How to use the car ownership cost calculator
- Enter the purchase price, the sales tax and fees, your down payment, the loan rate and term. Use a rate of 0 and a down payment equal to the total for a cash purchase.
- Enter how many years you will keep the car and the resale value you expect at the end.
- Add miles per year, fuel economy, fuel price, insurance, maintenance per mile and registration costs.
- Read the total, the yearly, monthly and per mile cost and the table of where the money goes.
Formula
Depreciation = purchase price - resale value
Loan interest = interest in the payments made during your years of ownership
Fuel = miles per year x years / mpg x price per gallon
Maintenance = cost per mile x miles per year x years
Total = depreciation + tax and fees + interest + fuel + insurance + maintenance + registration
Any loan balance left when you sell is paid from the sale and is not counted as a cost, since the resale value already reflects it.
Worked example
A $32,000 car with 7% tax ($2,240), $5,000 down and a loan at 7% for 60 months has a payment of $578.99 and $5,499.13 in interest. Kept for 5 years and sold for $16,000, depreciation is $16,000.
Fuel at 12,000 miles a year, 28 mpg and $3.50 a gallon is $7,500, insurance is $9,000, maintenance at $0.10 a mile is $6,000 and registration is $1,000. The total is $47,239.13, or $787.32 a month and $0.787 a mile.
Depreciation is usually the biggest cost
The drop in value between buying and selling often outweighs fuel or insurance, and it is easy to ignore because no bill arrives. A realistic resale value matters more than any other number here, so check listings for similar cars with the age and mileage yours will have. The car depreciation calculator can help estimate it.
Compare cars, not just payments
A cheaper car with poor fuel economy or high insurance can cost more overall. Run the same inputs for each car you are considering and compare the per mile and yearly totals. Pair this with the car payment calculator for financing and the lease versus buy calculator if you are weighing a lease.
Costs change as a car ages
Maintenance rises with age and mileage, and insurance usually falls as the car loses value. A single per mile rate is a simplification. If you have records from a similar car, use those figures instead of the example rate.
Assumptions and limits
- Resale value, the maintenance rate per mile, insurance, tax and fuel price are examples you can edit, not published averages.
- Insurance, registration and maintenance are the same each year.
- Interest is counted only for the months you own the car. Sales tax and fees are paid once.
- Tolls, parking beyond the registration box, repairs beyond the per mile rate and any tax deductions are not modeled.
Frequently asked questions
How do I calculate the total cost of owning a car?
Add depreciation, interest, fuel, insurance, maintenance, taxes and fees over the time you keep the car. Divide by the years or miles for a yearly or per mile cost.
What is the cost per mile of owning a car?
It is the total cost of ownership divided by the miles driven. In the worked example, $47,239.13 over 60,000 miles is about 79 cents a mile.
Why is depreciation counted instead of the full price?
You get most of the price back when you sell, so only the loss in value is a cost of ownership. Counting the full price as well would double count.
Does an electric car change the inputs?
You can still use this tool. Replace the fuel line by converting your electricity cost to an equivalent per mile or per gallon figure, and adjust maintenance and insurance to your own quotes.