Enter your car's value, driving, and bills to estimate total ownership cost, monthly and yearly averages, and cost per mile.
This is the economic cost estimate. Loan principal is not added because that would count the car acquisition twice.
This is for recurring cash planning, not total economic ownership cost.
Calculation details
Table of contents
How to use our Car Ownership Cost Calculator
- Choose "Ownership cost" for the full economic estimate, or choose "Monthly cash" to compare current recurring bills with the monthly ownership-cost average.
- Enter the years you will own the car, miles driven per year, starting value, expected resale value, fuel economy, and gas price.
- Enter yearly insurance, routine maintenance, repairs and tires, and registration or recurring fees using bills, records, or a realistic budget.
- Open "Advanced options" to add one-time purchase fees, financing interest, or yearly parking and tolls when they apply to your plan.
- Select "Calculate," then check whether the total miles, fuel cost, and cost per mile fit your driving plan before relying on the estimate.
Definitions
Change in vehicle value: Starting vehicle value minus expected resale value. A positive amount is value lost; a negative amount means the entered resale value is higher.
Expected resale value: Your estimate of what the car could sell or trade for at the end of the selected ownership period.
MPG: Miles per gallon. Higher MPG means fewer gallons are needed for the same driving distance.
Financing interest: The charge for borrowing money during the ownership period. It does not include loan principal.
Ownership cost per mile: Total economic ownership cost divided by all miles driven during the selected period.
Monthly cash needed: Monthly loan payment plus recurring operating bills averaged over a month. It is different from the monthly ownership-cost average.
Common mistakes and quick fixes
Mistake: Adding the full loan payment to ownership cost.
Fix: Enter only interest in "Financing interest during ownership ($)." Loan principal is already reflected by the car's starting and resale values.
Mistake: Entering a monthly insurance bill in "Auto insurance ($ per year)."
Fix: Multiply the monthly premium by 12 before entering it.
Mistake: Using $0 for expected resale value without meaning to.
Fix: Estimate the sale or trade-in value at the end of the ownership period so the change in vehicle value is not overstated.
Mistake: Entering zero for ownership years, annual miles, or MPG.
Fix: Enter a value greater than zero. These values are needed for fuel use, averages, and cost per mile.
Mistake: Typing 1,01 for a money amount.
Fix: Use commas only for thousands, such as 1,000, and a decimal point for cents, such as 1.01.
Mistake: Treating the monthly ownership average as this month's bill.
Fix: Choose "Monthly cash" and enter "Monthly loan payment ($)" to compare current recurring cash needed with the economic monthly average.
Limitations & Key Assumptions / Boundary Conditions
- Fuel cost assumes annual miles, MPG, and gas price stay the same throughout the selected ownership period.
- Insurance, maintenance, repairs and tires, registration, parking, and tolls are treated as constant yearly amounts, although actual bills can change.
- Expected resale value is a planning estimate. Condition, mileage, accidents, local demand, and market prices can change the actual sale or trade-in amount.
- The estimate includes only costs entered in the calculator. It does not estimate accident losses, loan payoff penalties, taxes not entered as purchase fees, or the cost of time without a car.
- Monthly cash needed excludes depreciation, one-time purchase fees, and separately entered financing interest because they are not recurring current monthly bills.
- Loan principal is excluded from economic ownership cost so the vehicle's value is not counted twice.
Methodology
How the estimate is calculated
The calculator adds the change in vehicle value to fuel, insurance, routine maintenance, repairs and tires, registration and recurring fees, and any optional costs entered. One-time purchase fees and financing interest are added once for the selected ownership period.
annual fuel gallons = annual miles / MPG
fuel cost during ownership = annual fuel gallons * gas price per gallon * ownership years
change in vehicle value = starting vehicle value - expected resale value
total ownership cost = change in vehicle value + fuel + insurance + maintenance and repairs + registration and purchase fees + financing interest + parking and tolls
average monthly ownership cost = total ownership cost / (ownership years * 12)
ownership cost per mile = total ownership cost / (annual miles * ownership years)
Monthly cash calculation
In "Monthly cash," the calculator adds the monthly loan payment to recurring operating costs divided by 12. Loan principal is part of the payment but is not added to the economic ownership-cost total.
monthly cash needed = monthly loan payment + annual recurring cash cost / 12
monthly cash minus monthly ownership cost = monthly cash needed - average monthly ownership cost
Mini-example
Suppose you own a car for 2 years, drive 10,000 miles per year, start with a $30,000 car, and expect it to be worth $15,000 at the end. At 25 MPG and $4.50 per gallon, fuel costs $3,600 over 2 years. If insurance, routine maintenance, repairs and tires, and registration each cost $1,200 per year, total ownership cost is $28,200. That is $14,100 per year, $1,175 per month, and about $1.41 per mile.