Cost Calculator AI
Cars & Vehicles5-Year TCO Model

True Cost of Car Ownership Calculator

Calculate the true 5-year financial cost of owning a vehicle, including depreciation, financing interest, fuel, auto insurance, and regular maintenance.

Vehicle Inputs

Popular Vehicle Presets:
Currency:
$
%
12,000 miles/year
MPG
$
$
$
5-YEAR TOTAL COST TO OWN
$38,420

Includes depreciation, financing, fuel, insurance, & upkeep.

Monthly Avg$640
Cost Per Mile$0.64
Cost Distribution42% Depreciation
Vehicle Depreciation (45%)
$15,750
Fuel (60,000 miles)
$7,500
Auto Insurance
$8,250
Maintenance & Tires
$4,500
Loan Financing Interest
$2,420

5-Year Total Cost of Ownership Formula

Total Cost to Own = Depreciation Loss + Loan Financing Interest + 5-Year Fuel + 5-Year Insurance + 5-Year Maintenance & Repairs
  • Depreciation: The decline in vehicle market value over 5 years (typically 40% to 50% for new vehicles).
  • Financing Interest: Cumulative interest charges paid over the auto loan repayment period.
  • Fuel Expense: (Annual Mileage / Fuel Economy MPG) ร— Fuel Price ร— 5 Years.
  • Auto Insurance: 5 years of comprehensive, collision, and liability premiums.
  • Maintenance: Scheduled maintenance, oil changes, tire rotations, brake pads, and wear-and-tear repairs.

Step-by-Step Worked Example

Scenario: Calculating the 5-year cost of owning a $35,000 midsize SUV driven 12,000 miles per year

Calculation Steps:

  1. 5-Year Depreciation (45%) = $15,750 loss in resale value
  2. Total Loan Interest = $5,218 paid over 5 years
  3. 5-Year Fuel Cost = (12,000 miles / 28 MPG) ร— $3.50 ร— 5 = $7,500
  4. 5-Year Insurance & Maintenance = ($1,650 + $900) ร— 5 = $12,750
  5. Total 5-Year Ownership Cost = $15,750 + $5,218 + $7,500 + $12,750 = $41,218
Result: The vehicle costs $41,218 over 5 years, which equals $687 per month or $0.69 per mile driven.

How to Use This Calculator

  1. 1Enter the vehicle sticker or negotiated purchase price.
  2. 2Input your planned down payment and loan term length.
  3. 3Set your anticipated annual driving mileage and average fuel price.
  4. 4Review insurance and maintenance allowances, then examine the cost per mile and monthly cost.

Assumptions & Limitations

  • Assumes an average 5-year depreciation rate of 45%, based on historical automotive data from Edmunds and Kelley Blue Book.
  • Fuel calculations assume steady-state fuel economy matching EPA combined ratings.
  • Does not factor in unexpected major mechanical failures covered by manufacturer warranties.

Frequently Asked Questions

What is the single biggest cost of owning a car?

Depreciation is by far the largest single expense for new car owners, often accounting for 40% to 50% of total 5-year costsโ€”exceeding fuel and insurance combined.

How do I calculate cost per mile?

Divide total 5-year ownership costs (depreciation, financing, gas, insurance, and repairs) by total miles driven over those 5 years. For an average US car, cost per mile is typically between $0.55 and $0.75.

Does buying used save money on total cost to own?

Yes. Because the steepest depreciation occurs in the first 2 to 3 years, purchasing a gently used 3-year-old vehicle can reduce 5-year ownership costs by 30% to 40%.

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