True cost to own a car calculator

What is the true cost of owning a car?

It is every dollar the car takes out of your pocket while you own it, not just the loan payment. That means five things added together: depreciation (purchase price minus what you get back when you sell or trade it), fuel, insurance, maintenance and repairs, and interest if you financed it. Add those up over the years you own the car and divide by the years or the miles, and you get a number that actually lets you compare two different cars, or a car against public transit, on equal footing. A low monthly payment can hide a car that is expensive to own; a car with no payment at all can still be a bad deal if it depreciates fast and drinks fuel.

Calculate your true cost to own a car

Why depreciation is usually your biggest car cost

Depreciation is simply purchase price minus what you get back when you sell, trade in, or return the car. It rarely shows up on a bill, so people underweight it, but it is usually the largest single line in the true cost of ownership, bigger than fuel, bigger than insurance, and often bigger than maintenance and fuel combined. AAA's 2025 "Your Driving Costs" study, which tracks the ownership cost of 45 vehicle models, put average depreciation at $4,334 a year and called it "the most significant cost of vehicle ownership," out of an average total ownership cost of $11,577 a year. Fuel, insurance, and maintenance all matter, but depreciation is the number that quietly does the most damage.

How much does a car really depreciate?

Most new cars lose a large chunk of their value fast, then depreciate more slowly. iSeeCars, which tracked over 950,000 five-year-old used cars sold between March 2025 and February 2026 against inflation-adjusted original sticker prices, found the average vehicle had lost 41.8% of its value after five years, an improvement from 45.6% the year before. That average hides a wide range: trucks and hybrids tend to hold value better, while electric vehicles depreciate faster. The calculator above lets you enter either a resale dollar figure or a straight depreciation percentage for the exact vehicle and term you're comparing, since a generic average is a starting point, not your actual number.

What does fuel actually cost over the years you own a car?

Fuel cost is arithmetic: miles driven per year, divided by the car's miles-per-gallon, times the price of a gallon, times the number of years you own it. In the default example above (12,000 miles a year, 28 MPG, $3.50 a gallon, 5 years), that comes to $7,500, a real cost but well under the depreciation total. The IRS's own 2026 standard mileage rate, the flat per-mile figure it lets self-employed drivers deduct instead of tracking actual expenses, ran 72.5 cents per mile for the first half of 2026 and rose to 76 cents per mile from July 1 onward. That rate is not fuel alone; it bundles depreciation, fuel, insurance, and maintenance into one number, which is exactly why the IRS figure runs so much higher than fuel cost by itself, and it's a useful sanity check against your own cost-per-mile result below.

How much should you budget for insurance and maintenance?

Both are steady, mostly predictable annual costs, unlike depreciation, which is a single lump-sum swing at the end. Insurance depends on your state, age, driving record, and the car itself (some models cost noticeably more to insure). Maintenance and repairs climb as a car ages out of its warranty and needs tires, brakes, and bigger repairs. Neither is usually the biggest line item in the true cost of ownership, but both are the costs you control most directly, through your coverage choices and how well you keep up with routine service.

Does financing add to the true cost of a car?

Yes, if you borrow to buy it. The interest you pay a lender is a real cost of ownership on top of depreciation, fuel, insurance, and maintenance, even though it has nothing to do with the car itself. Enter the total interest you expect to pay over the loan (not the monthly payment, the total interest portion of it) in the calculator's optional financing field to fold it in. Paying cash, or comparing ownership cost separately from the financing decision, means leaving that field at zero.

A cheaper car that holds its value can beat a pricier one

Sticker price is a poor stand-in for true cost, because two cars with very different price tags can land in the same place, or flip order entirely, once depreciation is factored in. Say Car A costs $32,000 and holds 60% of its value after 5 years (resale $19,200, so $12,800 of depreciation). Car B costs less up front, $28,000, but only holds 40% of its value over the same 5 years (resale $11,200, so $16,800 of depreciation). If fuel, insurance, and maintenance are identical for both (say $20,500 total over 5 years, no financing), Car A's true cost is $33,300 and Car B's is $37,300. The car with the higher sticker price ends up about $4,000 cheaper to own, because it held its value. That is the whole case for checking a depreciation estimate before you check the price tag.

Cost per year and cost per mile: what do they tell you?

Cost per year (total cost of ownership divided by years) is the number to use when comparing cars you might keep for different lengths of time, or when budgeting an annual car expense alongside rent, insurance, and other yearly costs. Cost per mile (total cost divided by total miles driven) is the better number when comparing driving a car against other options, like taking a job that requires a longer commute, or against a per-mile reimbursement rate like the IRS's. In the default example, the $37,500 total works out to $7,500 a year and about $0.625 a mile, over $60,000 total miles.

The bottom line

Depreciation, not fuel, is the cost that decides whether a car is cheap or expensive to own. A gas-guzzler with excellent resale value can still beat a fuel-sipper that craters in value, and the only way to know which car you're looking at is to run the actual numbers, not guess from the price tag or the miles-per-gallon sticker. Run your own purchase price, expected resale, and driving habits through the calculator above before you decide, and compare the total against what you'd pay to finance it with the car loan calculator.

Related auto guides

For the loan math behind financing a car, see the car loan calculator. For the bigger picture on what a car actually costs to buy, finance, or lease, start at the auto hub.