How to use this calculator
Start by entering the purchase price and the car's age in years. Add the current mileage and how many miles you expect to drive each year (the U.S. average is about 12,000). Enter your monthly insurance premium and the maintenance estimate will auto-adjust based on the car's age, but you can override it if you know your specific costs.
If you're financing the car, enter your monthly loan payment. Leave it blank or at zero if you're paying cash. Select your fuel type and adjust the MPG and gas price to match your vehicle and local prices. The calculator estimates depreciation, fuel, registration, and all recurring costs to show your true monthly cost, annual cost, cost per mile, and 5-year total.
Depreciation by car age
| Car Age | Annual Depreciation | On a $20,000 Car |
|---|---|---|
| 0-1 years | ~20% | $4,000/yr |
| 2 years | ~15% | $3,000/yr |
| 3 years | ~12% | $2,400/yr |
| 4-5 years | ~10% | $2,000/yr |
| 6-7 years | ~8% | $1,600/yr |
| 8-10 years | ~5% | $1,000/yr |
| 10+ years | ~3% | $600/yr |
Depreciation rates are averages. Some models (Toyota, Honda) hold value better, while luxury brands tend to depreciate faster.
Hidden costs of used cars
The monthly loan payment gets all the attention, but it's often less than half of the true cost. Insurance for a used car varies widely depending on the model, your age, and your location , sports cars and luxury vehicles cost significantly more to insure than economy sedans.
Maintenance costs escalate as cars age. A 3-year-old car might only need oil changes and tire rotations, but an 8-year-old car may need brakes, suspension work, timing belt replacements, and other expensive repairs. Depreciation is the silent cost, even used cars lose value every year, and that loss is real money even though you don't write a check for it.
Registration and fees vary by state but typically run 1-2% of the vehicle's value. Some states also charge personal property tax on vehicles, which can add hundreds per year. And don't forget about tires ($400-800 every 40,000-60,000 miles), parking costs, and toll expenses if you commute.
Frequently asked questions
What is the true cost of owning a used car?
The true cost includes everything you spend to own and operate the vehicle: loan payments, insurance, fuel, maintenance and repairs, depreciation (loss of value), and registration fees. For a typical used car, the hidden costs beyond the loan payment can add $300-600 per month.
How much does a used car depreciate per year?
Depreciation depends on the car's age. Newer used cars (1-3 years old) still depreciate 12-20% annually, while older cars (8-10 years) depreciate around 5%. After 10 years, most cars depreciate about 3% per year. The sweet spot for value is buying a 3-5 year old car where the steepest depreciation has already happened.
How much should I budget for maintenance?
Budget about $500/year for cars under 3 years old, $900/year for 4-7 year old cars, $1,500/year for 8-10 year old cars, and $2,000 or more for cars over 10 years old. These estimates cover routine maintenance plus some unexpected repairs. Luxury and European cars typically cost more to maintain.
Is it cheaper to buy used or new?
Used cars almost always cost less to own overall, primarily because depreciation is the largest ownership cost and it hits hardest in the first few years. A 3-year-old car has already lost 40-50% of its value, so you avoid that loss. The trade-off is higher maintenance costs and potentially shorter remaining lifespan.