What Are The Costs of Owning a Car in Norway?
Norway is one of the most expensive countries to own a car, no doubt. The high prices are due to several factors, including the high cost of living, the need for winter tires, and the high taxes on cars. This may also be attributed to the recent uptake of electric vehicles.
In fact, 65% of new cars sold in Norway are electric, and the reason for this high market penetration is the costs of owning the alternatives. The taxes and operational costs of owning a fuel-propelled car in Norway are twice that of an electric vehicle.
The average cost of owning a car is between 5,663 USD (58,882 NOK) and 9,439 USD (103,988 NOK) annually or 470 USD to 790 USD monthly. The average new car price in Norway is 370,000 NOK (34,925 USD).
Traditionally, owning a car in Norway was viewed as a luxury, leading to high vehicle tax rates. This article focuses on the different factors that make up the cost of owning a car in Norway, including the prices of various car types, how much it costs to insure and tax a vehicle, and the general maintenance costs.
If you are buying a car in Norway, read out in-depth guide on how to do it.
How much does owning a car cost in Norway?
The average annual cost of owning a small car in Norway is 58,882 NOK, and 103,988 NOK for a medium-sized vehicle. The price per kilometer is 7.36 NOK and 7.43 NOK, respectively. You will spend 161 NOK and 285 NOK daily on your car.
Furthermore, the annual depreciation rate is set at 10% on new cars. Registration of a new vehicle is approximately 2,880 NOK on all cars, while yearly maintenance could cost between 8,000 NOK and 10,000 NOK.
Here is an example of the costs of owning a BMW 520D made in 2015 with a mileage of 16,000 km a year.
- Insurance: 1,000 NOK monthly for comprehensive coverage with a 75% bonus.
- Annual fixed service costs: 7,000 NOK.
- Fuel: Driving every day – 1,000 – 3,000 NOK per month or 12,000 NOK – 42,000 NOK per year.
- New tires every 3-4 years: 10,000 NOK.
- Car wash: 200 NOK per week.
That said, owning a car is tied to other running costs that you must consider, as they will affect the type of car you buy. The main costs of running a vehicle in Norway include:
- Decline in value
- Insurance
- Taxes
- Fuel
- Service and maintenance
Some of these costs, such as taxes, are regulated by the government, while others depend on your car’s type and status.
Car depreciation
Surprisingly or not, loss in the car value is your biggest cost. For a new car, you can expect a 20% loss in the first year. After that, it drops by 14%, falling to 10% in the sixth year.
Taxes
There are different taxes attached to owning a car in Norway. The taxes attached depend on whether you buy the car locally or import it. You’re expected to pay VAT, import duties, and greenhouse gas tax if you import.
Acquiring your car locally attracts a VAT, road tax, one-off registration, traffic insurance fee, and scrap deposit tax. All these are included in the final purchase price you pay the dealer.
When importing a car, you’ll pay 25% of the value of the vehicle as VAT to the authorities. The greenhouse tax charged depends on the gas emitted from your vehicle’s air conditioning system.
The tax levied on greenhouse gas depends on its weight. Most systems in cars fall in the 1,000 NOK tax bracket.
Buying a car in Norway also means a scrap deposit tax of around 2,400 NOK for most cars. Lastly, you pay a traffic insurance fee of 2,975 NOK for a registered vehicle up to 7,500 kg.
These taxes apply when purchasing a new car. If you buy a used car previously registered in the country, you’ll only pay the transfer fees as other taxes are paid on the acquisition by the first owner.
Insurance
It’s mandatory for every car owner in Norway to buy an insurance policy. On average, the cost of insurance for single-car drivers is between 8,000 NOK to 30,000 NOK, depending on the coverage you choose.
There are three types of insurance covers that you can take up in Norway:
- Liability cover: This is mandatory for all vehicle owners, and it covers medical charges of the third parties injured in a collision and repairs of their car.
- Comprehensive cover: It’s a broader coverage that includes cover for damages caused on your car by other causes apart from a collision, such as theft.
- Collision cover: This caters to the repairs on your car involved in a collision with another car or an object.
The insurance cost depends mainly on the owners’ age and the bonus points attached to the car. Younger drivers pay more than experienced older drivers; however, in old age, the cost readjusts and is higher for those above 60 years.
Fuel
When buying a car, its energy source should be a key consideration. Globally, fuel prices have been on the rise in the last few years.
In Norway, gasoline prices have gradually increased over the last few years, as seen below (USD per liter):
Source: tradingeconomics.com
July 2022 saw the price of gasoline hit the highest mark of 26 NOK, which saw car owners spend more on fuel than at any other time.
A few months later, the price of gasoline fell to around the 22 NOK mark, as seen below:
Source: globalpetrolprices.com.
The type of fuel you use in your car will impact the overall cost of energy on your car. Below is a comparison of different types of fuels:
| Type of fuel | Average price per liter (NOK) |
|---|---|
| Super 95 | 22 |
| Premium 98 | 23 |
| Diesel | 22 |
| LPG | 13 |
Electric cars have been on the rise in Norway as the country has a high electrical energy output which makes them easy to maintain on the road.
The high electricity production in the country has seen a high adaption of electric cars, with 65% of the new vehicles sold in the country in 2021 being electric. If you’re looking to save on fuel costs, the electric car is your best bet.
Subsidies and incentives for electric cars have boosted the mass interest in electric vehicles. Through this practice, the state aims to lower the impact of gases emitted by fuel-dependent cars.
Maintenance
Another cost you’ll incur when owning a car in Norway is maintenance, including service costs and wear and tear.
Maintenance costs will be determined by how good you’re on the road and your discipline in honoring service visits.
You can choose to carry out the service and repairs in your car brand workshops or other private workshops. On average, servicing your car at the brand’s workshops will cost you 8,000 NOK, which is higher than in other private workshops not associated with the brand.
If you acquire a new car and opt for comprehensive insurance cover, then it’ll cater for repairs above the 10,000 NOK mark in the years stipulated in the policy. This means you’ll have to pay for minor repairs below the threshold.
You’ll be expected to change the car tires every five years, a cost you must consider.
How much does it cost to register a car in Norway?
If you import a car to Norway, you should expect additional expenses such as car registration fees and VAT. Vehicles that were already registered before are exempt and have to be re-registered at a lower cost.
You’re expected to settle a one-off tax registration which is a duty paid on every new vehicle.
A VAT tax is set to 25% of the value of the car you import. You must pay a one-off fee to Tax Agency when the vehicle has been approved by the Norwegian Public Roads Administration.
Factors that affect the price you pay for the registration include:
- Carbon dioxide emissions (CO2)
- Nitrogen dioxide emission (NOx)
- Cylinder capacity
- Net weight
- Vehicle’s tax bracket
- Engine capacity
Registration cost is a one-off payment, and it’s usually high, which should prompt you to evaluate any options available to warrant a reduction. Some cars, such as ambulances and electric vehicles, can prompt the scrapping or lowering of the one-off registration tax.
You could also request to remove or reduce this tax when importing a used car. The authorities may then opt to lower the cost by using a different method in calculating your registration amount payable.
The registration tax charged in Norway on new vehicles is between 100% to 200% of the car’s production cost. With the high tax, most people in the country opt for electric cars, which are exempt from the registration tax.
Keep in mind that this tax applies only to new vehicles.
Carbon emission is a crucial determinant of the amount you pay as a registration fee. A car that emits below 95 grams of carbon per kilometer is exempted from this tax. If your car emits above this level, your registration tax will be higher, and it’s a progressive rate, meaning higher emission attracts increased fees.
The process of registering a vehicle in the country is seamless. You’ll first need to clear with the customs, then take the car to a traffic station where a roadworthiness test will be carried out and carbon emission rates evaluated. Upon approval, you’ll need to settle the registration fee.
For successful registration, you’ll need to provide the authorities with the following:
- A local ID or valid passport
- Ownership proof
- Proof of insurance
- Roadworthiness test proof
- Proof of any tax paid
Once the registration is successful, if you did the process online, you can download and print the temporary approval before receiving the original certificate through the post.
Car prices in Norway
Norway is known for some of the highest car prices due to the high cost of living and taxes. You can expect to pay about 350,000 NOK (33,000 USD) for a middle-class second-hand vehicle.
That said, Tesla remains the most common car brand in Norway. The subsidies and incentives for electric cars have made Norway shift to electric vehicles swiftly.
Here are the most popular car brands in Norway and the number of vehicles sold in 2021:
Source: statista.com
Prices of new cars vary on different brands based on several aspects, such as engine power, fuel consumption, and CO2 emissions.
The table below shows the current prices of different new cars in the country:
| Car model | Average price (NOK) |
|---|---|
| Mazda 3 Sedan 2.5 | 250,000 |
| Audi RS5 | 750,000 |
| Volkswagen Tiguan S | 260,000 |
| Ford GT LM | 5,000,000 |
| Subaru Legacy Premium | 265,000 |
Used cars are cheaper, given that you’re exempted from incurring some costs, such as registration costs.
The price of a used car will be determined by the model, year of make, and the miles it has covered. Overall appearance and how well it’s maintained will affect the price you buy the car.
Below are the average prices of used cars in Norway:
| Car model | Mileage (Kms) | Average price (NOK) |
|---|---|---|
| Volkswagen Polo 1.0 | 45,000 | 180,000 |
| Jeep Compass 1.3 | 26,000 | 495,000 |
| 2006 Lexus GS450H | 200,000 | 170,000 |
| 2013 Mercedes Benz GL class | 160,000 | 550,000 |
| 2016 BMW 3 Series Xdrive | 97,000 | 520,000 |
See more on car prices in Norway.
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