Compare the total cost of buying new or used
A new car and a used car cost different amounts at different times. The new car usually loses more value in absolute terms, the used car may cost more to maintain and repair, and the two loans can differ in rate and length. A fair comparison therefore needs two real quotes and one shared holding period. Enter the all-in price including tax and fees once, your down payment, the loan rate and term, the resale value you expect at the end, yearly running costs, any extra repair allowance and the cost of selling. Both cars are sold at the end of the same month, right after that month’s scheduled payment, while the loan terms are free to differ: the calculator tracks what you have paid and what you still owe on each loan at that point. The result is the modeled net cost of owning each car. It is not a verdict that either one is the better choice. If you are also weighing a lease, compare leasing with buying with the same discipline.
Gather comparable quotes
Use real quotes rather than advertised headline prices, and include taxes and fees once in the all-in price. Enter the nominal annual rate from each loan offer; it is not the same as an APR that includes fees, so see nominal versus effective annual rates if you are comparing offers. For resale value, look at comparable vehicles of the age, mileage and condition you will have when you sell, and test a range. For running costs, get an insurance quote for each car and use your usual fuel and maintenance spending. The US Consumer Financial Protection Bureau suggests comparing loan offers on the amount, the rate, the length and the payment, and counting taxes, insurance, registration, maintenance, fuel and repairs as part of the cost of owning a vehicle: use it to compare loan terms and total ownership costs. That is US guidance and does not describe loan rules elsewhere. To see what price fits your monthly budget first, check what car price fits your budget.
How the ownership-cost formula works
If you sell before the loan ends, its balance reduces what you keep from the sale. Adding loan principal payments to depreciation would count the purchase twice. We therefore show cash paid, debt still owed and sale proceeds separately, then reconcile them to depreciation plus interest and operating costs. For each car, with price C, resale value V and N months of ownership:
- Net ownership cost = cash paid + debt still owed at sale − resale value
- Cash paid = down payment + loan payments made through month N + running costs + repair allowance + selling cost
- Equivalent form = (C − V) + interest paid + running costs + repair allowance + selling cost, where C − V is depreciation and may be negative if the car is worth more at the end
- Running costs = (insurance + fuel + maintenance + registration per year) × N ÷ 12, held constant with no escalation
The loan payment is the level amount P·r ÷ (1 − (1 + r)−n) for amount financed P, monthly rate r (the annual rate divided by 12) and term n months, or P ÷ n at a 0% rate. Interest accrues on the opening balance and payments fall at month end, using the same amortization engine as the site’s other loan calculators. After the last scheduled payment nothing more is paid, and if the term is longer than your holding period the loan is not forced to pay off early: the remaining balance is simply debt you owe when you sell.
Why monthly payments are not total cost
A lower installment can come from a longer term, which repays principal more slowly and adds interest. A bigger down payment changes when money leaves your account and how much interest you pay, but it does not change depreciation. The average monthly net cost shown here is net ownership cost divided by months owned. It includes depreciation, interest, running costs, repairs and selling costs, so it is not the loan installment and the two should not be compared directly.
Worked example: sell after three years
The inputs below are hypothetical and are the starting numbers in the calculator. Both cars are sold after 36 months.
| Input | New | Used |
|---|---|---|
| All-in price / down payment | 30,000 / 3,000 | 20,000 / 2,000 |
| Loan rate / term | 6% / 60 months | 8% / 48 months |
| Expected resale after 36 months | 18,000 | 12,000 |
| Insurance + fuel + maintenance + registration per year | 1,200 + 1,800 + 300 + 300 = 3,600 | 900 + 1,800 + 1,200 + 300 = 4,200 |
| Additional repair allowance / selling cost | 0 / 300 | 1,000 / 300 |
The new car’s installment is 521.99. Over 36 payments it pays 18,791.48, of which 3,568.98 is interest, and 11,777.49 is still owed at sale. Add the 10,800.00 of running costs and the entered fees and you get cash paid of 32,891.48; adding the debt and subtracting the 18,000 resale gives a net ownership cost of 26,668.98, or 740.80 a month. The used car’s installment is 439.43; it pays 15,819.57 over 36 months with 2,871.19 of interest, leaves 5,051.62 owed and has a net cost of 24,771.19, or 688.09 a month. Under these assumptions the used car costs 1,897.79 less. Neither loan is fully repaid at the time of sale. Multiplying the rounded installment by 36 gives 18,791.64, but the schedule is calculated from unrounded payments, so the loan payments are 18,791.48.
What if the used car needs repairs or sells for less?
The used car in the example already carries a 1,000 repair allowance. Its 1,897.79 advantage would disappear with roughly 1,897.79 of further repairs, about 2,897.79 in total. That figure is how much room the comparison has, not an expected repair bill. Resale value matters as much. If the used car sells for 80% of the estimate, 9,600.00, its net cost rises to 27,171.19 and the new car becomes cheaper by 502.21. At 100% the used car is cheaper by 1,897.79, and at 120%, 14,400.00, the gap widens to 4,297.79. Because the answer can reverse, the calculator shows these three scenarios whenever you compare. They are scenarios, not probabilities or confidence intervals.
Costs this calculator cannot predict
The numbers are only as good as the quotes behind them. The model does not know a car’s condition, warranty, inspection results or reliability, how long repairs would keep it off the road, or whether a safety feature matters to you. It does not fetch prices, rates or valuations, keeps running costs constant, ignores trade-ins and borrowed down payments, and does not weigh what else you could do with the money. It also uses no depreciation statistics or interest-rate data, so it cannot say what is typical. If you are likely to owe more than the car is worth when you sell, understand negative equity and rollover. Results are educational, not financial advice; see the disclaimer.
Frequently asked questions
Is it financially better to buy a new or used car?
It depends on the quotes you enter, how long you keep the car, repairs and resale value. Reliability, features and personal preference matter too, and the calculator does not weigh them.
Why can a cheaper monthly payment cost more overall?
A longer term repays principal more slowly and can add interest. Compare the net costs over the same holding period rather than the installments alone.
How should I estimate resale value?
Look at comparable vehicles of the age, mileage and condition you expect at sale, then test a range using the 80%, 100% and 120% scenarios. The calculator does not fetch or guarantee a valuation.
What if I sell before the car loan is paid off?
The remaining debt reduces your sale proceeds. If the proceeds are negative, you would need extra cash to clear the loan, and the table shows that figure rather than hiding it.
Does this double-count depreciation and loan repayments?
No. Cash paid plus debt still owed minus resale equals depreciation plus interest, running costs, repairs and selling fees. Principal is never added a second time.
Can I compare cash purchases and include used-car repairs?
Yes. Set the down payment equal to the all-in price for a cash purchase and enter any additional repairs once. Repairs are a scenario you choose, not a probability-weighted prediction.