True Cost of Car Calculator
The sticker price is only a fraction of what you'll actually spend. Add up loan interest, depreciation, fuel, insurance, maintenance, and fees to see the real five-year cost of owning a car.
Total 5-year cost
$49,269
The sticker price is only 71% of what you'll actually spend. Monthly equivalent: $821/month.
Depreciation
$19,470
Loan interest
$4,799
Fuel total
$7,000
Insurance total
$7,500
Maintenance total
$4,000
Monthly equivalent
$821
- Depreciation is computed as
purchasePrice × (1 − annualRate)^years(compound declining balance). New cars typically depreciate 15–25% per year in the first few years; used cars 10–15%. - Loan interest is total interest paid over
min(ownershipYears × 12, loanTerm)months. If you sell before the loan ends, the remaining principal is netted against the sale price — this tool doesn't model a sale. - Insurance, maintenance, and fees are assumed constant per year. In reality, maintenance rises with age (older cars cost more to repair) and insurance may drop over time.
- Total cost includes the down payment, loan interest, depreciation, fuel, insurance, maintenance, and fees. It does not include the return of the down payment via resale — this is the net economic cost, not gross.
- Fuel cost =
(annualMiles / MPG) × pricePerGallon × years. Gas prices and MPG are assumed constant.
What you really pay for a car
Most people look at a car's monthly payment when deciding affordability. But the true cost of car ownership is much broader: it includes depreciation (the biggest cost for new cars), fuel, insurance, maintenance and repairs, registration fees, and financing interest. Over five years, these costs can total 1.5–2× the purchase price of a new car.
Depreciation alone — the loss in resale value — typically costs $2,000–$3,000 per year for a new car. Combined with fuel, insurance, and maintenance, owning a $35,000 new car for five years can cost $30,000–$40,000 total. A comparable used car might cost half that over the same period, which is why buying used is consistently the smartest car-buying strategy.
Why it matters to your money
Cars are typically the second-largest expense after housing. A $500/month car payment isn't just $500 — when you add insurance, fuel, and depreciation, the total cost could be $700–$800 per month. Understanding the full cost helps you set a realistic total car budget and avoid "payment shock" — the surprise of seeing what a car actually costs beyond the monthly payment.
This calculator shows the year-by-year breakdown so you can see how costs shift over time: depreciation is highest in the early years, while maintenance and fuel become a larger share as the car ages.
Rules of thumb
- New cars lose 60% of value in 5 years: This is why buying 2–3 year old cars is the single best money move in car ownership. You let the first owner absorb the steepest depreciation.
- Total car budget: Many financial advisors suggest keeping total vehicle costs (payment, insurance, fuel, maintenance) below 15–20% of gross income.
- Reliability matters: A $500/month cheaper car with poor reliability can cost more over 5 years in repairs and lower resale value. Toyota, Honda, and some Lexus models consistently have the lowest total cost of ownership.
Frequently asked questions
- What is the true total cost of owning a car?
- The true cost includes: the purchase price, financing interest, insurance, fuel, maintenance and repairs, registration fees, and depreciation (the largest component for new cars). New cars can cost $10,000–$15,000 per year to own and operate.
- How much do cars depreciate?
- New cars typically lose 15–25% of their value in the first year and 50–60% over the first five years. This makes buying a 2–3 year old used car one of the most effective ways to reduce the true cost of car ownership.
- How does car choice affect total cost of ownership?
- Dramatically. Reliable brands like Toyota and Honda have significantly lower maintenance costs and better resale values than less reliable brands. A cheaper car with higher repair costs often ends up costing more over 5 years than a slightly more expensive reliable one.