Caro vs. costoso

The Italian words 'caro' and 'costoso' both mean 'expensive' or 'costly', but they have subtle differences in usage and connotation.

Caro

'Caro' is more commonly used in everyday language and can also mean 'dear' in the sense of affection. It often implies an emotional or subjective perception of high cost.
Questo ristorante è troppo caro per me.
(This restaurant is too expensive for me.)
La vita a New York è cara.
(Life in New York is expensive.)
Mio caro amico, come stai?
(My dear friend, how are you?)

Costoso

'Costoso' is more formal and objective, often used to describe high-priced items or services without emotional connotation. It's frequently used in business or technical contexts.
L'acquisto di questa macchina è molto costoso.
(The purchase of this machine is very costly.)
Il progetto si è rivelato più costoso del previsto.
(The project turned out to be more expensive than expected.)
I diamanti sono sempre costosi.
(Diamonds are always expensive.)

Summary

While 'caro' is more versatile and can express both cost and affection, 'costoso' is specifically used for high prices or costs. 'Caro' is more common in everyday speech, while 'costoso' is often found in more formal or professional contexts.