Why does depreciation matter so much in the true cost of a car?

Depreciation is often the biggest single cost of car ownership, yet it's invisible — you don't write a cheque for it. A new car can lose 15–25% of its value in the first year alone, and 50% or more over five years. By including the purchase-to-resale difference in your total, this calculator shows the real economic cost, not just what you hand over at the pump or to your insurer.

What should I use for the annual maintenance figure?

A common rule of thumb is 1–2% of the car's current value per year for a well-maintained vehicle. New cars under warranty may cost less; older cars often cost significantly more. Include tyres, MOT/service, unexpected repairs, and any accessories. If you're unsure, start with 1.5% of the purchase price and adjust as you gather real data.

True Cost of Owning a Car Calculator

Enter your purchase price, expected resale value, and annual running costs to see what your car is actually costing you per month — depreciation included.

How to work out the real cost of owning a car

The sticker price is just the beginning. The true cost of ownership spreads across four buckets over the time you keep the car: depreciation, fuel, insurance, and maintenance.

Worked example. A $30,000 car kept for 5 years and sold for $15,000, with $1,800/year in fuel, $1,200/year in insurance, and $600/year in maintenance truly costs $33,000 over five years — $550/month. That’s nearly double what most people guess when they only think about the monthly finance payment.

The formula

Depreciation = purchase price − expected resale value
Total running costs = (fuel + insurance + maintenance) × years
Total cost = depreciation + total running costs
Cost per month = total cost ÷ years ÷ 12

This is an estimate — adjust the assumptions for your situation

Fuel prices fluctuate, resale values depend on condition and market timing, and insurance varies by driver history. This calculator uses fixed annual figures you provide. Real costs vary year-by-year. Treat the output as a planning benchmark, not a precise prediction. Edit the inputs to model best-case and worst-case scenarios before committing to a purchase.

Tips for getting better numbers

Resale value: Check used-car listings for the same make, model, age, and mileage you expect at the end of your ownership period.
Fuel: Base your annual figure on your actual mileage and the current local price per unit. Divide your typical fill-up amount by the miles since the last fill-up to get your real consumption.
Insurance: Get an actual quote rather than guessing — rates vary enormously by driver age, location, and vehicle.
Maintenance: New vehicles under manufacturer warranty will have lower costs in early years; budget more for years 4+ when servicing typically increases.