# Car ownership cost calculator

> Total cost of owning a car over 1–15 years: depreciation, fuel, insurance, maintenance and loan interest, per year, per km and per mile.

Interactive version: https://www.calcopenly.com/construction/car-ownership-cost-calculator
Subject: Construction and home calculators

Total cost of ownership adds up what a car costs while you keep it: the fall in its value, fuel, insurance, maintenance and loan interest. The value drops by the first-year rate, then by the later rate on what is left each year. Fuel is distance divided by economy times the price, and interest comes from a monthly amortised loan, counting only the years you own the car.

The default, a 35,000 car kept five years and driven 15,000 km a year, with 30,000 borrowed at 7% over five years, costs 46,713.48 in total: 9,342.70 a year or 0.62 per km. Depreciation of about 20,384 is the largest part, leaving the car worth 14,616.18.

Fuel, insurance and maintenance are held at today's prices for every year, and the car is assumed to sell at its depreciated value. Set the depreciation rates from resale prices for the model you are considering.

## Inputs

- **Purchase price**
- **Years of ownership**
- **Depreciation in year 1**: Share of the purchase price lost in the first year.
- **Depreciation each later year**: Share of the remaining value lost each year after the first.
- **Distance per year**
- **Fuel economy**
- **Fuel price per** (options: Litre, US gallon, UK gallon)
- **Fuel price**
- **Insurance per year**
- **Maintenance and repairs per year**
- **Down payment**: Enter the full price to model a cash purchase.
- **Loan interest rate (APR)**
- **Loan term**

## Results

- Total cost of ownership — main result
- Average per year
- Cost per km
- Cost per mile
- Depreciation
- Fuel
- Insurance
- Maintenance
- Loan interest
- Value at the end
- Monthly loan payment

## Formula

$$
\text{TCO} = (P - V_n) + n(\text{fuel} + \text{insurance} + \text{maintenance}) + \text{interest},\quad V_n = P(1 - d_1)(1 - d)^{n-1}
$$

## Worked examples

### 35,000 car, 5 years, 15,000 km a year, 30,000 loan at 7%

- Purchase price: 35,000
- Years of ownership: 5
- Depreciation in year 1: 20%
- Depreciation each later year: 15%
- Distance per year: 15,000 km
- Fuel economy: 7 L/100 km
- Fuel price per: Litre
- Fuel price: 1.75
- Insurance per year: 1500
- Maintenance and repairs per year: 800
- Down payment: 5000
- Loan interest rate (APR): 7%
- Loan term: 5 years
- **Total cost of ownership: 46,713.48**
- **Depreciation: 20,383.83**
- **Fuel: 9,187.50**
- **Loan interest: 5,642.16**
- **Value at the end: 14,616.18**
- **Monthly loan payment: 594.04**
- **Cost per km: 0.62**
- Checked against: Python decimal: value 35,000 × 0.8 × 0.85⁴ = 14,616.18; fuel 1,050 L × 1.75 × 5; loan 30,000 at 7%/12 over 60 months → 594.04/month, interest 5,642.16 (60 × 594.04 − 30,000)

### Edge: cash purchase, no loan

- Purchase price: 35,000
- Years of ownership: 5
- Depreciation in year 1: 20%
- Depreciation each later year: 15%
- Distance per year: 15,000 km
- Fuel economy: 7 L/100 km
- Fuel price per: Litre
- Fuel price: 1.75
- Insurance per year: 1500
- Maintenance and repairs per year: 800
- Down payment: 35,000
- Loan interest rate (APR): 7%
- Loan term: 5 years
- **Total cost of ownership: 41,071.33**
- **Loan interest: 0.00**
- **Monthly loan payment: 0.00**
- **Average per year: 8,214.27**
- Checked against: Python decimal: 20,383.83 depreciation + 5 × (1,837.50 + 1,500 + 800)

### Zero-rate 5-year loan, sold after 3 years

- Purchase price: 20,000
- Years of ownership: 3
- Depreciation in year 1: 20%
- Depreciation each later year: 15%
- Distance per year: 10,000 km
- Fuel economy: 6 L/100 km
- Fuel price per: Litre
- Fuel price: 2
- Insurance per year: 1000
- Maintenance and repairs per year: 500
- Down payment: 0
- Loan interest rate (APR): 0%
- Loan term: 5 years
- **Total cost of ownership: 16,540.00**
- **Depreciation: 8,440.00**
- **Value at the end: 11,560.00**
- **Loan interest: 0.00**
- **Monthly loan payment: 333.33**
- Checked against: Hand calculation: 20,000 × 0.8 × 0.85² = 11,560; 3 × (1,200 + 1,000 + 500) = 8,100; + 8,440 = 16,540

### US: 40,000 car, 12,000 mi a year at 25 mpg, 6.5% for 6 years

- Purchase price: 40,000
- Years of ownership: 5
- Depreciation in year 1: 20%
- Depreciation each later year: 15%
- Distance per year: 12,000 mi
- Fuel economy: 25 mpg (US)
- Fuel price per: US gallon
- Fuel price: 3.5
- Insurance per year: 1800
- Maintenance and repairs per year: 900
- Down payment: 8000
- Loan interest rate (APR): 6.5%
- Loan term: 6 years
- **Total cost of ownership: 51,704.24**
- **Fuel: 8,400.00**
- **Loan interest: 6,508.44**
- **Cost per mile: 0.86**
- **Monthly loan payment: 537.92**
- Checked against: Python decimal: 480 gal/yr × 3.50 × 5 = 8,400; 32,000 at 6.5% over 72 months → 537.92/month; interest in the first 60 months 6,508.44

## Questions

### What is included in the total cost of owning a car?

Depreciation, fuel, insurance, maintenance and repairs, and loan interest over the years you keep the car. AAA's 2026 Your Driving Costs study (15 September 2026) puts the average for a new vehicle at $12,863 a year, based on five years and 75,000 miles. The default here, a 35,000 car kept five years and driven 15,000 km a year, comes to 46,713.48, or 9,342.70 a year.

### What is the biggest cost of owning a new car?

Depreciation. AAA's 2026 Your Driving Costs study found new vehicles lose a weighted average of $4,422 a year, its largest ownership cost. With the defaults here, a 35,000 car losing 20% in year one and 15% a year after that is worth 14,616.18 after five years, so depreciation is about 20,384, or 44% of the 46,713.48 total.

### How do you calculate car depreciation?

Multiply the value by one minus the yearly rate, once for each year owned. With 20% in the first year and 15% after that, a 35,000 car is worth 35,000 × 0.8 × 0.85⁴ = 14,616.18 after five years, and the difference, about 20,384, is the depreciation. Mileage, condition and model all move real resale prices, so check the rates against listings for similar used cars.

### Does loan interest count as a cost of ownership?

Yes, because it is money paid only for borrowing. A 30,000 loan at 7% APR over five years costs 594.04 a month and 5,642.16 in interest. Only interest paid while you own the car is counted; if you sell before the loan ends, the remaining balance is repaid from the sale. A cash buyer pays no interest but gives up what the money could have earned, which is not modelled.

### How much does a car cost per mile to own?

Divide the total cost by the distance driven. The default car costs 46,713.48 over 75,000 km, which is 0.62 per km or 1.00 per mile. For comparison, the IRS standard mileage rate for business driving, which may be claimed in place of actual car expenses, is 76 cents a mile from 1 July 2026 (IR-2026-29).

### How accurate is the car ownership cost calculator?

Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 4 worked examples whose answers come from independent sources; for example, “35,000 car, 5 years, 15,000 km a year, 30,000 loan at 7%” is checked against Python decimal: value 35,000 × 0.8 × 0.85⁴ = 14,616.18; fuel 1,050 L × 1.75 × 5; loan 30,000 at 7%/12 over 60 months → 594.04/month, interest 5,642.16 (60 × 594.04 − 30,000).

### Where does the method come from?

AAA — Your Driving Costs 2026: new vehicle ownership costs hit $12,863 annually; IRS — standard mileage rates (IR-2026-29); Microsoft Excel PMT function (monthly loan payment).

## Sources

- [AAA — Your Driving Costs 2026: new vehicle ownership costs hit $12,863 annually](https://newsroom.aaa.com/2026/09/aaa-new-vehicle-ownership-costs-hit-12863-annually/)
- [IRS — standard mileage rates (IR-2026-29)](https://www.irs.gov/tax-professionals/standard-mileage-rates)
- [Microsoft Excel PMT function (monthly loan payment)](https://support.microsoft.com/office/pmt-function-0214da64-9a63-4996-bc20-214433fa6441)

_Note: financial information, not professional advice._