True Cost of Car Ownership Calculator

The Cost Most People Miss: Depreciation

Most drivers think about fuel, insurance, and servicing — the visible cash costs. Depreciation is usually the biggest single line item. A 25,000 car losing 15% a year absorbs 3,750 in year one — more than most households spend on fuel and insurance combined. Over five years, depreciation typically accounts for 50-60% of total cost.

Typical Annual Ranges

Small petrol hatchback: 3,000-4,000/year all-in. Mid-size family car: 4,500-6,500. Luxury or premium SUV: 8,000-15,000. These numbers are three to five times typical public perception because depreciation is so often omitted from the mental model.

What to Do With the Number

Comparing the annual cost to total household income provides context: financial planners suggest total transport costs stay below 10-15% of take-home pay. A 6,000/year car cost requires 40k-60k of take-home to fit that ratio. The calculator surfaces the number; the budget allocation decision remains yours.

Quick example

With purchase price of 25,000 and annual depreciation of 15 (plus annual fuel cost of 1,500 and annual insurance of 800), the result is 6,630.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Purchase Price, Annual Depreciation, Annual Fuel Cost, Annual Insurance, and Annual Road Tax.

What's happening under the hood

Annual depreciation equals purchase price times depreciation rate. Annual running cost equals sum of fuel, insurance, tax, and servicing. Annual total equals depreciation plus running costs. Lifetime total multiplies by ownership years. Results are estimates for illustration purposes only. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Reading payback vs outright cost

Payback tells you when you're break-even, not whether the purchase is a good idea. A short payback on something you barely use is still a loss. Pair the number with an honest count of expected usage.

What this doesn't capture

Purchase decisions rarely come down to payback alone. Reliability, time saved, enjoyment, and alternatives outside the calculation all matter. The figure gives you the money side cleanly so you can weigh it against everything else honestly.