Disposable Income
Disposable Income and a Car: What It Costs
January 26, 20262 min read
disposable income
car
transport
A car is one of the most expensive fixed costs many people carry, but most of the bill is hidden in depreciation, not just fuel and insurance. A car in the 200,000-300,000 DKK price range typically costs between 70,000 and 86,000 DKK a year all in, roughly 5,800-7,200 DKK a month. FDM (Denmark's motoring association) breaks down the same cost categories (depreciation, insurance, running costs) in their car-budget guide.
What a car actually costs
The total bill has several parts, and depreciation is often the biggest and most overlooked:
- Depreciation: The car loses value every year whether you drive it or not, often the single biggest item
- Fixed costs: Insurance, road tax, and any car loan payment, paid regardless of distance driven
- Running costs: Fuel or electricity, service, and tires, rise with how much you drive
Alternatives to owning a car
Before committing to a car, it's worth comparing with the alternatives:
- Public transport: Typically markedly cheaper than a car, but less flexible
- Bicycle: Lowest running cost, but depends on distance and weather
- Car-sharing: You only pay when you use it, relevant if you rarely drive
Frequently asked questions
- Does the bank count a car as a fixed expense? Yes. Car loans, insurance, and fixed running costs are counted as fixed expenses and reduce your disposable income directly.
- Is a new or used car cheapest to run? Depreciation is typically highest on a new car in the first years, while an older car can have higher maintenance costs. The total math depends on the specific car.
- How do I see my actual car expenses? Upload your bank statements in Reelt, and see all transport-related expenses together, instead of guessing.
