Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A car costs far more than its sticker price, and ownership cost adds every piece. For a $42,000 vehicle kept five years with a $22,000 resale, depreciation is $20,000, financing interest $6,000, fuel $11,000, insurance $9,000, maintenance $6,000 and taxes and fees $3,500. The total is about $55,500, or $925 a month. Depreciation alone is about 36 percent of that, the largest piece, and it never appears on a bill.
Before you rely on it
What to check
Use the same ownership horizon for every car you compare. A cheaper car that must be replaced sooner can cost more per year than a pricier one kept longer.
The common error
Where people go wrong with vehicle total cost of ownership calculator
Comparing purchase prices only. Fuel, insurance and maintenance differ between models and can outweigh a price gap over several years.
Sensitivity evidence
How vehicle purchase price changes the total cost of ownership
| Vehicle purchase price | Total cost of ownership | Average monthly ownership cost | Depreciation cost |
|---|---|---|---|
| $33,600 | $47,100 | $785 | $11,600 |
| $37,800 | $51,300 | $855 | $15,800 |
| $42,000worked example | $55,500 | $925 | $20,000 |
| $46,200 | $59,700 | $995 | $24,200 |
| $50,400 | $63,900 | $1,065 | $28,400 |
Every input, tested
Which input moves the total cost of ownership most
| Input | Tested from | To | Total cost of ownership at each end | Swing |
|---|---|---|---|---|
| Ownership years | 4.0 years | 6.0 years | $50,300 to $60,700 | $10,400 (19%) |
| Vehicle purchase price | $37,800 | $46,200 | $51,300 to $59,700 | $8,400 (15%) |
| Expected resale value | $19,800 | $24,200 | $57,700 to $53,300 | $4,400 (7.9%) |
| Annual fuel or energy cost | $1,980 | $2,420 | $54,400 to $56,600 | $2,200 (4.0%) |
| Annual insurance | $1,620 | $1,980 | $54,600 to $56,400 | $1,800 (3.2%) |
| Total financing interest | $5,400 | $6,600 | $54,900 to $56,100 | $1,200 (2.2%) |
| Annual maintenance and repairs | $1,080 | $1,320 | $54,900 to $56,100 | $1,200 (2.2%) |
| Taxes and fees | $3,150 | $3,850 | $55,150 to $55,850 | $700 (1.3%) |
Two variables at once
Total cost of ownership by vehicle purchase price and expected resale value
| Vehicle purchase price \ Expected resale value | $17,600 | $22,000 | $26,400 |
|---|---|---|---|
| $33,600 | $51,500 | $47,100 | $42,700 |
| $37,800 | $55,700 | $51,300 | $46,900 |
| $42,000 | $59,900 | $55,500 | $51,100 |
| $46,200 | $64,100 | $59,700 | $55,300 |
| $50,400 | $68,300 | $63,900 | $59,500 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Vehicle purchase price | $42,000 |
| Expected resale value | $22,000 |
| Total financing interest | $6,000 |
| Annual fuel or energy cost | $2,200 |
| Annual insurance | $1,800 |
| Annual maintenance and repairs | $1,200 |
| Taxes and fees | $3,500 |
| Ownership years | 5.0 years |
| Total cost of ownership | $55,500 |
| Average monthly ownership cost | $925 |
| Depreciation cost | $20,000 |
Where the inputs come from
Vehicle purchase price and expected resale value give the depreciation cost. Total financing interest comes from the loan calculator, annual fuel or energy cost from the fuel calculators, annual insurance from a quote for the model and your driving record, and maintenance and repairs from experience or the manufacturer's schedule. Taxes and fees are the sales tax, registration and any yearly fees. Use the same ownership period for all items.
Using the total cost of ownership in a real decision
Look at electric and hybrid options, which shift costs from fuel to purchase price.
When the result stops applying
Many inputs are estimates, especially resale value and repairs, and they vary a great deal by model and how it is used. Costs change over time: maintenance rises as the car ages while depreciation falls. The calculation excludes parking, tolls and the cost of your time. Insurance can vary by hundreds of dollars between models.
What to compare it with
Estimate depreciation with the auto depreciation calculator, the loan cost with the auto loan page, and energy cost with the fuel cost and EV vs gas calculators. The lease versus buy page compares ownership models. The 20/4/10 calculator sets a budget guardrail.
People also ask
Frequently asked questions
What is included in total cost of ownership?
Depreciation, financing interest, fuel or electricity, insurance, maintenance and repairs, and taxes and fees such as registration.
What is the biggest cost of owning a car?
For most new cars, depreciation is the largest single cost, followed by financing, fuel and insurance.
Is a cheaper car always cheaper to own?
Not always. Higher fuel use, insurance and repair costs on a low-priced model can outweigh its purchase price savings over several years.