Two totals, and the difference between them
The page reports a full annual cost and, separately, the money that actually leaves your account. The gap between them is depreciation, and it is worth understanding why it appears in one and not the other. Depreciation is not a payment; it is the erosion of an asset you are holding. You feel it only twice — when you sell, and when you compare what a car costs you against what a year of alternatives would cost. For monthly budgeting, the cash figure is the one that matters. For deciding whether to own the vehicle at all, the full figure is the honest one, and using the cash figure instead is how people conclude that an older paid-off car is nearly free while a newer one is expensive.
The lines, in the order they usually rank
On a reasonably new vehicle the ranking is fairly consistent: depreciation, then insurance, then fuel, then maintenance, with registration, parking and tolls making up whatever is left. On an older, cheaper, paid-off vehicle the order inverts almost completely — depreciation shrinks towards nothing because there is little value left to lose, while maintenance grows as components reach the end of their lives. This is the real trade between old and new cars, and it is a trade rather than a win: newer vehicles lose value quickly and break rarely, older ones have little left to lose and break often.
| Line | What it responds to |
|---|---|
| Depreciation | Age and model far more than mileage |
| Insurance | Where you live, what you drive, your record, your coverage |
| Fuel | Miles, economy and the price that week |
| Maintenance | Age, mileage and how much deferred work has piled up |
| Registration and vehicle taxes | Your state and county, and sometimes the vehicle's value or weight |
| Parking and tolls | Where you keep it and where you drive it |
Why the calculator will not guess your fees
Nothing on this page knows what you pay. Fuel prices, electricity rates, registration fees, personal property tax on vehicles, inspection charges, insurance premiums and tolls all differ by state, county, vehicle and driver, and several of them move month to month. Every one of them is a field you fill in, and the output is only as good as what you put there. Registration in particular defies summary: some states charge a flat annual fee, some scale it by vehicle value, weight or age, some counties levy a separate personal property tax on vehicles, some require annual safety or emissions inspection at a further charge, and several add a surcharge for electric vehicles to replace fuel tax revenue. Any single number offered as typical would be wrong for most readers. Add up twelve months of what you actually paid and put that in.
Cost per mile, and the trap in it
Dividing the annual total by annual miles gives a cost per mile, and the page shows what happens at 5,000, at your figure, and at 25,000. Only fuel moves; everything else is fixed. So a car driven very little produces an alarming per-mile figure, and the correct reading of that is not that you should drive more. It is that a vehicle whose fixed costs run to thousands of dollars a year needs to be doing enough work to justify existing.
If your annual mileage is low, the comparison worth making is against the alternatives you would actually use for the trips you actually take: rental for the occasional long trip, car sharing or ride-hailing for the errands, and whatever transit exists for the routine. Total those honestly, including the inconvenience, and compare against the monthly figure above. Sometimes the car wins on grounds that are not financial at all — being able to leave immediately, carry things, or reach places nothing else serves — and that is a legitimate reason to keep it. It is just not the same as it being cheap.
Making the number better over time
Everything here is an estimate built on figures you supplied, and the two most likely to be wrong are maintenance and depreciation. Maintenance is understated by anyone whose car has not yet needed anything expensive, and depreciation is whatever the market decides rather than whatever percentage you selected. The fix for both is the same and takes very little effort: keep a note of what you actually spend on the vehicle for a year, and check once a year what comparable vehicles of your year and mileage are listed for. Feed both back in. After two cycles the total on this page will describe your car rather than a generic one, which is the only version of it that is worth acting on.
Questions people ask
Should the loan payment go in this calculation?
Only the interest, which is why the field asks for interest rather than the payment. A loan payment is two different things fused into one number: the principal portion is you converting cash into equity in the vehicle, which is not a cost of ownership any more than paying down a mortgage is a cost of housing, and the interest portion is money you hand the lender and never see again, which certainly is. Putting the whole payment in would double-count, because depreciation already captures the value the vehicle is losing while you own it. Your lender's amortisation schedule shows the interest for each year, and it is heavily front-loaded, so the figure falls year over year on a fixed loan.
What maintenance percentage is realistic?
It depends almost entirely on age, and treating it as a constant is the main weakness of the approach. A vehicle in its first few years under warranty may genuinely cost only oil changes and wiper blades, well under two percent of its price. Somewhere between years five and ten the wear items arrive together — brakes and rotors, tires, a battery, suspension components, hoses and belts, fluid services — and the percentage climbs. On an older vehicle, four to five percent of a now-modest price is realistic, and a single major repair can exceed a whole year of it. The percentage form is used here because it scales sensibly across vehicles of very different values, but if you know your actual annual spend, work backwards from it: divide what you spent by the purchase price and use that.
How do I set this up for an electric vehicle?
Tick the electric box, put your efficiency in miles per kWh in the economy field, and put your electricity rate in cents per kWh in the price field. Then adjust two other lines. Maintenance is typically lower, because oil changes, spark plugs, belts, exhaust work and much of the brake wear either disappear or stretch out dramatically — though tires usually go the other way on a heavier vehicle. Registration may be higher, since several states levy an additional annual charge on electric vehicles to substitute for the fuel tax they no longer collect. Depreciation deserves particular attention: the electric resale market has been more volatile than the gasoline one, and the flat percentage options here may not describe it well. Check actual listings for your model.
Is it cheaper to keep an old car or replace it?
Run this page twice, once for each vehicle, and compare the annual totals rather than the repair bills. What usually emerges is that the old car wins by a wide margin for longer than people expect, because its depreciation has largely already happened and a newer vehicle starts losing value immediately. A $3,000 repair is a genuinely bad month, but it is often less than a single year of depreciation on a new vehicle, and it does not recur every year. The arguments for replacing are real but mostly are not about this total: reliability when you cannot afford a breakdown, safety systems that did not exist when the old car was built, or repair costs that have become both large and frequent enough to be a pattern rather than an event. Decide on those grounds, with the cost comparison as context rather than the verdict.