True Cost of Car Ownership Calculator

The true cost of car ownership is typically 50–100% higher than just the monthly payment. Most people only consider the loan payment, but fuel, insurance, maintenance, depreciation, and registration add up significantly.

Cost categories (the dollar figures are US averages):

• Monthly payment: The loan or lease payment. The US average for a new car has been running well north of $700/month for several years now, and it climbs every time rates do.
• Insurance: Average $1,500–2,500/year. Varies by age, location, driving record, and vehicle type. AAA’s 2025 study used $1,694 for a full-coverage policy.
• Fuel: Depends on miles driven, fuel economy, and gas prices. The average US driver covers about 13,500 miles a year, by the Federal Highway Administration’s count.
• Maintenance: Oil changes, tires, brakes, filters. Average $100–150/month for a car over 3 years old.
• Depreciation: The largest hidden cost. A new car loses 20% of its value in year 1 and about 15% each subsequent year. After 5 years, the average car is worth 40% of its original price. AAA put it at $4,334 a year for the average new car in 2025, more than the insurance and the fuel put together.
• Registration and taxes: Annual registration, plus a property tax on the car in some states. AAA’s 2025 figure is $813 a year, but that spreads the sales tax paid at purchase across five years, so the yearly renewal alone is usually well under it.
• Parking: $0 in suburbs, $200–500/month in cities.

The real formula:

True monthly cost = Payment + (Insurance / 12) + Fuel + Maintenance + (Depreciation / 12) + (Registration / 12) + Parking

What AAA says the average new car costs. AAA’s 2025 Your Driving Costs study put a new car at $11,577 a year, about $965 a month, over five years and 75,000 miles. By type it runs from about 56 cents a mile for a small sedan to 99 cents for a half-ton pickup, which at 15,000 miles a year is roughly $8,400 to $14,800. The panel compares your total with those figures when the currency is set to US dollars.

Cost per mile: Divide total monthly cost by monthly miles to get cost per mile. AAA’s 2025 average was $1.00 a mile at 10,000 miles a year, 77 cents at 15,000 and 66 cents at 20,000, because the fixed costs spread over more miles. The IRS business rate is another yardstick: 72.5 cents a mile for January to June 2026 and 76 cents from July 1, 2026. The IRS revises it at least once a year, so check the current figure.

Buying vs leasing vs used: A 3-year-old used car typically offers the best value. You avoid the steepest depreciation curve while still getting a relatively modern, reliable vehicle. Certified pre-owned programs offer warranty coverage.

Tip: Before buying, calculate the total 5-year cost, not just the monthly payment. A car with lower payments but poor fuel economy and expensive maintenance can cost more overall.