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Total Cost of Ownership
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Annual Cost
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Monthly Cost
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Calculate the true annual and total cost of owning a car, beyond just the monthly payment.
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Annual Cost
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Monthly Cost
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Add monthly loan/lease payment, insurance, and fuel (annualized), plus annual maintenance and depreciation, then multiply by the number of years you plan to own the car.
Total Cost = [(Payment+Insurance+Fuel)×12 + Maintenance + Depreciation] × Years
The loan or lease payment is often the only number people focus on when budgeting for a car, but it's just one piece of the actual cost. Insurance, fuel, maintenance, and depreciation combined often exceed the payment itself over the life of ownership, which is why two cars with similar monthly payments can have very different true costs.
Depreciation, the decline in a vehicle's resale value over time, is a genuine economic cost even if you never plan to sell the car, since it represents wealth that's being lost year over year. Some vehicles depreciate much faster than others; comparing depreciation curves across models under consideration is one of the more powerful ways to identify a genuinely cheaper car to own, even if the sticker price or payment looks similar.
Newer cars under warranty typically have low maintenance costs, but as a vehicle ages and accumulates mileage, routine maintenance and the likelihood of larger repairs both increase. Budgeting a rising maintenance estimate for older vehicles, rather than a flat figure carried over from a newer car's history, gives a more realistic multi-year total cost picture.
This calculator is particularly useful for comparing two specific vehicles you're considering, since it captures the full financial picture rather than just the payment. A car with a lower payment but higher insurance, worse fuel economy, and faster depreciation can easily cost more overall than one with a higher payment but better numbers elsewhere.
Total cost of ownership includes the loan or lease payment, insurance, fuel, routine maintenance and repairs, registration and taxes, and depreciation, the loss in the vehicle's resale value over time.
Depreciation is a real economic cost even if you keep the car, since it represents wealth lost through the vehicle's declining value. Comparing depreciation across models is one of the most useful ways to evaluate which car is genuinely cheaper to own over time.
Maintenance costs vary widely by make, model, age, and mileage, but budgeting a few hundred to over a thousand dollars per year for routine maintenance and unplanned repairs is a reasonable general planning range.
Compare leasing vs buying with the Lease vs Buy Calculator, or check your monthly payment with the Loan EMI Calculator.
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