The true cost of vehicle ownership extends far beyond the initial purchase price. Use our Cost of Owning a Car Calculator to estimate your total annual and monthly expenditures, including depreciation, fuel, insurance, and maintenance.
Cost of Owning a Car Calculator
*Includes estimated 15% annual depreciation.
Cost of Owning a Car Calculator Formula:
$$Total\ Annual\ Cost = (P \times D) + (M \times 12) + (F \times 12) + I + R + T$$
Source: AAA – Your Driving Costs Study
Variables:
- P (Purchase Price): The total cost of the vehicle including taxes.
- D (Depreciation Rate): The annual loss in value (standard estimate is ~15%).
- M (Monthly Payment): Your fixed monthly loan or lease installment.
- F (Monthly Fuel): Average monthly expenditure on gas or electricity.
- I (Annual Insurance): Total cost of your insurance coverage per year.
- R & T (Registration & Maintenance): Yearly recurring fees and service costs.
Related Calculators:
What is the Cost of Owning a Car Calculator?
The Cost of Owning a Car Calculator is a comprehensive financial tool designed to reveal the “hidden” expenses of vehicle ownership. While most buyers focus on the monthly loan payment, the actual cost includes operating expenses like fuel and maintenance, as well as non-cash expenses like depreciation.
Understanding these costs helps consumers make better decisions about whether a specific vehicle fits their budget over a 5-year or 10-year horizon. It transforms abstract numbers into a concrete monthly budget figure.
How to Calculate Cost of Owning a Car (Example):
- Identify Fixed Costs: Start with your annual insurance ($1,200) and registration ($300).
- Calculate Variable Costs: If you spend $150/month on gas, that’s $1,800/year.
- Account for Depreciation: For a $30,000 car, a 15% depreciation is $4,500/year.
- Sum Everything: $1,200 (Ins) + $300 (Fees) + $1,800 (Gas) + $4,500 (Depr) + $6,000 (Loan) = $13,800 total per year.
Frequently Asked Questions (FAQ):
For new cars, depreciation is typically the largest single expense, often exceeding fuel or insurance costs during the first few years.
A general rule of thumb is to set aside $50 to $100 per month for routine maintenance and unexpected repairs.
Yes. Simply input your monthly electricity costs in the fuel field and adjust maintenance downward, as EVs typically have lower service costs.
While you don’t pay it monthly, it represents the loss of value you realize when you sell or trade in the vehicle, making it a critical financial factor.