For members


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

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For members


Ten things for foreigners to know when learning to drive in Denmark

Foreign residents from outside the EU are sometimes required to learn and take a driving test in Denmark – even if they can already drive. We asked driving instructors and foreign drivers in Denmark for their best advice.

Ten things for foreigners to know when learning to drive in Denmark

Do a bit of homework

A bit of home study and focus on technical aspects – which may be different from other countries where you have driving experience – can set you on your way, according to both an instructor and a testee.

“Starting from attending the theory classes, a consistent focus on the technical instructions when you are driving with your instructor is extremely important”, Martin Kremmling, a driving instructor from Næstved, told The Local.

“I found the driving licence handbook very helpful, especially when I had to understand the uniquely Danish technical and theoretical aspects of driving,” Kiama Chola, a Kenyan expat who previously held an American driving licence, said.

Rosa Camero, a Mexican native who had driven for almost two decades prior to moving to Denmark, said it was like starting from scratch. “What helped me pass my theory test was taking online tests every single day,” she said.

Prepare yourself psychologically 

Getting started on your journey to getting a driving licence in Denmark requires preparing oneself psychologically.

“When you are behind the wheel of a car, your mental strength is what will help you in driving safely and efficiently,” says Kremmling.

Learn to drive from the passenger’s seat

Unlike in many other countries, Denmark does not allow a learner’s permit that allows students to continue practising their driving with a parent or someone with a valid driver’s licence. Therefore, many students have to pay to drive with their instructors

“Understandably, the process of getting a driver’s licence in Denmark is expensive. But, a student can learn by just being a passenger,” says Kremmling.

“If you can sit in the passenger’s seat and see how the driver prepares and manoeuvres, it will go a long way in helping when you are behind the steering wheel”.

Maya Pandya, an Indian native who moved to Denmark, agrees.

“It helped me to observe and learn while sitting next to my husband as he drove, especially changing speeds from the highways to city limits, and at the roundabouts,” she said.

Find the driving school and the language of instruction that is best for you

“I had to find the right school and instructor before investing my time and money in getting my driver’s licence,” Hina Akram, who moved from Pakistan to Copenhagen, told The Local.

Akram chose Urdu to be the language of instruction and tests. While this was helpful in overcoming the language barrier, she notes that some terms don’t have exact translations from Danish.

Some Danish schools offer driving instructions in various languages – this will often be stated on the school’s website, or you can call them to find out. When taking the practical test, if a foreign language is chosen, a translator will have to be hired at an extra fee of around 1,000 kroner.

READ ALSO: What to know about taking the Danish driving test as a foreigner

Communication is key

Open communication is key to success, according to some who learned to drive in Denmark after moving here.

“My first driving school and instructor were not a good fit for me, as I could not fully understand them. It changed when I changed my school and instructor, whom I could understand and ask any question, no matter how silly it may have sounded,” Chola says.

Driving instructor Deniz Cicek said he modifies his teaching based on his student’s level of manoeuvring.

“For some of my foreign students, I had to begin with teaching them to manoeuvre a shopping trolley before letting them sit behind the steering wheel”, says Cicek.

Civek said he uses videos on TikTok and YouTube to engage his students and for them to take note of driving safely while learning how to master the theory and road tests.

READ ALSO: How and when should I exchange my foreign driving licence for a Danish one?

Respect and acknowledge uniquely Danish road safety needs

“Despite being from the EU, driving in Denmark – especially in Copenhagen – is quite different,” said Kristel, an Estonian who moved from London. She had to be especially aware of the biking lanes and bikers in Denmark.

“I encourage my foreign students, especially those from outside of Europe, to understand key signs on the road, arrows and lanes that they may not be familiar with, before getting started,” Kremmling said, adding that he encourages his students to begin with cycling to understand traffic and develop better judgement around safe driving.

“I was learning new terms for the first time. For instance, ‘unconditional give way duty’. I worked with my instructor to really understand how it plays out while driving,” Pandya said.

Remember “mirror-mirror-shoulder”

Every instructor will tell their students this well before they turn the ignition.

“Checking your rear-view mirror, the side mirror, and looking over your shoulder should become natural for every driver,” says Kremmling.

This is echoed by Cicek. “The mirror-mirror-shoulder check is probably the most important thing in a practical exam. Every practical test examiner will be looking at you if you have checked your mirrors and looked over your shoulder”, he says.

“Road safety is taken seriously and being meticulous is the way to being a safe and successful driver in Denmark. Especially so in the city centres, where there are many cyclists on the side lanes – so one has to be extra vigilant,” Chola notes.

Try not to stress about the exam

“Most of my foreign students who fail their exams seem to be taken over by stress,” says Kremmling.

One way to avoid this is prioritisation, according to Camero.

“It can be overwhelming and stressful to remember everything at once. So, I prioritised based on what I saw on online tests and what my driving instructor said would be important. That helped a lot,” she said.

Another way is to imagine driving with your instructor.

“For your practical test, it can be nerve-wracking for foreign students to be driving with someone they are meeting for the first time. I always suggest that they imagine that they are driving with their driving instructor, with whom they have established a comfort level,” Cicek says.

Use online resources to prepare

Several sites offer practice theory tests. These include Teoriklar, Sikkertrafik and Bedrebilist.

“It is worth investing in as it helped me pass my theory after having been unsuccessful without these online tests two previous times,” says Pandya.

Know that the practical test evaluators are on your side

At the end of it all, both Kremmling and Cicek emphasise that students need not fear test evaluators but consider them as allies in their process.

“They are nice and there to help”, says Cicek.

Kremmling echoes the same sentiment: “the evaluators are experienced and understand how stressful this can be, particularly for a foreign student.”