Total cost of ownership calculator
Understand the true cost of owning a vehicle across its full ownership period, including depreciation, fuel, finance, and fixed running costs.
Calculator vehiclesLogic updated April 2026
This calculator estimates the total cost of owning a vehicle across an ownership period — depreciation, fuel, insurance, registration, servicing, and finance interest. The headline 'how much does this car really cost?' figure is often two to three times the purchase price once all those line items are added up over a typical ownership horizon.
How this is calculated
Formula
annualDepreciation = (purchasePrice − resaleValue) / years ; annualFuel = km × consumptionL100km / 100 × pricePerLitre ; totalCost = depreciation + fuel + insurance + registration + servicing + financeInterestStep-by-step
- Calculate annual depreciation as (purchase price − estimated resale value) divided by ownership years
- Calculate annual fuel cost as annual km × consumption per 100km ÷ 100 × fuel price per litre
- Sum annual fixed costs: insurance + registration + servicing
- If financed, calculate the monthly payment via standard amortisation; the interest portion of each year's payments is the year's finance cost
- For each year: depreciation + fuel + fixed costs + finance interest = total cost that year
- Sum across all years and add the deposit (the upfront cash) to get the total cost of ownership
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Depreciation is spread evenly across the ownership period (straight-line)
- Fuel price and annual km are constant across years
- Finance is a fixed-rate loan with monthly repayments
- Fixed costs (insurance, registration, servicing) are flat each year
- Finance cost in each year is the interest component of that year's repayments
- Annual registration covers any recurring government fee in the user's jurisdiction
What this calculator doesn’t account for
- Does not model fuel price changes or annual km variation
- Does not include unscheduled repair costs beyond the servicing budget
- Does not include tyres, batteries, or other consumables outside servicing
- Does not factor in tolls, parking, or other usage-based fees
- Does not adjust for vehicle inflation in fixed costs (insurance and registration rise with vehicle value)
- Does not account for tax effects (deductibility for business use)
Worked example
A buyer purchases a $40,000 car expecting to own it for 5 years and resell at $20,000, with a $10,000 deposit and 5-year finance at 7%, driving 15,000 km/year at 7L/100km, fuel at $1.80/L.
| Input | Value |
|---|---|
| Purchase price | $40,000 |
| Resale after 5 years | $20,000 |
| Deposit | $10,000 |
| Finance rate / term | 7% / 5 years |
| Annual km | 15,000 |
| Consumption | 7 L/100km |
| Fuel price | $1.80/L |
| Annual insurance / registration / servicing | $1,200 / $800 / $600 |
Total 5-year cost: ~$45,500 — Annual cost: ~$9,100 — Cost per km: ~$0.61
Depreciation: $20,000 over 5 years = $4,000/year. Fuel: 15,000 × 7 ÷ 100 × $1.80 = $1,890/year. Fixed costs: $2,600/year. Finance interest over 5 years: ~$5,600. Sum to about $45,500 of total cost on a $40,000 car — the ownership cost is roughly equal to a second purchase price over 5 years.
Frequently asked questions
What is total cost of ownership?
The full cost of owning an asset over its useful life, not just the purchase price. For vehicles, it includes depreciation (the largest cost for most owners), fuel, finance interest, insurance, registration, and servicing. TCO is the metric to compare when shopping — a cheaper sticker price with higher running costs can be more expensive over the ownership period.
Which costs are most commonly underestimated?
Depreciation and finance interest. Buyers focus on the monthly payment and forget that depreciation is silently eating value every year — often $5,000–$10,000 per year on new cars. Finance interest is the second blind spot: a 5-year loan at 7% on $30,000 costs about $5,650 in interest, which doesn't show up in the headline price.
How does depreciation affect TCO?
Depreciation is typically the single largest component, especially in the first 3–5 years of ownership. New cars lose 15–25% in year one and another 7–10% per year after that. A car owned for 5 years from new often loses 50–60% of its value to depreciation alone — that's the largest line item in this calculator's output for most scenarios.
TCO per kilometre — why it matters?
Cost per km divides total ownership cost by total kilometres driven. It lets you compare vehicles fairly regardless of price or holding period — a $25,000 city car with low annual km can have a higher per-km cost than a $50,000 SUV driven heavily, because depreciation is amortised over fewer kilometres. Also useful for setting a fair business reimbursement rate for personal vehicle use.
How can I lower TCO?
Buy used (skip the steep first-year depreciation), keep the car longer (depreciation curve flattens after 5 years), shop around on insurance annually, do basic servicing yourself or use independent mechanics, and pay cash where possible to avoid finance interest. The biggest lever is depreciation — choosing a model with strong residual values can save thousands over a 5-year hold.
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