If you are buying a new car in Ireland what is this car going to cost you per week. I have done a calculation based on an average car costing €22,000 euro over 5 years. I have taken the weekly repayments, cost of insurance, tax, petrol and maintenance into consideration. What we should have at the end is the total cost of driving your average family car.
Ok so lets start
Car costs €22,000
Bought over 5 years with no deposit with 9% interest will cost €104 per week
For this experiment we will put it in tax band C which is equal to €5.81 per week
Lets assume that we drive the yearly average which is 18000 kms per year or 346 kms per week
Lets also assume that it does reasonable mileage per gallon of 70 kms = about 5 gallons per week @ €8.50 per gallon = €42.50 per week.
Now we must add insurance at an average of €520 per year to a driver with a full license and 3 years’ experience working out at €10 per week.
Servicing and Maintenance will probably be around €9.60 per week over the 5 years. This is of course if nothing major goes wrong with car.
104.00 + 5.81 + 42.50 + 10.00 + 9.60 = 171.91
So the total cost per week to drive an average family new car in Ireland is actually a whopping €171.91 per week.
Now lets assume that the average wage of the people who buy these cars is €500 per week take home pay meaning you must be earning in excess of €35,000 per year. This means that is costing more than 33% of your income to have a used car sitting outside your door.
However after 5 years this car still has some value, if its not crashed or damaged it will be worth somewhere in the region of €6000 giving you back €23.73 per week.
So the question we have to ask is how many people can afford to pay 33% of their wages out on a used car for 5 years, after all it becomes a
used car the minute its driven out of the dealers forecourt.
All these figures are based on averages, in many cases it will cost more for the average family car as most will be driven up to 30,000 kms per year.