Wir fahren mit unserem Auto zum Bahnhof.

Fahren is used because the sentence is about traveling by vehicle. In this case, the vehicle is unserem Auto.

• fahren = to go/travel/drive by vehicle
• gehen = to go on foot / to walk

So Wir fahren zum Bahnhof means we’re going to the train station by some means of transport, and the rest of the sentence tells us it is by our car.

It can mean either, depending on context.

In Wir fahren mit unserem Auto zum Bahnhof, the most natural English translation is often We’re driving to the train station in our car or We’re going to the train station by car.

Important detail:

• fahren does not always mean that the subject is personally driving.
• It can simply mean to travel by vehicle.

So this sentence does not guarantee that we are the ones operating the car. It just says the trip is happening using our car.

Because mit always takes the dative case, and unserem Auto is dative.

Here is the structure:

• mit
  • dative
• das Auto is a neuter noun
• dative singular neuter with unser- becomes unserem

So:

• nominative: unser Auto
• dative: mit unserem Auto

That -em ending is the key dative ending here.

Because Bahnhof needs an article here, and zum is a contraction of zu dem.

• zu = to
• dem = the (dative masculine/neuter)
• zu dem → zum

Since Bahnhof is masculine:

• der Bahnhof = the train station
• with zu it becomes zu dem Bahnhof
• and that is normally shortened to zum Bahnhof

So zum Bahnhof means to the train station.

Because zu also takes the dative case.

So both prepositions in the sentence use dative:

• mit unserem Auto
• zum Bahnhof = zu dem Bahnhof

Since Bahnhof is masculine:

• nominative: der Bahnhof
• dative: dem Bahnhof

That is why you get zu dem Bahnhof → zum Bahnhof.

Literally, mit unserem Auto is with our car, but in natural English it usually means by car or in our car.

In this sentence, it expresses the means of transport:

• Wir fahren mit unserem Auto = We’re going by our car / in our car

German often uses mit to show what you travel by:

• mit dem Zug = by train
• mit dem Bus = by bus
• mit dem Auto = by car

So although with our car is the literal breakdown, it is better understood as using our car to get there.

Yes, unserem Auto is the German equivalent of our car, but the form of our changes depending on the case.

The base word is unser = our.

Because Auto is:

• singular
• neuter
• in the dative case after mit

the form becomes unserem.

So:

• unser Auto = our car
• mit unserem Auto = with/in/by our car

English does not change our, but German does.

This is normal German word order for a main clause.

Basic pattern:

• Wir = subject
• fahren = conjugated verb
• then the other information follows

So:

• Wir = we
• fahren = travel/go/drive
• mit unserem Auto = by our car
• zum Bahnhof = to the train station

German main clauses usually put the conjugated verb in second position. That rule is being followed here:

• Position 1: Wir
• Position 2: fahren

The rest of the sentence is quite flexible, but this version sounds very natural.

Yes, that is grammatically possible, but it sounds a bit different.

• Wir fahren mit unserem Auto zum Bahnhof is the most neutral version.
• Wir fahren zum Bahnhof mit unserem Auto can put slightly more focus on mit unserem Auto, especially if you are contrasting it with another way of traveling.

For example:

• Wir fahren zum Bahnhof mit unserem Auto, nicht mit dem Bus.

So your original sentence is the best default version.

Yes. Wir fahren is present tense, but in German the present tense is often used for both:

• we drive
• we are driving
• we’re going

The exact English translation depends on context.

So this sentence could mean:

• We drive to the train station in our car (habitual)
• We are driving to the train station in our car (right now / current plan)
• We’re going to the train station by our car (less natural English, but similar idea)

Very often, context tells you which one is meant.

They are capitalized for different reasons.

• Wir is capitalized because it is the first word of the sentence.
• Auto is capitalized because all nouns are capitalized in German.

So in this sentence:

• Wir = capitalized as sentence-initial word
• Auto and Bahnhof = capitalized because they are nouns

This is one of the most noticeable spelling differences between German and English.

Yes, Bahnhof is one word, and it is a compound noun.

It is made from:

• Bahn = rail / railway
• Hof = yard / court

Historically, the literal parts are not so important for everyday learners. You should simply learn der Bahnhof as meaning train station or railway station.

German creates many nouns by combining smaller words, and Bahnhof is a very common example.

Yes, but the meaning shifts slightly.

• mit unserem Auto emphasizes the means of transport: by/in our car
• in unserem Auto emphasizes the physical location: inside our car

Compare:

• Wir fahren mit unserem Auto zum Bahnhof. = We’re going to the station by our car.
• Wir fahren in unserem Auto zum Bahnhof. = We’re going to the station in our car.

Both can work, but mit unserem Auto is more standard when talking about how you are traveling.