Cost of Car Ownership Calculator United States
This cost of car ownership calculator adds depreciation, insurance, maintenance and fuel over the years you keep a car in the US, with the average annual cost.
What it does
The Cost of Car Ownership Calculator adds up the true cost of owning a car over the years you keep it — the depreciation it loses in value plus the insurance, maintenance and fuel you pay each year — and shows the average cost per year.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Depreciation = purchase price − resale value; Total = depreciation + (insurance + maintenance + fuel) × years; Annual = total ÷ years
How it works
It works out depreciation as the purchase price minus the resale value, multiplies your annual insurance, maintenance and fuel by the number of years you own the car, adds the two together for the total cost of ownership, then divides by the years to give an average annual cost.
Where it is used
- Comparing the real cost of two cars before you buy
- Budgeting the yearly cost of running a vehicle
- Deciding how long to keep a car before replacing it
Worked example
A $35,000.00 car kept for 5 years and sold for $15,000.00 costs … in total — that is … a year, of which … is lost to depreciation.
The purchase price is only part of what a car costs. Every year you keep it, it loses value, and you pay for insurance, servicing and repairs, and fuel or charging. This cost of car ownership calculator adds those up so you can see what a vehicle costs over the whole time you own it.
What total cost of ownership means
Total cost of ownership has two parts. The first is depreciation: the difference between what you pay for the car and what it is worth when you sell it. You never write a check for depreciation, so it is easy to ignore, but it is usually the largest cost. The second is running costs: insurance, maintenance and repairs, and fuel or electricity, the bills you pay every year.
How the calculator works
Enter the purchase price, how many years you plan to keep the car, and your yearly insurance, maintenance and fuel costs. If you expect to sell or trade the car at the end, enter its resale value in the advanced options. The calculator subtracts the resale value from the purchase price to find depreciation, multiplies each annual running cost by the number of years, adds everything for the total cost of ownership, and divides by the years for an average cost per year. The chart splits the total into its four parts.
A worked example
Suppose you buy a car for $35,000, keep it for five years, and sell it for $15,000. Depreciation is $20,000. Each year you spend $1,500 on insurance, $1,000 on maintenance and $1,800 on fuel, $4,300 a year or $21,500 over five years. The total cost of ownership is $41,500, or $8,300 a year.
Depreciation alone, at $20,000, is nearly as much as five years of all running costs combined, and the monthly payment does not show it.
Using it to compare cars
A cheaper car that uses a lot of fuel and depreciates fast can cost more than a pricier one that is efficient and holds its value. An electric car may cost more up front but much less to fuel and maintain. Run each option with realistic numbers and compare the average annual cost instead of the purchase price.
Ownership length matters too. Depreciation per year is steepest early and flattens as a car ages, so the average annual cost of a car usually falls the longer you keep it. Drivers who keep a reliable car for eight or ten years often pay far less per year than those who trade every three. Run the same car at five and ten years and the average annual cost can differ by thousands.
How depreciation is spread
A new car typically loses the steepest share of its value in its first two or three years. A driver who buys new and sells after three years takes the biggest part of that loss, while the buyer of a three-year-old car avoids it. Depreciation also varies by brand and body style: models with strong reliability reputations and steady demand hold value better than those that flood the used market. A realistic resale value often changes the total more than any running-cost field, so look up comparable used prices instead of guessing.
Common mistakes to avoid
The most common mistake is judging affordability by the monthly loan payment, which covers financing but ignores depreciation, insurance and fuel. Another is leaving resale value at zero when you plan to sell, which overstates depreciation and makes every car look equally expensive. A third is using optimistic running costs: insurance for a young driver or a sports car can be far higher than for a family sedan, and maintenance climbs once a car is out of warranty. Use numbers from your own situation.
Assumptions and limitations
This is a planning estimate. It assumes your annual insurance, maintenance and fuel costs stay roughly level, while in reality maintenance tends to rise as a car ages and fuel prices change. It does not include loan interest, registration, taxes, parking, tolls, or the value of the cash tied up in the car. If you finance the car, add the total interest. The calculator uses no fixed rates or thresholds; every number is one you supply, so the result is only as accurate as your inputs.
About This Cost of Car Ownership Calculator
Use this cost of car ownership calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What is the true cost of owning a car?
Why is depreciation the biggest cost of owning a car?
How do I estimate my annual fuel cost?
Should I include the resale value?
What costs does this calculator leave out?
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