What is total cost of ownership (TCO) for a car?

Total cost of ownership is the all-in dollar amount you spend on a vehicle over a defined period, typically 5 years. It includes depreciation (the largest cost), loan interest, fuel, insurance, maintenance, unscheduled repairs, sales tax, and registration fees. Sticker price alone hides 60–70% of true cost.

What is the average 5-year cost of owning a car?

The average 5-year TCO for a new mid-size sedan is roughly $45,000 — about $9,000/year or $750/month. SUVs run $50,000–$55,000, full-size trucks $55,000–$60,000, luxury vehicles $65,000–$80,000, and EVs $38,000–$42,000 once fuel and maintenance savings are counted.

Why is depreciation usually the biggest cost?

A typical new car loses 20% of its value in year one and 50% by year five. On a $35,000 vehicle that's $17,500 lost to depreciation alone — usually more than fuel, insurance, and maintenance combined. Buying a 2-3 year old used vehicle lets the previous owner absorb most of this cost.

How does this calculator compare to Edmunds or Kelley Blue Book True Cost to Own?

Edmunds True Cost to Own and KBB 5-Year Cost to Own use proprietary depreciation tables tied to specific year/make/model VIN data. Our calculator uses transparent assumptions you can edit yourself, so you can run scenarios neither of those tools support — different mileages, custom insurance quotes, your actual APR, your state's sales tax, and side-by-side comparison.

Are EVs really cheaper to own than gas vehicles?

Often yes, after 5 years. EVs depreciate slightly faster than gas cars in years 1–3 but save $1,000–$1,500/year on fuel and 30–40% on maintenance (no oil changes, fewer brake replacements thanks to regen braking). Federal and state tax credits can also reduce the effective purchase price by $4,000–$7,500.

What annual mileage should I use?

The US average is 13,500 miles/year. Use 12,000 if you have a short commute, 15,000–18,000 for a long commute or rideshare driving, and 20,000+ for sales reps or long-distance commuters. Higher mileage tilts TCO toward fuel-efficient and reliable vehicles.

Why does insurance go up over time?

Insurance premiums have risen ~6–8% per year nationally since 2022 due to higher repair costs and severe weather claims. Our calculator applies a conservative 2% annual inflation. Your real-world increase may be higher — get a fresh quote each year and consider raising your deductible to control cost.

How accurate are the maintenance and repair estimates?

Our estimates use industry averages: $500/yr for low-maintenance vehicles (e.g. Toyota, Honda), $800/yr average, $1,400/yr for high-maintenance brands (e.g. some European luxury). Unscheduled repairs ramp up with age — $0 in year one, climbing to $1,000+ by year five. Always check a vehicle's specific reliability data before buying.

Should I buy new or used to lower TCO?

Buying a 2-3 year old used vehicle from a reliable brand typically delivers the lowest 5-year TCO because you avoid the steepest depreciation years (15–25% loss in year 1) while still getting most of the warranty and modern features. The exception is heavy-incentive new-car deals where dealer cash and 0% financing offset depreciation.

Does this calculator account for opportunity cost on the down payment?

Yes — we apply a 5% annual opportunity cost on the down payment, since that money could otherwise have been invested. This is rolled into the financing line. It's a conservative estimate; if you'd otherwise have paid down high-interest debt, the real opportunity cost could be higher.

Total Cost of Ownership Calculator

See the real 5-year cost of any vehicle — not just the sticker price. Combines depreciation, financing, fuel, insurance, maintenance, repairs, sales tax, and registration into one number you can actually use to compare cars.

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Years of Analysis

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Using $3.45/gal · 5% sales tax

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Vehicle Type

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APR (%)

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MPG (combined)

Annual Insurance

Maintenance Level

Why Sticker Price Lies

The MSRP on a window sticker is the single least useful number for comparing vehicles. Two cars at $35,000 can have 10-year TCOs that differ by $25,000+ once depreciation, fuel economy, insurance class, and reliability are factored in. A $32,000 sedan from a high-resale brand can be cheaper to own over 5 years than a $28,000 sedan from a brand that depreciates fast and needs premium fuel.

Cost	Sticker Price View	True 5-Year View
What you focus on	$35,000	$45,000+
What you actually pay	Down + monthly	Down + interest + fuel + ins + maint + repairs
Worst hidden cost	—	Depreciation ($17k+)
Visible at signing	100%	~30%

The 7 Costs of Owning a Car

Depreciation
The biggest hidden cost — your car loses 50% of value in 5 years. A $35,000 sedan typically depreciates $17,000+ over 60 months.
Financing
Interest paid on the loan plus opportunity cost on the down payment. At 6.5% APR over 5 years, expect $5,000–$7,000 in interest on a $30k loan.
Fuel
Annual mileage divided by MPG, multiplied by your local gas price. Range from $700/yr (EV) to $3,500/yr (large truck).
Insurance
Premiums vary by state, vehicle type, and driver record. National average is $1,800–$2,200/year and rising 6–8% annually.
Maintenance
Routine service: oil changes, tires, brakes, filters. $500–$1,400/year depending on the vehicle, with costs rising 40% after year 5.
Repairs
Unscheduled fixes — water pumps, suspension, electronics. Near zero in year one, $1,000+ by year five on the average vehicle.
Taxes & Fees
Sales tax (0–7.25% by state), annual registration ($150–$250 typical), title fees, and emissions inspections.

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Average 5-Year Cost by Vehicle Type

Based on 12,000 miles/year, a $30k–$45k purchase price, average insurance, and 60-month financing at 6.5% APR. Use as a quick benchmark when shopping.

Vehicle Type	5-Year TCO	Notes
Mid-size Sedan	$42,000–$48,000	Best balance of price and efficiency
Compact SUV	$48,000–$56,000	Modest depreciation, family favorite
Full-size SUV	$58,000–$68,000	Higher fuel + insurance, slow depreciation
Pickup Truck	$55,000–$62,000	Best resale value of any segment
Luxury Sedan	$65,000–$80,000	Steep depreciation + premium fuel
Electric Vehicle	$38,000–$45,000	Lowest fuel & maintenance costs
Sports Car	$52,000–$70,000	Insurance & repairs are the wildcard
Minivan	$48,000–$55,000	Workhorse with strong fuel economy

How to Reduce Your Total Cost of Ownership

Buy 2-3 years used — The previous owner absorbs the steepest depreciation (20–35% by year 3). You get most of the warranty and modern features at 65% of MSRP.
Pick high-resale brands — Toyota, Honda, Subaru, and certain Lexus models retain 55–65% of value after 5 years. Some luxury sedans drop to 30–35%. The brand alone can swing TCO by $10,000.
Keep loan terms short — 84-month loans look attractive monthly but pile on interest. A 60-month loan saves $2,000–$4,000 in interest vs 84 months on the same principal.
Go EV if you have home charging — Fuel savings of $1,000–$1,500/yr plus 30–40% lower maintenance can make EVs the cheapest segment to own — provided you can charge at home.
Run the VIN before buying used — Salvage titles, prior accidents, and odometer fraud can erase $5,000–$15,000 in value. A free VIN check takes 60 seconds and is the highest-ROI step in the entire process.
Match vehicle to mileage — If you drive 25,000+ miles/year, a fuel-efficient sedan or hybrid will dominate any TCO comparison. If you drive 6,000 miles/year, fuel matters less and depreciation matters more.
Shop insurance every year — Drivers who shop their policy annually save an average of $400/year. That's $2,000+ over the life of the vehicle for ten minutes of effort.

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Frequently Asked Questions

What is total cost of ownership?: TCO is the all-in dollar cost of a vehicle over a defined window (usually 5 years), including depreciation, financing, fuel, insurance, maintenance, repairs, sales tax, and registration. It's the only honest way to compare two cars.
Why is depreciation usually the biggest cost?: Most cars lose 20% of value in year one and 50% in five years. On a $35,000 vehicle that's $17,500 evaporated — typically more than fuel, insurance, and maintenance combined.
What's the average 5-year cost of owning a car?: About $45,000 for a mid-size sedan, $50–55k for SUVs, $55–60k for pickups, and $38–42k for EVs. Luxury cars can hit $70–80k.
How accurate is this calculator?: The math is exact for the assumptions you enter. Depreciation uses an industry-standard retention curve adjusted for vehicle type. Maintenance and repair forecasts use US average data. Plug in your real APR, insurance quote, and gas price for vehicle-specific accuracy.
Are EVs really cheaper to own?: Often yes after 5 years. EVs save $1,000–$1,500/yr on fuel and 30–40% on maintenance. Faster early depreciation is offset by federal tax credits in many cases. Use the side-by-side comparison to test for your numbers.
Should I buy new or used to lower TCO?: A 2-3 year old used vehicle from a reliable brand typically wins on 5-year TCO because you skip the worst depreciation years while keeping most of the warranty.

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Found a Used Car? Verify the History First.

A salvage title, prior flood damage, or odometer rollback can wipe out your TCO advantage in a single repair. Run a free VIN check before you sign.

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