New vs Used Car Calculator

Compare new and used car ownership costs

A lower sticker price or loan payment does not by itself identify the lower-cost vehicle. This comparison uses the same holding period and annual driving distance for both cars. Purchase prices, future resale values, financing terms and operating costs are your assumptions, not live market quotes or predictions. All money is in US dollars and fuel economy is US miles per gallon.

ownership cost = purchase price - end resale value + interest paid during ownership + upfront tax and fees + fuel, insurance and maintenance

Why principal is not counted twice

The purchase price already includes the car's value. Adding every loan payment to depreciation would count the principal twice. Instead, the cost model adds only loan interest accrued through the holding period. A separate cash-flow calculation reconciles the answer: cash down plus tax and fees, payments and operating costs, minus the sale proceeds after paying the remaining loan balance. If the loan outlasts your ownership, that balance is still owed when you sell.

net cost = cash paid during ownership - (resale value - remaining loan balance)

A worked five-year comparison

Consider a $35,000 new car with $20,000 resale after five years, $2,000 upfront tax and fees, $1,500 annual insurance, $500 annual maintenance and 30 US MPG. Compare a $25,000 used car with $13,000 end resale, $1,500 tax and fees, $1,200 annual insurance, $1,000 annual maintenance and 25 US MPG. At 12,000 miles per year and $3.50 per US gallon, annual fuel costs are $1,400 and $1,680.

With cash purchases or an illustrative 0% loan rate for both, the new car costs $34,000 over five years: $15,000 depreciation + $2,000 tax/fees + $17,000 operating costs. The used car costs $32,900: $12,000 depreciation + $1,500 tax/fees + $19,400 operating costs. The used car is $1,100 lower in this scenario. Zero-percent financing is an example, not an available offer; the initial inputs use different illustrative rates.

Resale and repair uncertainty

End resale is the expected sale price at the end of your selected holding period, before repaying the loan. Update this assumption when you change the years owned. It is not today's trade-in offer. A resale assumption above purchase price is allowed and creates negative depreciation; that is an assumption about appreciation, not a promised profit. Compare several resale and repair scenarios rather than relying on a single forecast.

For a current comparable-based estimate, use the used car value calculator. For an explicit future depreciation assumption, use the car resale value calculator. Neither supplies a guaranteed future selling price.

Financing and payment timing

Cash down reduces the financed purchase price. To model a cash purchase, make cash down equal to price; unused loan rate and term inputs then do not affect the result. Otherwise the loan uses fixed end-of-month payments at the annual note interest rate divided by 12. Ownership ends just after the final month's scheduled payment. Payment and interest calculations retain full precision before display rounding; lenders may use daily interest and different final-payment rounding.

Tax and fees are one combined quoted amount paid upfront, not financed or automatically calculated from state law. Enter them once and do not also include them in the vehicle price. This model has no trade-in, negative-equity rollover, balloon payment, extra payment, prepayment penalty, refinance, lease or variable rate. Use the auto loan calculator for a separate financed purchase estimate; it is not a substitute for this ownership comparison.

Operating costs and scope

Fuel cost is annual miles divided by US MPG, multiplied by the shared entered price per US gallon. Insurance and maintenance/repair budgets are fixed annual amounts; operating costs are spread evenly over the holding period. There is no inflation, discounting or opportunity cost of cash. Parking, tolls, recurring registration, selling expenses, incentives, warranty reimbursement and unexpected repair timing are not modeled. Add important omitted costs separately before making a decision. The tool supports 1-10 whole years, 1-120 whole loan months, rates from 0% to 100%, and monetary assumptions up to $1 billion as a numerical limit, not a typical vehicle price.

Check quotes, not just payments

The CFPB's vehicle-budget guidance includes borrowing and ongoing ownership expenses. The FTC's financing guidance recommends comparing the overall deal, not just the monthly payment. Obtain itemized purchase and financing quotes and insurance estimates for both vehicles. This is a scenario comparison, not personalized buying advice, a valuation service or loan approval.