A car is the second-largest purchase most people make — and one of the most financially consequential. These calculators show you the true cost, help you choose between leasing and buying, and reveal how much cheaper an EV might actually be.
How to use this guide: The sticker price is only the beginning. These calculators show you the total cost of ownership, help you get the best financing, and answer the EV vs gas question with real numbers — before you set foot in a dealership.
AAA estimates the average annual cost of owning a new car in the US at $10,000–$12,000 — roughly $850–$1,000/month including financing, insurance, fuel, maintenance, registration, and depreciation. Most buyers think only about the monthly payment and dramatically underestimate what they're actually committing to. A $500/month car payment with $180 insurance, $120 gas, $80 maintenance, and $50 registration is a $930/month decision — $11,160/year.
Depreciation is the largest cost most buyers ignore. New cars lose 15–25% of their value in the first year and 50–60% within five years. Buying a 2–3 year old used car lets someone else absorb that initial depreciation cliff while you still get a relatively modern, reliable vehicle — often at 30–40% less than the new price.
Get pre-approved by your bank or credit union before walking into any dealership. This does two things: it gives you a rate baseline so you know when dealer financing is a good deal vs a ripoff, and it removes the psychological pressure of negotiating financing on the spot. Dealers make significant profit on financing (called the "dealer reserve" — typically 1–2% above the rate they actually secure), and pre-approval neutralizes that advantage.
Loan term matters more than monthly payment. A 72-month loan at 7% on a $35,000 car costs $8,200 in interest and keeps you underwater (owing more than the car's worth) for most of the loan. A 48-month term on the same car costs $5,300 in interest. If you can only afford the car on a 72-84 month loan, it's a signal the car is priced above what you should be spending.
Leasing is not cheaper — it's a different financial product. You're paying for the depreciation during the lease period plus a finance charge. At the end of the lease you own nothing and must either start over or pay a buyout price. Leasing makes sense if: you want a new car every 3 years, you drive fewer than 12,000–15,000 miles/year (excess mileage fees are steep), and you don't modify your car. For most buyers who want to build equity or drive without mileage stress, buying — especially a used car — is the better long-term financial choice.
The monthly loan payment is only part of the picture. The actual cost of owning a car includes depreciation (the biggest cost, typically 15-25% in year one), insurance, fuel, maintenance, registration, and taxes. On average, a new car costs approximately $900-$1,100/month in total ownership costs according to AAA estimates.
| Cost Component | New Car ($35K) | Used Car ($18K, 3 yrs old) | EV ($40K, after credit) |
|---|---|---|---|
| Depreciation (annual) | $5,250 (15%) | $1,800 (10%) | $4,000 (12%) |
| Loan payment (60mo, 6.5%) | $684/mo | $352/mo | $621/mo |
| Insurance | $175/mo | $130/mo | $195/mo |
| Fuel / Charging | $140/mo | $155/mo | $50/mo |
| Maintenance | $75/mo | $110/mo | $35/mo |
| Total Monthly | $1,512 | $897 | $1,234 |
Estimates assume average driving (12,000 mi/yr), good credit (6.5% auto loan rate), full coverage insurance. Depreciation calculated on purchase price. EV price shown after $7,500 federal credit.
The 3-year-old used car costs $615/month less than the new car — a savings of $7,380/year. Over 5 years, that difference compounds to $36,900. This is the core argument for buying used: someone else absorbs the steepest depreciation, and you get a reliable vehicle at a dramatically lower total cost.
Financial planners generally recommend the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total transportation costs (payment + insurance + fuel + maintenance) under 10% of gross monthly income. On a $75,000 salary ($6,250/month), that means total car costs should not exceed approximately $625/month — a number that is difficult to hit with a new car purchase.