between purchasing a new vehicle versus a used one. Both approaches have their pros and cons, and you can expect a sizeable difference in the purchase price. 

You’ll need to decide precisely what’s right for you where your car is concerned, and measure your expectations accordingly - a brand new car is likely to have more modern features, a lengthier warranty, more durable condition, and stronger fuel efficiency than a notably older model.

However, if you do find a used car that is up to a high standard, it may be worth the considerably lesser investment than a factory-fresh model. Just be mindful of potential repair and replacement! 

Vehicle Registration Tax

Traditionally, vehicle registration tax (VRT) is paid to the Revenue once a vehicle is officially registered in Ireland. VRT isn’t a flat fee as there are different categories that can apply to a specific vehicle - five to be exact. You can estimate your car's VRT using Revenue’s VRT Calculator.

When buying a car from a dealer, they will register the vehicle and pay the VRT to Revenue - this is typically included in the overall sale price. 

Dealer Fees

There may be hidden charges involved at the purchase stage, so be prepared for dealer fees to come into play. 

These fees generally apply to the work a dealer has to do prior to handing you the keys to your new car. This can include a pre-vehicle inspection, cleaning, fitting registration plates, and carrying out relevant paperwork. 

Be sure to enquire about these potential additional costs before finalising the sale. 

Motor Tax

Under the letter of the law, you must pay for motor tax, so you’ll want to sort that out immediately. You can pay online, or contact your local tax office to set this up. 

Car Insurance Costs

As a legal requirement, you must have car insurance before driving your vehicle in public and display your valid in-date insurance on your windscreen at all times. If you drive while uninsured, you could be fined up to €5000 and get 5 penalty points. You could also go to prison for up to 6 months.

Your insurance premium is greatly affected by your driving history and experience - a younger or first-time driver is more likely to receive a higher premium, for example.

Other factors can include penalty points, your driving licence, annual mileage, type of car, and more. Read this article to learn about the factors affecting car insurance prices and how to reduce your premium.

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Fuel Costs

Fuel can be notoriously pricey, and it’s a regular expense, but there are ways of keeping your costs down. 

Your engine size plays a major role here. The bigger the engine, the more fuel required to keep it purring. The same goes for the model of car you’ve opted for - a gas-guzzling giant like a sports car or a large jeep is always going to impact you more than something smaller. Depending on how much money you’re looking to save in this regard, an electric vehicle may be the answer you’re looking for.

Whatever model you settle on (or already have), FuelCompare provides a nationwide compare-and-contrast on petrol and diesel prices at service stations, while the Sustainable Energy Authority of Ireland (SEAI) offers a handy fuel price comparison when it comes to considering an electric vehicle. 

Annual Road Tax

The annual rate for road tax in Ireland differs from vehicle to vehicle. Electric vehicles, for instance, are subject to the lowest possible tax band at just €120 per year for a Battery Electric Vehicle (BEV). 

The motor tax rate for a more traditional private car is based on three different metrics: 

• Engine size if your car was manufactured before July 2008
• CO2 emissions output (NEDC) if your car was registered between 1 July 2008 and 31 December 2020
• CO2 emissions output (WLTP) if your car was registered after 1 January 2021

For all payments: 

• The half-year payment is 55.5% of the annual rate
• The quarterly payment is 28.25% of the annual rate
• The monthly cost is 10% of the annual rate

You can calculate your motor tax rate by your Vehicle Registration Number or by specific basis of assessment at the Motor Tax Online website.

Maintenance and Servicing 

As outlined when weighing up the pros and cons of buying a new car versus opting to go with an older/used model, the nature of maintenance and upkeep is likely to apply to one more so than the other. 

That said, keeping your car in running smoothly should be a priority regardless of how many miles are on the clock. Let’s look at the most common costs involved: 

How Often?

Your vehicle should let you know when a service is due via a flashing light on your dashboard, but it’s good to keep your own track of when you last took the car to an expert for inspection. If a year has gone by, make that appointment. 

How Much?

This will vary based on the nature of your car, but generally a service should cost somewhere in the region of between €80 and €125. You may want to shop around ahead of bringing your car to a garage, though. 

Check list of body repairers who are AIG partners.

Washing

While you can always choose to wash your car at home, you might prefer something more professional. This is another one of those ‘it pays to shop around’ situations, with purpose-built car washes and standard garage add-ons available. 

National Car Test (NCT)

The NCT is mandatory for every vehicle on the road in Ireland. The test highlights three key areas for road users - greater road safety, environmental protection, and economic benefits. 

The main purpose of the test is to ensure that all vehicles on Irish roads are up to the highest standards, thus aiming to reduce the number of accidents. The test is conducted every two years for vehicles under the age of 10 years. 

It costs €55 for a full test, while a re-test costs €28. To book your test, visit the official NCT website.

Other Additional Costs: Parking, Fines and Tolls

Parking

As noted, there are many different costs that arise from owning and operating a car. Parking, for instance, is something you’re almost guaranteed to incur a cost for unless you exclusively use a reserved space everywhere you travel. 

Fines

Driving responsibly is crucial not only for your own safety but also for the safety of others. Furthermore, ignoring road rules can lead to significant fines, impacting your finances and potentially leading to license suspension or even imprisonment. From speeding and parking violations to serious offenses like driving under the influence, the penalties can be severe.

Avoiding these fines is straightforward: adhere to speed limits, park legally, never drive under the influence of alcohol or drugs, and ensure your vehicle is properly taxed and insured.

By prioritizing responsible driving habits, you protect yourself, your passengers, and other road users, while also avoiding the financial burden and legal consequences of traffic fines.

Check list of driving offences and respective charges

Tolls

Ireland is host to many toll roads that drivers must pay to pass through, as overseen by Transport Infrastructure Ireland (TII). These roads are usually located on major inter-urban corridors such as motorways, bypasses, bridges, and tunnels. 

Different payment methods are available, including the old-school exchange of physical tender between driver and toll agent at a manual booth, or electronic tags such as eFlow. 

Check full list of toll locations and charges in Ireland

Car Depreciation

Car depreciation may well prove the biggest and most expensive factor when it comes to buying and running a car. A car loses significant value the moment it's driven off the dealer's lot, and this decline remains steep for the first few years of ownership.

Why? Well, it’s a combination of factors:

• There’s perception, in which a new car immediately becomes less ‘new’ once the sticker price has been removed. 
• Then you have mileage - the more miles on the clock, the less attractive the vehicle is to the second-hand market. 
• General wear-and-tear is a factor, of course, while fuel efficiency and number of emissions can also play a part.

Interestingly, recent trends suggest that EV owners are being hit the hardest as the depreciation factor affects the used-car market in Ireland. 

So, how can you minimize the impact of depreciation? 

Keep your car in the best possible physical condition inside and out, for a start. Resist adding major modifications to the car, as it doesn’t increase value on the secondary market and some buyers may steer away from the vehicle altogether in favour of a simpler option. Check out our article, for more tips on maintaining your car's resale value.

Conclusion

As you can see, it all adds up. It’s best to plan and budget accordingly when you’re lining up a new car in your life. Hopefully, this guide will enable you to avoid any hidden costs and be aware of the various aspects that affect your overall bank balance. 

And as you might expect, insurance is one such area that you really don’t want to approach lightly. Thankfully, at AIG we’re certain that we have the right package for you. 

We offer a wide range of car insurance coverage. Get a quote online and save 10%. Feel free to contact us if you want to chat directly.