Car Cost Calculator

This car cost calculator figures the true cost of ownership for running either one car or comparing between two cars.

This calculator makes it easy to compare car costs on totally different deals from new to used by factoring in all the relevant expenses (depreciation rates, interest rates, purchase prices, insurance costs, mpg ratings, etc.).

To calculate costs for a single car click on the "Single Car Calculation" radio button, fill in the left-hand column with the vehicle cost data and then click the "Calculate Car Cost" button. To compare two cars click on the "Double Car Calculation" radio button, fill in both columns data and then click the "Calculate Car Cost" button. If both vehicles have similar data, you can fill in the first column with the "Single Car Calculation" radio button selected, and then click on the "Copy Car #1 Entries to Car #2" button to fill in the right-hand column (be sure to switch to the "Double Car Calculation"). Then just change any cells that are different before calculating.

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Single Car Calculation Double Car Calculation
Entry Descriptions Car #1 Car #2
Purchase price:
Enter sales-tax percentage:
Enter annual license cost:
Enter extended warranty cost:
Will you be financing this car?:
Enter down payment amount:
Enter financing rate (APR):
Enter financing term (# months):
Enter annual insurance cost:
Enter expected annual driving mileage:
Enter car Miles Per Gallon rating:
Enter cost of one gallon of gasoline:
How many years old is the car?:
How many years do you expect to own this car?:
Enter estimated monthly maintenance/ repair cost:
Tax, License, and Warranty Costs:
Depreciation Costs:
Finance Costs:
Insurance Costs:
Fuel Costs:
Maintenance & Repair Costs:
Total cost of owning the car:
Annual cost to own this car:
Cost per mile:


What Is The True Cost Of Car Ownership?

Most people greatly underestimate what it costs to drive a car.

The true cost, when you figure everything in, can be surprisingly high.

Similarly, your car costs can vary dramatically from vehicle to vehicle depending on whether you buy used, or new, expected maintenance, and much more.

Thankfully, this car cost calculator makes it easy to figure the true cost of car ownership and even compare costs between different vehicles by applying all relevant factors including tax, license, warranty, depreciation, finance, insurance, fuel, maintenance, and repair costs.

Below is more information to help you properly use this car cost calculator so you can reduce your vehicle ownership  expenses.

The Importance Of Car Costs

Buying a car is likely one of the largest purchases you’ll ever make – second only to a home.

Most people incorrectly view their car costs as simply the monthly payment. This is a mistake.

Your true cost includes depreciation, insurance, maintenance, fuel, and much more. In short, there are many factors to weigh… including the monthly payment.

The high costs of car ownership are particularly important because it affects your ability to do other things with your money like take a vacation, invest for retirement, or pay off debt. Not only that, but different cars can have dramatically different costs – sometimes twice or 3 times as expensive per mile to operate – when compared to another car.

That’s why it’s important to use a Car Cost Calculator to figure it all out. It’ll show the true impact on your budget of your vehicle expenses and help you find the best deal to match what you can truly afford.

The Costs Of Owning A Car

Here are some costs of owning a car including tips to help you save money.

Just like any other retail purchase, you’ll pay sales tax when you purchase a car (assuming you live in a state with sales tax). This can require a lot of extra up-front money, unless of course you finance the vehicle. Tip: By purchasing certain fuel-efficient vehicles like electric cars and hybrids, you might be able to help offset this cost with a tax credit.

The annual license cost is your regular payment to use your vehicle on public roads. You have to pay this fee to legally drive. Tip: Make sure you follow all laws and pay any applicable fees to governing bodies to avoid tickets.

The extended warranty cost is an optional additional payment to your car dealer (or manufacturer) to protect yourself in case of unexpected major cost due to mechanical failure. Tip: It may be better to build up an emergency fund to cover these types of expenses.

The depreciation expense can be the largest cost of your car. Depreciation is simply the wear-and-tear cost which reduces the value of your car after a few years. The depreciation rate for each car varies. An average car depreciates about 65 percent at the end of five years. It is important to know the depreciation cost of your car since this is an important factor if you want to sell your car after a few years. Resale value is calculated by deducting the depreciation cost from the original purchase price. Tip: Buy a car at least five years old to avoid heavy depreciation costs.

The fuel cost will vary depending on the mpg (miles per gallon or equivalent) and the price of the fuel. Fuel cost is another one of the major expenses of owning a car. Tip: You can save money on fuel by consolidating trips, avoiding heavy acceleration, and driving smaller, more fuel efficient vehicles.

Interest costs can certainly add up when you’re financing a vehicle. Tip: Try paying cash for your car (if possible) to avoid interest charges.

The car insurance premium is the amount you pay for insurance protection in case you get into an accident. Car insurance is required to operate a vehicle. Tip: Shop around for the best insurance rates and figure out how much insurance protection you really need before deciding which insurance policy to buy.

Newer cars require fewer repairs and maintenance compared to older cars. Tip: Weigh the maintenance risk of buying a used car against the depreciation and higher purchase price of a new car. Low mileage, used cars in the 4-6 year old range can represent an excellent value that balances these factors.

Car accessories can jazz up a car, but aren’t necessary. Tip: Avoid adding on excessive accessories that add too much to the car cost. You can find third-party accessories for much less money than dealer-installed accessories.

Final Thoughts

When buying a car, don’t make the mistake of thinking only in terms of the monthly payment. Make sure to include all of the additional costs in owning a car and use the car cost calculator to figure your true cost of ownership.

There’s no surefire rule-of-thumb you can use to make the best decision when considering various cars. What you’ll find is old cars tend to be cheaper to buy but are excessively high in maintenance costs down the road. New cars have high monthly payments and depreciation charges making them the most expensive. In between is the late-model, gently used car – 4-6 years old with low mileage. That is often your lowest cost car to drive when all factors are taken into account.

This Car Cost Calculator will help you put hard numbers to the analysis and find the best deal in transportation for your needs.

Car Cost Calculator Terms & Definitions

  • Purchase Price – How much you pay for the car.
  • Down Payment – The initial amount paid to the dealer that is subtracted from the purchase price to determine the amount financed.
  • Annual License – The fee paid every year for the license to drive the vehicle (this can include any registration fees).
  • Extended Warranty – An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty to transfer risk away from the consumer to the dealer or manufacturer.
  • Financing Rate (APR) – The interest rate that reflects all the costs of the loan during a one year time period.
  • Car Insurance – A policy purchased by vehicle owners to pay the costs associated with getting into a car accident.
  • Term – The length of the auto loan financing –  usually measured in months.
  • Trade-in Allowance – The value of your old vehicle being traded toward the purchase price of a new vehicle.
  • Sales Tax Percentage – The tax percentage amount you pay when purchasing a vehicle (if sales tax is applicable).
  • Wear and Tear – The stress on the car caused by normal use.
  • Depreciation Cost – The amount reduced from the value of your vehicle due to age, mileage and wear.

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