Cost of Car Ownership Calculator
Cost of Car Ownership Calculator
What a car really costs over the years you keep it — the value it loses, fuel, insurance, servicing, parking and loan interest — in total, per month and per kilometre, with the return your down payment could have earned instead.
Total cost of ownership
A $10,00,000 car, $2,00,000 down, the rest at 9% over 5 years, kept 7 years and sold for 45%; 12,000 km a year at 15 km/l and $100 a litre; insurance $25,000, servicing $15,000 and parking $12,000 a year, rising 4% a year
Total cost of ownership
- P
- the on-road price
- running
- fuel (km ÷ km/l × price) + insurance + servicing + parking and tolls in year 1
- f
- the yearly rise in running costs
- interest paid
- EMIs paid while you own the car minus the loan they repaid
- opportunity cost
- down payment × [(1 + return)Y − 1], shown separately
Worked example
A $10,00,000 car, $2,00,000 down, the rest at 9% over 5 years, kept 7 years and sold for 45%; 12,000 km a year at 15 km/l and $100 a litre; insurance $25,000, servicing $15,000 and parking $12,000 a year, rising 4% a year
Loss in value = 10,00,000 − 45% = $5,50,000
Running costs, year 1 = fuel 80,000 + 25,000 + 15,000 + 12,000 = $1,32,000; over 7 years at +4% = $10,42,575
Loan $8,00,000: EMI $16,607, interest over 5 years $1,96,401
Total = $17,88,976: $21,297 a month, $21.30 a km
The 2,00,000 down payment at 7% for 7 years would have earned $1,21,156
The example kept for different lengths of time
| Kept for | Resale value | Total cost | Per month | Per km |
|---|---|---|---|---|
| 3 years | 65% | $9,23,398 | $25,650 | $25.65 |
| 5 years | 55% | $13,61,356 | $22,689 | $22.69 |
| 7 years | 45% | $17,88,976 | $21,297 | $21.30 |
| 10 years | 30% | $24,81,207 | $20,677 | $20.68 |
Where the money goes
The price tag and the EMI are the parts of owning a car that everyone sees. The total cost of ownership adds the rest: the value the car loses, fuel, insurance, servicing and tyres, parking and tolls, and the interest on the loan. In the example a $10,00,000 car kept for seven years costs about $17,88,976 — $21,297 a month, or $21.30 for every kilometre driven. Here the running costs, $10,42,575, outweigh the loss in value, $5,50,000; for a costlier car or a shorter ownership the loss in value usually comes first. The money you get back when you sell is not a cost, which is why the page counts price minus resale rather than the price.
Resale value is the input to think hardest about. It depends on the brand, the fuel type, the kilometres and the condition, and on how the market treats older cars where you live; the page takes your estimate rather than inventing a depreciation rate. The chart spreads the loss at a steady yearly rate so that it reaches your figure in the last year; in reality a new car loses value fastest in its first year or two. For the value an insurer puts on the car at each age, see the car insurance IDV calculator.
Running costs follow the fuel cost calculator conventions: fuel used = kilometres ÷ km per litre, times the price. They are entered for year 1 and rise each year by the rate you choose. Loan interest counts only what you pay while you own the car; if the loan runs longer, the balance is cleared from the sale. Buying for cash removes the interest but not the cost of the money: cash tied up in a car cannot earn a return, so the page shows the opportunity cost of the down payment separately — $1,21,156 at 7% in the example, and $6,05,781 if the whole price were paid in cash. Whether to borrow or pay cash is the question the car loan vs cash calculator answers; the EMI itself comes from the car loan EMI calculator.
Road tax and registration are inside the on-road price. Fines, major accident repairs and a change of tyres or battery late in life are not modelled unless you add them to the yearly servicing figure. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How do I calculate the total cost of owning a car?
Add the loss in value (price minus resale), all running costs and the loan interest over the years you own it. The example comes to $17,88,976 over 7 years.
What is the cost per kilometre?
Total cost ÷ total kilometres driven: 17,88,976 ÷ 84,000 = $21.30 a km in the example — several times the fuel cost alone of $6.67 a km.
Is buying a car for cash cheaper than a loan?
It saves the interest, but the cash could otherwise have earned a return. The page shows that opportunity cost; the car loan vs cash calculator compares the two properly.
Why is resale value so important?
Because the loss in value is one of the two biggest costs, and the one you know least about in advance. In the example it is $5,50,000 of the $17,88,976 total; ten points more or less of resale moves the total by $1,00,000.
Related calculators
References
- AAA (American Automobile Association). Your Driving Costs (published annually): the cost of owning a car split into depreciation, finance charges, insurance, licence and registration, fuel, maintenance and tyres; depreciation is usually the largest single item in the early years.
- Bureau of Energy Efficiency, Ministry of Power, Government of India. Corporate Average Fuel Efficiency (CAFE) norms for passenger cars, measured on a standard test cycle — real-world fuel economy is usually lower than the rated figure.
- Reserve Bank of India. Key Facts Statement (KFS) for Loans & Advances, circular of 15 April 2024: equated instalments on a reducing balance, with the annual rate ÷ 12 as the monthly rate.
- Central-bank inflation targets used as default inflation by currency: Reserve Bank of India (4% CPI, flexible inflation targeting framework); U.S. Federal Reserve (2% PCE); European Central Bank (2%); Bank of England (2% CPI); Bank of Canada (2%); Reserve Bank of Australia (2–3%); Bangko Sentral ng Pilipinas (3% ± 1). Actual inflation often runs above target.