New vs Used Car True Cost
Example: New car price: 38000 $ · Used car price: 24000 $ · Used car age: 3 yrs · New car APR: 6 % · Used car APR: 8.5 % · Loan term: 5 yrs · Years to keep: 7 yrs · New insurance/yr: 1800 $ · Used insurance/yr: 1400 $ · New maintenance/yr: 600 $ · Used maintenance/yr: 1100 $
| Used saves you | $10,063 |
| New total cost of ownership | $49,413 |
| Used total cost of ownership | $39,350 |
| New true cost/month | $588 |
| Used true cost/month | $468 |
Worked example
A $38,000 new car kept 7 years might carry a $19,000+ total cost of ownership after resale, while a $24,000 three-year-old version of the same car often lands several thousand dollars lower even after higher maintenance — because someone else already absorbed the steepest depreciation.
Frequently asked questions
Why is a used car usually cheaper to own?
Depreciation is the single largest cost of a car, and it is steepest in the first three years. Buying used lets the first owner absorb that loss, so your dollars stretch further even with somewhat higher upkeep.
When can a new car be the better value?
New cars win when financing incentives are very low, warranty coverage removes big repair risks, and you plan to keep the car well past the loan payoff. The tool captures each of those levers.
Does this include fuel costs?
It focuses on depreciation, financing, insurance, and maintenance — the costs that most differ between new and used. Fuel is similar for the same model year, so it rarely changes the verdict; add it to maintenance if you want it included.