New vs Used Car Calculator
Use this free new vs used car calculator to compare the true total cost of owning a brand-new car versus a used car over the years you plan to keep it. Enter each price, yearly maintenance, and depreciation, and the calculator works out both 5-year totals — so you can see whether the new car is really worth it, or if the used one saves you thousands.
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Your results
Estimates. Residual values use the fixed-rate depreciation model below; actual resale values vary by make, model, condition, and market. Loan interest, taxes, fees, and fuel are not included.
How to use this calculator
Start with the two purchase prices — the out-the-door price of the new car you are considering and the asking price of the comparable used car. Then enter the used car's current age, how many years you plan to keep whichever car you buy, and your best guess at annual maintenance for each. The defaults reflect a typical scenario: a new car depreciates about 12% per year while a used car loses about 8% per year, and the used car costs more in yearly repairs.
If you got insurance quotes for both cars, enter the yearly difference in the insurance field — the amount by which the new car's premium exceeds the used car's. Leave it at zero if premiums are similar. Every input recalculates instantly, so you can drag through scenarios: try raising the used car's maintenance to see the repair bill that would flip the winner, or lengthen the ownership horizon to see how keeping a new car longer closes the gap.
How it works
This calculator compares total cost of ownership over your chosen horizon with a simple, transparent model. For each car it estimates a residual value — what the car is worth when you sell it — using geometric depreciation from today's price:
residual = price × (1 − depreciation rate)years
The total cost for each side is then: purchase price + (annual maintenance × years) + (insurance difference × years, new car only) − residual value. The used car has no insurance-difference term because the field is defined as new-minus-used. The page also shows each car's age at the end of the horizon (used age plus years owned) to help you sanity-check the maintenance numbers you entered.
This model is deliberately simple. Real depreciation is not constant — a new car loses the biggest chunk in its first two years — and real resale depends on mileage, condition, brand, and market timing. That is why the depreciation rates are adjustable: if you are comparing a brand that holds value well, lower the rate and watch the results. Anything driven by these rates is labeled an estimate.
Frequently asked questions
Is buying a used car always cheaper than buying new?
Usually, but not always. Used cars win on lower purchase price and slower depreciation, which is why the used option is cheaper in most scenarios. A new car can come out ahead if it has a much better warranty, far lower maintenance needs, or if the used car needs major repairs early on. This new vs used car calculator shows which option wins with your actual numbers.
How does this calculator estimate depreciation?
It applies a fixed annual depreciation rate to each car's purchase price using the formula residual value = price x (1 - rate)^years. The default rates are 12% per year for new cars and 8% per year for used cars, reflecting that new cars lose value fastest in the first years. Real depreciation varies by make, model, and market, so treat the residual as an estimate.
What costs are included in the total?
Each side totals the purchase price plus annual maintenance multiplied by your ownership horizon plus any insurance difference, minus the estimated residual value at the end of the horizon. Loan interest, taxes, fees, and fuel are not included, so adjust the maintenance and price inputs to cover the costs that matter most to you.
Should I include loan interest in the comparison?
If you are financing, yes, it matters. New cars often qualify for lower interest rates, which can narrow the gap. To keep this tool simple it compares cash-equivalent costs. A quick workaround is to add the difference in total loan interest to the purchase price of the car with the more expensive loan.
What ownership horizon should I use?
Five years is a common default because it covers the steepest depreciation period and a full typical loan term. If you plan to keep the car much longer, a longer horizon usually favors the new car, because the depreciation gap matters less over time and warranty coverage helps more.