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Auto Total Cost of Ownership

A cheaper sticker price doesn't always mean a cheaper car to own. Compare 2–3 vehicles side by side and see the full 5-year cost picture — depreciation, financing, insurance, fuel, and maintenance — broken down so the real winner is clear.

Last Updated: February 2026

Key Numbers

Avg 5yr Cost (Sedan)

~$42K

Avg 5yr Cost (SUV)

~$51K

Depreciation

~40–50% of TCO

Fuel

2nd largest expense

Ownership Period

Vehicle 1

Vehicle Type

Gasoline33 MPG

Ownership

Purchase Price

5-Year Total$37,024

$617/mo · 61.7¢/mi

Vehicle 2

Vehicle Type

Gasoline27 MPG

Ownership

Purchase Price

5-Year Total$52,223

$870/mo · 87.0¢/mi

5-Year Total Cost of Ownership Comparison

DepreciationFinancingInsuranceFuel / EnergyMaintenance

Cost Breakdown

Category	Economy	Mid SUV
Depreciation	$15,120(41%)	$23,940(46%)
Financing	$3,897(11%)	$5,845(11%)
Insurance	$7,755(21%)	$9,635(18%)
Fuel / Energy	$6,300(17%)	$7,920(15%)
Maintenance	$3,953(11%)	$4,883(9%)
Total	$37,024	$52,223
Cost / Month	$617	$870
Cost / Mile	61.7¢/mi	87.0¢/mi

Economy Sedan(buy)

Depreciation$15,120(41%)

Financing$3,897(11%)

Insurance$7,755(21%)

Fuel / Energy$6,300(17%)

Maintenance$3,953(11%)

Total

$37,024

Per Month

$617

Per Mile

61.7¢/mi

Mid-Size SUV(buy)

Depreciation$23,940(46%)

Financing$5,845(11%)

Insurance$9,635(18%)

Fuel / Energy$7,920(15%)

Maintenance$4,883(9%)

Total

$52,223

Per Month

$870

Per Mile

87.0¢/mi

Year-by-Year Cost

Year	Economy		Mid SUV
	Annual	Cumulative	Annual	Cumulative
Year 1	$9,801	$9,801	$14,675	$14,675
Year 2	$7,936	$17,737	$11,017	$25,692
Year 3	$6,894	$24,631	$9,853	$35,545
Year 4	$6,436	$31,067	$8,714	$44,259
Year 5	$5,958	$37,024	$7,964	$52,223

Depreciation Is the Biggest Hidden Cost

Across all vehicle types, depreciation typically accounts for 43% of total cost of ownership. Luxury vehicles and EVs depreciate fastest, while trucks hold their value best. Buying a 2–3 year old vehicle avoids the steepest depreciation curve.

Sources & Methodology

Data Sources

Depreciation — Kelley Blue Book (KBB) 5-year depreciation data and Edmunds True Cost to Own (TCO) vehicle-type averages. Curves represent the percentage of original purchase price retained at the end of each year of ownership.
Fuel costs — U.S. Department of Energy fueleconomy.gov combined fuel economy ratings by vehicle class. Gasoline priced at $3.50/gallon (national average); electricity at $0.14/kWh (DOE residential average).
Insurance — National average annual premiums by vehicle type derived from the AAA “Your Driving Costs” study (2024/2025 edition) and Insurance Information Institute data. A slight annual decrease is applied as the vehicle ages.
Maintenance — AAA “Your Driving Costs” average maintenance and repair costs by vehicle category. An age-based multiplier increases costs from roughly 60% of the average in year 1 (warranty coverage) to 180% by year 7 as components age and warranty expires.
Financing — Interest costs are calculated using standard amortization. Default APR of 6.5% reflects the national average for new-vehicle loans with good credit (Experian State of the Automotive Finance Market, 2025).

Methodology

Buy path: Total cost = depreciation (purchase price minus residual value at end of period) + loan interest + insurance + fuel + maintenance. The monthly payment is computed with standard amortization; interest per year is calculated from the declining balance.
Lease path: Lease payments are split approximately 70/30 between depreciation and financing (money factor), consistent with industry lease structure. During the lease term, maintenance costs use the year-1 (warranty) multiplier. For ownership periods exceeding the lease term, the model assumes the lessee acquires a replacement vehicle at equivalent cost.
Archetype approach: Vehicles are represented as category archetypes (e.g., “Economy Sedan,” “Mid-Size SUV”) rather than specific makes/models. This provides directionally accurate comparisons while keeping the tool simple. All default values are user-adjustable.
Not included: State/local taxes, registration fees, parking costs, toll expenses, tire replacement, and opportunity cost of the down payment are excluded. EV federal tax credits are not applied to the purchase price. These vary significantly by location and individual circumstances.

All figures are national averages for illustration purposes. Actual costs will vary by location, driving habits, credit score, insurance history, and vehicle condition. This tool is for educational comparison only and should not be used as the sole basis for a vehicle purchase decision.

This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for guidance tailored to your situation.