There are costs and benefits to car use. The costs of car usage include the cost of: acquiring the vehicle, interest payments (if the car is financed), repairs and auto maintenance, fuel, depreciation, driving time, parking fees, taxes, and insurance.^[5] The costs to society of car use include: maintaining roads, land use, road congestion, air pollution, public health, health care, and disposing of the vehicle at the end of its life. Road traffic accidents are the largest cause of injury-related deaths worldwide.^[6]

The benefits may include on-demand transportation, mobility, independence, and convenience.^[7] The societal benefits may include: economic benefits, such as job and wealth creation from car production, sales and maintenance, transportation provision, society well-being derived from leisure and travel opportunities, and revenue generation from the tax opportunities. The ability for humans to move flexibly from place to place has far-reaching implications for the nature of societies.^[8] It was estimated in 2010 that the number of cars had risen to over 1 billion vehicles, up from the 500 million of 1986.^[9] The numbers are increasing rapidly, especially in China, India and other newly industrialized countries.^[10]

Cugnot's 1771 fardier à vapeur, as preserved at the Musée des Arts et Métiers, Paris

Nicolas-Joseph Cugnot is widely credited with building the first full-scale, self-propelled mechanical vehicle or car in about 1769; he created a steam-powered tricycle.^[23] He also constructed two steam tractors for the French Army, one of which is preserved in the French National Conservatory of Arts and Crafts.^[24] His inventions were, however, handicapped by problems with water supply and maintaining steam pressure.^[24] In 1801, Richard Trevithick built and demonstrated his Puffing Devil road locomotive, believed by many to be the first demonstration of a steam-powered road vehicle. It was unable to maintain sufficient steam pressure for long periods, and was of little practical use.

The development of external combustion engines is detailed as part of the history of the car, but often treated separately from the development of true cars. A variety of steam-powered road vehicles were used during the first part of the 19th century, including steam cars, steam buses, phaetons, and steam rollers. Sentiment against them led to the Locomotive Acts of 1865.

In 1807, Nicéphore Niépce and his brother Claude created what was probably the world's first internal combustion engine (which they called a Pyréolophore), but they chose to install it in a boat on the river Saone in France.^[25] Coincidentally, in 1807 the Swiss inventor François Isaac de Rivaz designed his own 'de Rivaz internal combustion engine' and used it to develop the world's first vehicle to be powered by such an engine. The Niépces' Pyréolophore was fuelled by a mixture of Lycopodium powder (dried spores of the Lycopodium plant), finely crushed coal dust and resin that were mixed with oil, whereas de Rivaz used a mixture of hydrogen and oxygen.^[25] Neither design was very successful, as was the case with others, such as Samuel Brown, Samuel Morey, and Etienne Lenoir with his hippomobile, who each produced vehicles (usually adapted carriages or carts) powered by internal combustion engines.^[1]

Gustave Trouvé's tricycle, the first ever electric automobile to be shown in public

In November 1881, French inventor Gustave Trouvé demonstrated the first working (three-wheeled) car powered by electricity at the International Exposition of Electricity, Paris.^[26]

Karl Benz, the inventor of the modern car

Although several other German engineers (including Gottlieb Daimler, Wilhelm Maybach, and Siegfried Marcus) were working on the problem at about the same time, Karl Benz generally is acknowledged as the inventor of the modern car.^[1]

A photograph of the original Benz Patent-Motorwagen, first built in 1885 and awarded the patent for the concept

In 1879, Benz was granted a patent for his first engine, which had been designed in 1878. Many of his other inventions made the use of the internal combustion engine feasible for powering a vehicle. His first Motorwagen was built in 1885 in Mannheim, Germany. He was awarded the patent for its invention as of his application on 29 January 1886 (under the auspices of his major company, Benz & Cie., which was founded in 1883). Benz began promotion of the vehicle on 3 July 1886, and about 25 Benz vehicles were sold between 1888 and 1893, when his first four-wheeler was introduced along with a model intended for affordability. They also were powered with four-stroke engines of his own design. Emile Roger of France, already producing Benz engines under license, now added the Benz car to his line of products. Because France was more open to the early cars, initially more were built and sold in France through Roger than Benz sold in Germany. In August 1888 Bertha Benz, the wife of Karl Benz, undertook the first road trip by car, to prove the road-worthiness of her husband's invention.

Bertha Benz, the first long distance car driver in the world

In 1896, Benz designed and patented the first internal-combustion flat engine, called boxermotor. During the last years of the nineteenth century, Benz was the largest car company in the world with 572 units produced in 1899 and, because of its size, Benz & Cie., became a joint-stock company.

The first motor car in central Europe and one of the first factory-made cars in the world, was produced by Czech company Nesselsdorfer Wagenbau (later renamed to Tatra) in 1897, the Präsident automobil.

Daimler and Maybach founded Daimler Motoren Gesellschaft (DMG) in Cannstatt in 1890, and sold their first car in 1892 under the brand name Daimler. It was a horse-drawn stagecoach built by another manufacturer, which they retrofitted with an engine of their design. By 1895 about 30 vehicles had been built by Daimler and Maybach, either at the Daimler works or in the Hotel Hermann, where they set up shop after disputes with their backers. Benz, Maybach and the Daimler team seem to have been unaware of each other's early work. They never worked together; by the time of the merger of the two companies, Daimler and Maybach were no longer part of DMG.

Daimler died in 1900 and later that year, Maybach designed an engine named Daimler-Mercedes that was placed in a specially ordered model built to specifications set by Emil Jellinek. This was a production of a small number of vehicles for Jellinek to race and market in his country. Two years later, in 1902, a new model DMG car was produced and the model was named Mercedes after the Maybach engine, which generated 35 hp. Maybach quit DMG shortly thereafter and opened a business of his own. Rights to the Daimler brand name were sold to other manufacturers.

Karl Benz proposed co-operation between DMG and Benz & Cie. when economic conditions began to deteriorate in Germany following the First World War, but the directors of DMG refused to consider it initially. Negotiations between the two companies resumed several years later when these conditions worsened and, in 1924 they signed an Agreement of Mutual Interest, valid until the year 2000. Both enterprises standardized design, production, purchasing, and sales and they advertised or marketed their car models jointly, although keeping their respective brands. On 28 June 1926, Benz & Cie. and DMG finally merged as the Daimler-Benz company, baptizing all of its cars Mercedes Benz, as a brand honoring the most important model of the DMG cars, the Maybach design later referred to as the 1902 Mercedes-35 hp, along with the Benz name. Karl Benz remained a member of the board of directors of Daimler-Benz until his death in 1929, and at times his two sons also participated in the management of the company.

Émile Levassor

Armand Peugeot

In 1890, Émile Levassor and Armand Peugeot of France began producing vehicles with Daimler engines, and so laid the foundation of the automotive industry in France. In 1891, Auguste Doriot and his Peugeot colleague Louis Rigoulot completed the longest trip by a gasoline-powered vehicle when their self-designed and built Daimler powered Peugeot Type 3 completed 2,100 km (1,300 miles) from Valentigney to Paris and Brest and back again. They were attached to the first Paris–Brest–Paris bicycle race, but finished 6 days after the winning cyclist, Charles Terront.

The first design for an American car with a gasoline internal combustion engine was made in 1877 by George Selden of Rochester, New York. Selden applied for a patent for a car in 1879, but the patent application expired because the vehicle was never built. After a delay of sixteen years and a series of attachments to his application, on 5 November 1895, Selden was granted a United States patent (U.S. Patent 549,160) for a two-stroke car engine, which hindered, more than encouraged, development of cars in the United States. His patent was challenged by Henry Ford and others, and overturned in 1911.

In 1893, the first running, gasoline-powered American car was built and road-tested by the Duryea brothers of Springfield, Massachusetts. The first public run of the Duryea Motor Wagon took place on 21 September 1893, on Taylor Street in Metro Center Springfield.^[27][28] The Studebaker Automobile Company, subsidiary of a long-established wagon and coach manufacturer, started to build cars in 1897^[29]:p.66 and commenced sales of electric vehicles in 1902 and gasoline vehicles in 1904.^[30]

In Britain, there had been several attempts to build steam cars with varying degrees of success, with Thomas Rickett even attempting a production run in 1860.^[31] Santler from Malvern is recognized by the Veteran Car Club of Great Britain as having made the first gasoline-powered car in the country in 1894,^[32] followed by Frederick William Lanchester in 1895, but these were both one-offs.^[32] The first production vehicles in Great Britain came from the Daimler Company, a company founded by Harry J. Lawson in 1896, after purchasing the right to use the name of the engines. Lawson's company made its first car in 1897, and they bore the name Daimler.^[32]

In 1892, German engineer Rudolf Diesel was granted a patent for a "New Rational Combustion Engine". In 1897, he built the first diesel engine.^[1] Steam-, electric-, and gasoline-powered vehicles competed for decades, with gasoline internal combustion engines achieving dominance in the 1910s.

Although various pistonless rotary engine designs have attempted to compete with the conventional piston and crankshaft design, only Mazda's version of the Wankel engine has had more than very limited success.