SHARE
COPY LINK
For members

CARS

Explained: Why is it so expensive to buy a car in Denmark?

The price of purchasing a car in Denmark is a lot less than what it will actually cost you to get your vehicle on the road.

Explained: Why is it so expensive to buy a car in Denmark?
File photo: Anne Bæk / Ritzau Scanpix

Road tax, fuel, insurance, maintenance – the high costs of running a car are well known to motorists the world over and are no different, and certainly no cheaper, in Denmark.

The Nordic nation’s Vehicle Registration Tax (Registreringsafgift – RA) represents an enormous outlay for motorists almost unheard of elsewhere, and must be added to the purchasing price as well as value-added tax (moms in Danish) to find the total cost of buying a new car.

Hydrogen-powered cars are exempt from RA until the end of 2021, and reductions apply to hybrid and electric vehicles. These are due to be phased out by 2022.

In 2019, the RA is 85 percent of a car’s purchase price for cars worth up to 193,400 kroner. For cars worth more than this, 150 percent of the remaining value over 193,400 kroner must be added to reach the total RA.

Using an example price, this would mean that a petrol-driven car bought for 117,687 kroner would be liable for a 102,891-kroner registration fee. With value-added tax, the total cost would come to 250,000 kroner — more than double the price on the forecourt.

Reductions for electric cars are currently in place. For the calculated RA, 20 percent is payable for cars registered in 2016, 2017, 2018 and 2019; this will increase to 40 percent in 2020, 65 percent in 2021 and 100 percent in 2023.

It is also important to be aware that deductions are further applicable to these electric vehicle fees.

Previous reductions of 10,000 kroner were increased to 40,000 kroner from the total RA in 2019, and this will be further increased to 77,500 in 2020 before being lapsing from the following year.

In practical terms, this means that the RA for electric vehicles which cost under 400,000 kroner is reduced to nearly nothing, at least until 2021.

Hybrid cars are also subject to deductions from the RA, meaning that the cost of purchasing this type of vehicle will also remain much lower than traditionally-powered cars until the end of 2021, when the RA will be almost fully phased in.

Used cars

Used vehicles are, in principle, subject to the same rules as new cars. The RA and any applicable deductions or additions are adjusted relative to the difference in value of the used car compared with an equivalent new model.

Most used cars will already be registered (in practice, this means they have a valid Danish number plate), however. They RA does not have to paid in these cases. Exceptions include used cars bought abroad and imported into Denmark, which must be registered, and cars which have been off the road for a period of time and therefore uninsured, meaning their registrations have lapsed.

Further adjustments to the RA can be applied according to fuel consumption.

Cars over 35 years old are defined as ‘veterans’ and generally have lower RA costs attached, depending on their condition and usage.

The taxing of Danish car owners dates back to 1910, when the government implemented a tax for driving on public roads. The RA as it stands today got its start in 1924, when the government put a tax on the import of ‘luxury items’, including vehicles. The two-tiered system has been in place since 1977, with running changes to the price cut-off point for the higher fee.

How likely is it that fees could change?

The RA was reduced from even higher rates under the last government, though that move has since been criticized for being insufficiently financed, Altinget reported last month.

The Social Democrats formed a new minority government with the support of other left-wing parties following last month’s election. The party said prior to the election they did not support increasing the overall cost of buying a car, while the other parties stated they wanted the cost to motorists to remain as they are now.

But the method of calculating the RA could be reformed, moving away from the monetary value of the car and towards technical specifications such as its fuel type and emissions.

Sources: SKAT, Ministry of Tax, FDM, Altinget

READ ALSO: Here’s how to buy a used car in Denmark

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

DRIVING

COMPARE: Which countries in Europe have the strictest drink-drive limits?

Certain countries around Europe have stricter policies than others regarding drinking and driving and harsher punishments for those caught exceeding legal limits. Here's what you need to know.

COMPARE: Which countries in Europe have the strictest drink-drive limits?

European countries set their own driving laws and speed limits and it’s no different when it comes to legal drink-drive limits.

While the safest thing to do of course, is to drink no alcohol at all before driving it is useful to know what the limit is in the country you are driving in whether as a tourist or as someone who frequently crosses European borders by car for work.

While some countries, such as the Czech Republic, have zero tolerance for drinking and driving, in others people are allowed to have a certain amount of alcohol in their blood while driving.

However, not only can the rules be different between countries, they are usually stricter for commercial (or bus) drivers and novice drivers as well. Besides that, the blood alcohol concentration (BAC) is extremely difficult to estimate, so the old “one beer is ok” standards no longer safely apply.

In the end, the only way to be safe is to avoid consuming alcohol before driving. Any amount will slow reflexes while giving you dangerous higher confidence. According to the UK’s National Health Service, there is no ‘safe’ drinking level.

How is blood alcohol level measured?

European countries mostly measure blood alcohol concentration (BAC), which is the amount, in grams, of alcohol in one litre of blood.

After alcohol is consumed, it will be absorbed fast from the stomach and intestine to the bloodstream. There, it is broken down by a liver-produced enzyme.

Each person will absorb alcohol at their own speed, and the enzyme will also work differently in each one.

The BAC will depend on these metabolic particularities as well as body weight, gender, how fast and how much the person drank, their age and whether or not (and how much) they have eaten, and even stress levels at the time.

In other words there are many things that may influence the alcohol concentration.

The only way to effectively measure BAC is by taking a blood test – even a breathalyser test could show different results. Still, this is the measuring unit used by many EU countries when deciding on drinking limits and penalties for drivers.

Here are the latest rules and limits.

Austria, Denmark, France, Germany, Italy, Spain, Switzerland, Greece, Netherlands, Belgium, Portugal, and Croatia

In most EU countries, the limit is just under 0.5g/l for standard drivers (stricter rules could be in place for novice or professional drivers).

This could be exceeded by a man with average weight who consumed one pint of beer (containing 4.2% alcohol) and two glasses of red wine (13% alcohol) while having dinner.

If a person is caught driving with more than 0.8g/l of blood alcohol content in Austria, they can pay fines of up to € 5,900 and to have their license taken for one year in some cases.

In France, if BAC exceeds 0.8g/l, they could end up with a 2-year jail sentence and a € 4,500 fine. In Germany, penalties start at a € 500 fine and a one-month license suspension. In Greece, drunk drivers could face up to years of imprisonment.

In Denmark, first time offenders are likely to have their licences suspended and could be required to go on self-paid alcohol and traffic courses if BAC levels are low. Italy has penalties that vary depending on whether or not the driver has caused an accident and could lead to car apprehension, fines and prison sentences.

In Spain, going over a 1.2g/l limit is a criminal offence that could lead to imprisonment sentences and hefty fines. 

Norway, Sweden, and Poland

In Norway, Sweden, and Poland, the limit for standard drivers is 0.2g/l. It could take a woman with average weight one standard drink, or one can of beer, to reach that level.

Penalties in Norway can start at a one month salary fine and a criminal record. In Poland, fines are expected if you surpass the limit, and you could also have your license revoked and receive a prison sentence.

Czech Republic, Hungary, and Slovakia

The Czech Republic, Hungary, and Slovakia have one of the strictest rules in the European Union. There is no allowed limit of alcohol in the blood for drivers.

In the Czech Republic, fines start at € 100 to € 800, and a driving ban of up to one year can be instituted for those driving with a 0.3 BAC level. However, the harshest penalties come if the BAC level surpasses 1 g/l, fines can be up to € 2,000, and drivers could be banned from driving for 10 years and imprisoned for up to three years.

This is intended to be a general guide and reference. Check the current and specific rules in the country you plan to travel to. The easiest and best way to be safe and protect yourself and others is to refrain from drinking alcohol and driving.

SHOW COMMENTS