Total Cost of Car Ownership

Insurance, Maintenance & Registration

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Includes your inputs and results for this calculation, plus any additional calculations you've compared.

Good to Know

Depreciation, fuel, insurance, and maintenance costs are all plain user-adjustable estimates, not a lookup for a specific vehicle or driver profile -- actual costs vary widely by make, model, driving habits, and location. Use the Car Depreciation Calculator for a resale-value estimate if you do not already have one.

Disclaimer

This calculator provides estimates for informational purposes only and does not constitute financial, medical, legal, or tax advice. Always consult a qualified professional about your specific situation.

How Total Cost of Ownership Is Calculated

The sticker price of a car is only a fraction of what it actually costs to own. Enter your purchase details, financing terms, expected resale value, and ongoing costs, and this calculator adds up depreciation, financing interest, fuel, insurance, maintenance, and registration into one lifetime total and an average monthly figure. Set the loan term to zero to model a cash purchase — the calculator then skips financing interest entirely and treats the full purchase price as paid upfront.

The Formula

  • Depreciation = Purchase Price − Estimated Resale Value.
  • Financing interest = the sum of each month’s interest portion in a standard loan amortization, simulated only for as long as the vehicle is actually financed (the shorter of the loan term or the ownership period).
  • Fuel cost = (Annual Miles ÷ Fuel Economy) × Fuel Price × Ownership Years.
  • Total cost of ownership = Depreciation + Financing Interest + Fuel + Insurance + Maintenance + Registration & Taxes.

Worked Example

A $30,000 car with a $5,000 down payment, a 5-year loan at 6%, owned for 5 years, with an estimated $12,000 resale value, 12,000 miles/year at 28 mpg and $3.50/gallon fuel, $120/month insurance, $800/year maintenance, and $300/year registration:

  1. Depreciation: $18,000 ($30,000 − $12,000).
  2. Financing interest: $3,999.20 (amortized over the full 5-year loan).
  3. Fuel: $7,500 (12,000 ÷ 28 × $3.50 × 5 years).
  4. Insurance, maintenance & registration: $12,700 combined over 5 years.
  5. Total cost of ownership: $42,199.20 — about $703 per month on average.

Key Factors to Consider

  • A longer ownership period spreads the purchase-related costs over more years, often lowering the average monthly cost. Depreciation and financing interest are largely front-loaded costs, so keeping a vehicle longer after the loan is paid off (with only fuel, insurance, and maintenance continuing) typically lowers the average cost per month of ownership over the full period.
  • Maintenance costs tend to rise as a vehicle ages. A new vehicle under warranty often has minimal maintenance costs in its early years, while an older vehicle typically needs more frequent repairs and replacement parts — using a flat average maintenance figure across the whole ownership period is a simplification worth keeping in mind.
  • Opportunity cost of the down payment isn’t included in this total. Money used for a down payment could otherwise have been invested — this calculator focuses on the direct dollar costs of ownership, not the broader financial tradeoff of tying up that capital in a depreciating asset.
  • Comparing two different vehicles side by side is where this calculator adds the most value. A vehicle with a lower purchase price but worse fuel economy, higher insurance, or faster depreciation can end up costing more overall than a pricier vehicle — running both through this calculator surfaces that kind of tradeoff a sticker-price comparison alone would miss.

Common Mistakes

  • Judging affordability by the loan payment alone. A car with a low monthly payment can still cost more overall once fuel, insurance, and depreciation are added in — see the Auto Loan Calculator for the payment itself, and this calculator for the full picture.
  • Guessing at resale value. Depreciation is usually the single largest cost of ownership, so a rough guess here can throw off the whole total — the Car Depreciation Calculator gives a more grounded starting estimate.
  • Forgetting insurance and maintenance entirely. These recurring costs are easy to overlook next to the purchase price and loan payment, but they add up to real money over several years of ownership.
  • Comparing two vehicles over different ownership periods. Because depreciation and financing interest are front-loaded, a shorter ownership period always looks proportionally more expensive per month than a longer one on the same vehicle — only compare two vehicles run over the same number of ownership years.

Interpreting Your Results

The average monthly cost figure is meant to be compared against a car’s loan payment alone — if the two numbers are close, fuel, insurance, and maintenance are adding relatively little on top of financing; if the average monthly cost is noticeably higher than the loan payment, those ongoing costs (or depreciation) make up a large share of what the vehicle really costs to own. Because depreciation and financing interest are front-loaded, the average monthly figure tends to understate the cost of the early ownership years and overstate the cost of the later ones — a vehicle kept well past its loan term will actually cost less per month in its final years than the average suggests, once only fuel, insurance, and maintenance remain.

Source: AAA: How Much Does It Cost to Own a Car?.

Frequently Asked Questions

What does the total cost of car ownership include?

This calculator combines every major recurring and one-time cost of owning a vehicle over a chosen ownership period: depreciation (purchase price minus resale value), financing interest (if the car is financed), fuel, insurance, maintenance and repairs, and registration and taxes -- added together into one lifetime total, plus an average monthly figure.

Why is depreciation usually the biggest cost of owning a car?

A vehicle typically loses a large share of its value over just a few years, and unlike a loan payment or fuel cost, depreciation isn't a bill anyone writes -- it's just the difference between what you paid and what the car is worth later. It's easy to overlook for exactly that reason, even though it's often the single largest cost of ownership.

How is the financing interest calculated if I sell the car before the loan is paid off?

This calculator simulates the loan's amortization schedule month by month, but only counts interest for as long as the car is actually financed -- whichever is shorter, the loan term or your chosen ownership period. If you keep the car years after the loan is paid off, those extra years correctly show zero financing interest.

Does keeping a car longer lower its average cost of ownership?

Often, yes -- depreciation and financing interest are largely front-loaded costs, so once a loan is paid off, only fuel, insurance, and maintenance continue. Spreading the same purchase-related costs over more years of ownership typically lowers the average monthly cost, all else being equal.

Is this calculator useful for comparing two different vehicles?

Yes -- this is one of its most useful applications. A vehicle with a lower purchase price but worse fuel economy, higher insurance, or faster depreciation can end up costing more overall than a pricier vehicle. Running both vehicles through this calculator surfaces that kind of tradeoff a sticker-price comparison alone would miss.

How do I model paying cash instead of financing?

Set the loan term to zero years. The calculator then treats the purchase as fully paid upfront and skips financing interest entirely, so the total cost of ownership reflects only depreciation, fuel, insurance, maintenance, and registration.

Does this include the opportunity cost of tying up money in my down payment?

No -- this calculator focuses on the direct out-of-pocket dollar costs of owning the vehicle, not the broader financial tradeoff of what a down payment could have earned if invested elsewhere instead. That opportunity cost is real, but it depends on assumptions (an investment return rate, a time horizon) outside the scope of a straightforward ownership-cost total.

What should I enter for maintenance if I don't have a real number yet?

A commonly used starting point is a few hundred to around a thousand dollars a year for a newer, reliable vehicle, rising as the car ages -- but this varies enormously by make, model, and how the car is driven, so treat it as a rough placeholder rather than a fact. Checking a specific model's typical repair and maintenance costs (from a trusted automotive research source) before making a purchase decision will give a far more grounded number than any single default this calculator could offer.

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