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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

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DRIVING

What’s it like driving from Scandinavia to the UK with a young family?

With the cost of airline tickets increasingly discouraging, is driving from Scandinavia to the UK becoming a more attractive option? The Local Denmark editor Michael Barrett gave it a try.

What’s it like driving from Scandinavia to the UK with a young family?

This summer has seen the return of large-scale international travel after a couple of Covid-hit years that have not been a picnic for anyone.

While the end of restrictions came as a relief, severe delays and disruptions at airports have added a new uncertainty around travel in 2022.

Scandinavia has not been an exception to this, with strikes at Scandinavian airline SAS and delays at Copenhagen and other airports among the problems faced by the sector.

Additionally, the increasing price of airline tickets in a time when inflation is hitting living costs across the board has become another factor discouraging air travel.

Finally, there’s the impact of air travel on climate to be considered. So is there an alternative?

The plan

Unlike colleagues who have made long distance journeys from France and Sweden respectively by rail, our plan was to make the trip from our home in Denmark to the UK by car.

There are a few reasons we picked this less climate-friendly option. I’ll readily admit they were driven (no pun intended) by our own needs, and not those of the planet. I hope we can offset this by using the train more than the car for longer journeys within Denmark, where costs are competitive.

Once we decided not to take our usual Ryanair flight, we only really considered driving. This is primarily because we have a toddler (age two), and felt that on such a long journey, the ability to control the timing and length of our stops would be crucial.

Secondly, the route would have taken longer and been more difficult logistically by rail, and would also have cost more. For example, we arrived at Harwich International Port late on a weekday evening, from where onward travel was to rural Suffolk. The thought of doing this on multiple local rail (possibly bus) services with a tired two-year-old makes me shudder a bit.

The route

From our home in central Denmark, we set out on a Monday morning and drove south on the E45 motorway, crossing the German border and continuing past Hamburg. We then got on to the A1 Autobahn and made for Bremen, where we stopped overnight.

Travelling non-stop, this journey takes just under four hours. It took us around five and a half. We stopped twice and were caught in traffic at Hamburg, where there is lot of construction going on around the city’s ring road.

Leaving early (just after 6am) the following day, we drove southwest and crossed the border into the Netherlands after a brief stop, but then managed to complete the journey to the port town Hook of Holland without a further break.

Our ferry from Hook of Holland to Harwich was due to leave at 2:15pm and check-in time was an hour before that. This was the only deadline we had on our journey that would have been problematic to miss, so we gave ourselves plenty of time for the drive from Bremen. We arrived in Hook of Holland at around 11:30am.

Next was a six-hour ferry crossing to the East Anglian coast. We booked a cabin – they are inexpensive on daytime crossings – which gave us a chance to relax after the drive and our daughter a comfortable spot for her afternoon nap.

After a queue at customs in Harwich which took around 45 minutes, we were driving through the Essex countryside just before 9pm local time. The final drive to our destination took an hour and a half.

What went right

It’s not the most relevant information for anyone considering a similar trip, but I have to mention our car. A 2003 VW Polo we bought two years ago that has never had any mechanical issues, I was nevertheless braced for possible problems given its age (and ensured I had roadside assistance for outside of Denmark, more detail on this below).

However, there was not so much as a hint of an issue of any kind at any point during the 900 kilometres it covered on the journey, nor on the way home. Respect.

Our plan to split the trip into two days paid off. I think you could do it in one day (there are also overnight ferries) if you shared the driving and needed less flexibility. I should also recognise here that we live relatively close to Germany and our destination was close to the east coast of the UK. If you were travelling, for example, from Copenhagen to Cardiff, you’d have significantly more driving to do.

For us, knowing we could take long breaks if we needed them took a lot of stress out of the journey and allowed us to adapt to our toddler’s needs – changing nappies, finding a service station playground or stopping for an ice cream.

Stopping overnight also gave us the chance to see some new places (we switched things up on the way back and stayed in Groningen in the north of the Netherlands, instead of Bremen) and gave us a feeling of being on our own little bonus holiday.

What went wrong

In all, things went as well as we possibly could have hoped for and our conclusion after we got back home was that we’d like to travel this way again.

We were stopped by traffic police in Groningen city centre because I failed to understand signs showing we were entering a public transport-only zone. The officers who stopped us then offered to escort us to our accommodation a few streets away.

The ferry, operated by Stena Lines, had far less to do on board than we’d imagined there would be on a six-hour voyage. Two tiny off-duty shops, a cinema showing a superhero film and a minuscule play area (which our daughter nevertheless enjoyed) were about the extent of it. We hadn’t downloaded any films ourselves or brought much entertainment with us from the car, so we got a bit bored during the crossing. This is hardly a serious gripe and an easy one to rectify on the return trip.

The practical stuff 

Roadside assistance is obviously crucial for a journey like this, and it’s also important to double check your insurance is valid once you leave the country in which your car is registered and insured – Denmark, in our case.

Foreign authorities can check your insurance is valid. You can document this with the International Motor Insurance or “Green” card, which serves as proof you have motor insurance when you drive outside of the EU (you don’t need it within the EU).

This means that (in theory) you can be asked to present it in the UK. We weren’t asked for it.

The Green Card can be printed via your insurance company’s website. You’ll need your MitID or NemID secure login to access the platform and print off your document. Here is an example of the relevant page on the website of insurance company Tryg. If you can’t find the right section on your insurance company’s website, contact them by phone.

A number of Danish companies specialise in roadside assistance, including Falck and SOS Dansk Autohjælp. You can also include roadside assistance as part of your motor insurance package. We have the latter option, but in either case, I’d recommend calling your provider to make sure you are covered for breakdown in the EU and non-EU countries like the UK (if that’s where you’re going). Obviously, you should add such cover to your existing deal if you don’t have it, or change to a different deal.

The company which operates the ferry from Hook of Holland to Harwich is Stena Line. Both directions have daytime and overnight departures.

There is a range of prices, and I couldn’t cover all the options here if I tried. However, I’d recommend a cabin on the daytime departures, because it’s inexpensive and gives you a bit of personal space and privacy, which is useful with children.

After calculating what our approximate fuel costs would be, the price of the hotel stays and ferry tickets, we found that the trip cost around 1,500 kroner more than we would have paid to fly from Billund Airport to London Stansted with checked-in baggage with Ryanair on the same dates. In return, we could take as much luggage as we want with us (and back), we got to see Bremen and Groningen and had our own car with us in the UK. This was more than worth the additional expense.

I also spent 50 kroner on a “DK” sticker for the tailgate of the car (because the car is so old it predates the EU number plates that include the country code) and 70 kroner for some headlight stickers which prevent full beam headlamps from dazzling oncoming drivers when you are driving on the left in the UK.

As I busily fixed them onto my car as we waited to disembark the ferry, however, a lorry driver parked next to us said these were, in fact, entirely unnecessary.

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