The difference in price between a new and a used car is usually the only figure buyers actually compare. However, that figure says very little about how much the vehicle costs you while you own and drive it. The new or used vehicle dilemma can only be resolved once you add up taxes, fuel, servicing and repairs over several years.
In Montenegro, this calculation also has its own local specifics. The annual tax is calculated according to engine capacity rather than the value of the car, while the vehicle’s age provides only a limited reduction. As a result, the same amount of money spent on two different cars leads to significantly different monthly costs, which we will examine below.
What Are the Total Costs of Vehicle Ownership?
Before making any comparison, it is worth clarifying exactly what is being measured. The total cost of vehicle ownership is the sum of everything a car costs from the day it is purchased until the day it is sold, divided by the number of years it is used. Only then can the new or used vehicle dilemma be resolved with figures rather than impressions.
Which Items Are Included in the Total Cost of Ownership?
The calculation includes seven items, and none of them should be omitted:
- Purchase price or the monthly instalment if the vehicle is bought on finance
- Depreciation, calculated as the difference between the purchase and resale prices
- Fuel or electricity, based on the actual annual mileage
- Vehicle use tax and registration, paid every year
- Insurance, both mandatory and comprehensive if you choose it
- Regular maintenance, meaning the service intervals prescribed by the manufacturer
- Unplanned repairs, the only item you cannot predict
You know the first four expenses in advance. The final three determine whether the car will cost as much as you planned.
Why Does the Purchase Price Not Show How Much a Vehicle Costs?
Because the purchase price is a one-off expense, while everything else recurs every year. A difference of €5,000 seems significant until you spread it over five years of ownership. It then becomes €1,000 per year, and one major fault on an older car can consume a large portion of that amount.
The saving therefore slowly turns into an expense, usually without the owner noticing the tipping point. That is why we suggest writing down the seven items from the list above before purchasing and completing them for both vehicles you are comparing.
New or Used Vehicle: Where Does the Real Difference in Costs Arise?
When the seven items from the previous list are placed side by side, the picture becomes clear quite quickly. The difference does not arise where buyers usually look for it, namely in the price on paper, but in how predictable each expense is.
Item | New Vehicle | Used Vehicle Aged 10 or More Years |
Purchase price | Higher | Significantly lower |
Cost predictability | High, known in advance | Low, depends on the vehicle’s condition |
Warranty | Included | Not included |
Service intervals | Prescribed and known in advance | Depend on the previous owner |
Risk of a major fault | Low, covered by the warranty | High, borne entirely by the buyer |
Availability of parts | Through the authorised network | Uncertain for discontinued models |
Emissions standard | Euro 6 | Usually Euro 4 |
How Do Costs Develop Over Five Years?
With a new car, the largest single expense is depreciation, but it has one important characteristic. You know it is coming, you know approximately how much it will be and you can include it in your calculations before signing the paperwork.
With an older vehicle, the situation is reversed. Repairs are the largest expense, and they arise without warning, usually when you need the car most. That is why two owners of the same model can have completely different annual costs.
What Does the Warranty Actually Cover?
The warranty is the only item in the entire calculation that cannot be purchased additionally with a used vehicle. Its essence is not the repair itself, but the fact that the risk of a fault is transferred from the buyer to the manufacturer. This is often where the new or used vehicle dilemma is ultimately resolved.
Vehicles from our range come with an eight-year factory warranty, supported by complete after-sales service. The authorised service centre operates in Donja Gorica, with certified mechanics for Dongfeng, Voyah and BAIC, diagnostic equipment that meets factory standards and original parts supplied through the Plan-net avto distribution network in Ljubljana.
How Much Do Taxes and Registration Cost for Used Vehicles in Montenegro?
So far, we have discussed costs that depend on the condition of the car. The next group of expenses depends solely on regulations, so it is worth knowing them before you even go to view a vehicle.
How Much Is the Annual Tax on the Use of Passenger Motor Vehicles?
This tax is paid every year during registration and is calculated exclusively according to engine capacity. As prescribed by the Law on Tax on the Use of Passenger Motor Vehicles, Vessels, Aircraft and Other Flying Vehicles, the amounts are as follows:
Capacity Engine | Annual Tax |
| up to 1,300 cm³ | 25 € |
| over 1,300 to 1,600 cm³ | 40 € |
| over 1,600 to 2,000 cm³ | 75 € |
| over 2,000 to 2,500 cm³ | 220 € |
| over 2,500 to 3,000 cm³ | 500 € |
| over 3,000 to 4,000 cm³ | 750 € |
| over 4,000 to 5,000 cm³ | 1.000 € |
| over 5,000 cm³ | 1.500 € |
The vehicle’s age provides a reduction of 5% for each completed year, but the total reduction cannot exceed 50% of the prescribed amount. In other words, even the oldest car pays at least half of the amount, and registration cannot be completed without proof that the tax has been paid.
Which Other Taxes and Fees Are Paid When Buying a Used Vehicle?
When purchasing a used vehicle, a tax of 5% of its market value is payable, and the buyer is liable for it. The market value is determined by the competent tax authority, so the amount stated in the contract is not always the amount used to calculate the tax. If you import the vehicle, VAT at the standard rate of 21% is also added.
The remaining expenses are the vehicle inspection and mandatory motor third-party liability insurance, whose price depends on the engine power and the driver’s premium class. It is also worth knowing that used vehicles must meet at least the Euro 4 standard when imported, while Euro 6 is prescribed for new vehicles. Once you add all of this up, the question of a new or used vehicle receives a much more specific answer.
Why Do Electric Vehicles Completely Change This Calculation?
The table in the previous section has one exception that changes the entire calculation. This exception is related neither to the vehicle’s age nor to its engine capacity, but to its type of powertrain.
Which Vehicles Are Exempt from Vehicle Use Tax?
The same law that prescribes the amounts based on engine capacity also lists the vehicles exempt from this tax in Article 6. These include electric motor vehicles, which means zero euros for this expense every year.
The difference is specific. The owner of a used car with a 2,000 cm³ engine pays €75 per year, while someone with a 2,500 cm³ engine pays up to €220. Meanwhile, the owner of an electric vehicle pays nothing on the same basis. That is why the new or used vehicle dilemma looks different for electric models than it does for conventional cars.
Where Else Can You Save with an Electric Vehicle?
The savings continue with servicing because an electric powertrain has significantly fewer moving parts. There is no oil, filters or clutch, while the brakes last longer because regenerative braking handles part of the deceleration.
The electric vehicles in A-Drive’s range include the Dongfeng Box, Voyah Free and Voyah Courage. If you are considering switching, we suggest reviewing the charging network in Montenegro before making a decision, because your daily charging routine affects how well an electric vehicle will actually suit you.
When Is a Used Vehicle Worth Buying, and When Is a New One the Better Choice?
The answer depends on how much you drive and how important it is for you to know your monthly costs in advance. The more kilometres you drive annually, the faster the difference in total vehicle ownership costs works in favour of a new car.
Who Does a Used Vehicle Still Make Sense For?
A used car remains a reasonable option when it is the household’s second vehicle, covers low annual mileage and has a small-capacity engine that results in a lower annual tax. The condition is a known service history, meaning a vehicle with documented maintenance rather than simply a low number on the odometer.
Outside these circumstances, the advantage quickly diminishes. Montenegro has an additional problem when it comes to used vehicles because the average car on our roads is almost eighteen years old, so the selection of genuinely sound vehicles is narrower than advertisements suggest.
When Does a New Vehicle Become More Cost-Effective?
A new vehicle is cost-effective for anyone who drives more than 15,000 kilometres per year or uses the car for business purposes. Every saving on fuel and servicing is multiplied by the number of kilometres driven, while the warranty removes the greatest uncertainty from the budget.
A final practical tip: before deciding between a new or used vehicle, add up how much you have spent on unplanned repairs over the past three years. That amount is the best indicator of how much delaying the purchase of a new car is actually costing you.
How Can You Calculate the Total Cost of Ownership Yourself?
Everything we have broken down into individual expenses so far can be reduced to a single figure, and that figure tells you more than any advertisement. You will need a sheet of paper, a calculator and an honest estimate of your annual mileage.
The Calculation in Four Steps
- Add up the initial costs. The purchase price, the 5% transfer tax and registration costs make up the amount you pay before driving even a single kilometre.
- Calculate the energy cost. Multiply your annual mileage by the average cost of fuel or electricity per 100 kilometres, then multiply that amount by five years.
- Add the annual expenses. These include vehicle use tax based on engine capacity, insurance and regular servicing, again over a five-year period.
- Subtract the residual value. Estimate how much the vehicle will be worth after five years and subtract that amount from the total, because this is the money you will recover by selling it.
Divide the result by sixty to get the actual monthly cost. Do this for both cars you are comparing, and the new or used vehicle dilemma is no longer a matter of estimation.
One note regarding the third step: with older vehicles, always include a reserve for unplanned repairs because, without it, the calculation appears more favourable than it actually is.
New or Used Vehicle: What Ultimately Determines the Decision
Now that we have covered all the expenses, it is clear that the decision is determined not by price but by predictability. A used car leaves money in your pocket on the first day, and then takes it back through tax based on engine capacity, servicing and repairs that arrive without warning. A new vehicle requires that money immediately, but in return gives you an eight-year warranty, known service intervals and a calculation you can prepare in advance.
If you want to see what that calculation looks like for a specific model, the quickest way is to compare it in person. The A-Drive team at the showroom at 5 Zlate Raičević Street in Podgorica is available for a test drive and all information about the warranty, servicing and maintenance costs, because the new or used vehicle dilemma is easiest to resolve when you have real figures in front of you.
Frequently asked questions
How Much Is the Annual Vehicle Use Tax in Montenegro?
The tax depends exclusively on engine capacity and ranges from €25 for vehicles up to 1,300 cm³ to €1,500 for those over 5,000 cm³. It is paid every year during registration.
Does an Older Vehicle Pay Less Tax?
Yes, but only up to a certain limit. The tax is reduced by 5% for each completed year of the vehicle’s age, although the total reduction cannot exceed half of the prescribed amount.
Do Electric Vehicles Pay Vehicle Use Tax?
No. The law exempts electric motor vehicles from this tax, so the owner of an electric car has no annual expense under this item.
What Costs Does a Buyer Pay When Purchasing a Used Car?
The buyer pays a used motor vehicle transfer tax of 5% of the market value and, in the case of an imported vehicle, VAT of 21%. Vehicle inspection, registration and mandatory insurance are added to this. When it comes to used vehicles, Montenegro also requires imported cars to meet at least the Euro 4 standard.
New or Used Vehicle: Which Is More Cost-Effective in the Long Run?
The cost-effectiveness of a new or used vehicle depends on how much you drive. If you cover more than 15,000 kilometres annually, a new vehicle recoups the investment more quickly through lower fuel consumption, a warranty and service costs known in advance. A used car remains a reasonable option only with low mileage and a documented service history.
