Total Cost of Car Ownership Calculator
The full cost of running a car per kilometre and per month, with depreciation included. Depreciation is usually the largest single cost and the only one nobody pays monthly, which is why it goes unnoticed until the car is sold.
Also called: cost of owning a car, car running cost calculator.
$22.02 a kilometre all in, or $22,021.73 a month across 5 years. Depreciation is 667553.63 of the 1321303.63 total, 51% of everything, and it is the only cost nobody pays monthly. The car is worth 532446.38 at the end, having kept 44% of its price. Fuel is 6.56 a kilometre against 22.02 all in, so the cost people track is 30% of the real one. Depreciation is front-loaded, which is why buying at three years old lowers the per-kilometre cost so much.
Cost of ownership
Where the money goes
| Item | Over the period | A month | A kilometre |
|---|---|---|---|
| Depreciation | $667,554 | $11,126 | $11 |
| Fuel | $393,750 | $6,563 | $7 |
| Insurance | $125,000 | $2,083 | $2 |
| Servicing | $75,000 | $1,250 | $1 |
| Parking | $60,000 | $1,000 | $1 |
| Loan interest | $0 | $0 | $0 |
How this is calculated
Depreciation is computed on a declining balance, so a car losing fifteen percent a year keeps about forty-four percent of its value after five and the loss is front-loaded into the first two. That is why the cost per kilometre of a new car is so much higher than of a five year old one, and why buying at three years old removes the steepest part of the curve. Fuel is the cost people track and it is rarely the largest. Adding loan interest completes the picture: financing does not change what the car costs to run but it does change what the ownership costs, and leaving it out understates the total by a substantial margin.
every cost of the period over every kilometre of it, with depreciation the largest term for most owners- D
- Depreciation
- F
- Fuel
- I
- Insurance
Method and limits
What it assumes
- Declining balance depreciation at a constant rate, which is a smoothing of a lumpier reality.
What it deliberately does not model
- Depreciation depends heavily on model, condition and market, and the rate here is an assumption rather than a measurement.
- Repairs outside the service schedule are not included and rise sharply with age.
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Frequently asked questions
- Why is depreciation the largest cost?
- Because it is a share of the purchase price every year, and the purchase price is far larger than the annual fuel bill. It is simply invisible until the car is sold.
- Does buying used change this much?
- Yes. Depreciation is front-loaded, so a three year old car has already taken the steepest part of the curve. The cost per kilometre falls substantially even though everything else stays the same.