How to use Cost of Ownership Calculator
The car cost of ownership calculator totals every expense of owning a vehicle over 1–5 years: depreciation, financing interest, fuel, insurance, maintenance, registration and tyres. It converts to a cost-per-mile figure and compares two vehicles so you can see which is truly cheaper beyond the sticker price.
- Enter the vehicle purchase price and expected resale value at your horizon.
- Add your loan details for financing cost.
- Enter annual mileage, fuel economy and fuel price.
- Add estimated annual insurance, maintenance and registration costs.
- Review total cost, cost per mile and a comparison against a second vehicle.
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Depreciation — the hidden largest cost
A new car loses roughly 15–20% of its value in year one and 50–60% over five years. This invisible cost is often larger than all other ownership costs combined. Buying a two- to three-year-old vehicle with low mileage captures the steepest depreciation phase in the previous owner's cost, not yours — and typically still qualifies for remaining warranty.
| Year | Value remaining | Annual depreciation loss |
|---|---|---|
| Year 1 | ~80% of MSRP | ~20% |
| Year 2 | ~68% of MSRP | ~12% |
| Year 3 | ~58% of MSRP | ~10% |
| Year 5 | ~40% of MSRP | ~9%/yr |
| Year 7 | ~28% of MSRP | ~6%/yr |
IRS mileage rate and cost-per-mile context
The IRS standard mileage rate (2024: $0.67/mile) is set to cover all ownership costs — depreciation, fuel, insurance and maintenance. It serves as a useful benchmark: if your actual cost-per-mile calculation is near $0.67, your costs are in line with the national average. Fuel-efficient economy cars often come in $0.40–$0.50/mile; trucks and luxury vehicles exceed $0.80/mile.
Worked examples
$30k car owned 5 years, 75,000 miles
Inputs: dep $18k + fuel $8.75k + ins $7k + upkeep $5k + int $2k
Result: ≈ $40,750 ÷ 75,000 mi ≈ $0.54/mile
First-year depreciation on $30k MSRP
Inputs: ~20% × $30,000
Result: ≈ $6,000 lost in year one
Compare to IRS standard mileage rate
Inputs: $0.54/mi actual vs $0.67/mi IRS (2024)
Result: Below average — an efficient car to own
Typical cost per mile by vehicle type (planning aid)
| Vehicle type | Typical cost/mile | Main driver |
|---|---|---|
| Economy car | $0.40–0.50 | Low fuel & depreciation |
| Midsize sedan | $0.50–0.60 | Balanced costs |
| SUV / crossover | $0.60–0.75 | Fuel & depreciation |
| Full-size truck | $0.70–0.90 | Fuel & purchase price |
| Luxury / premium | $0.80+ | Depreciation & insurance |
Glossary
- Depreciation
- The loss of vehicle value over time; the largest ownership cost for most drivers.
- Cost per mile
- Total annual ownership cost divided by annual mileage.
- Resale value
- The car's projected market value at the end of your ownership period.
- Total cost of ownership
- Sum of all costs to own and operate a vehicle over a defined period.
Related reading
Frequently Asked Questions
Why use Cost of Ownership Calculator?
- Totals every ownership expense — depreciation, interest, fuel, insurance, maintenance and registration — in one place
- Expresses total spend as a cost-per-mile figure you can benchmark directly against the IRS standard mileage rate
- Shows depreciation as a separate line so the largest hidden cost becomes visible alongside cash expenses
- Compares two vehicles side by side to reveal which is genuinely cheaper over your actual ownership period
Common use cases
- Compare total 5-year cost of a new compact sedan versus a 3-year-old certified pre-owned alternative
- Evaluate whether a fuel-efficient hybrid saves more over 4 years than its higher purchase price costs
- Calculate accurate per-mile costs for a small business vehicle to support mileage reimbursement claims
- Assess which of two shortlisted SUVs is cheaper to own when insurance and fuel differences are factored in
- Understand the full annual cost of keeping a paid-off older vehicle versus replacing it with a newer model
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