The formula, in full
No black box. Here is every calculation this site performs, why it is built that way, and where it is deliberately simplified.
Total annual cost = depreciation + fuel + insurance + registration +
maintenance + repairs + tyres + financing + other.
Monthly cost = annual cost ÷ 12.
Cost per kilometre = annual cost ÷ kilometres driven per year.
1. Depreciation
Depreciation is the value your car loses while you own it. It is the largest cost for most owners and the one least visible day to day.
This is the straight-line method: the loss is spread evenly across every year of ownership. Real depreciation is front-loaded — a new car can lose 20% in its first twelve months — so straight-line understates year one and overstates year five. Across the full ownership period the total is identical, which is what matters when comparing two cars over the same term.
If your resale value is equal to or higher than the purchase price, depreciation is counted as zero rather than as income. A car that appreciates does not pay your fuel bill until you actually sell it.
2. Fuel and energy
Electric cars use the identical formula with kWh in place of litres. All input is normalised internally to litres per 100 km and price per litre, so entering MPG and a price per gallon produces exactly the same answer as the metric equivalent.
Unit conversions used:
| Conversion | Factor |
|---|---|
| 1 mile | 1.609344 km |
| 1 US gallon | 3.785411784 L |
| 1 UK gallon | 4.54609 L |
| MPG (US) → L/100km | 235.215 ÷ MPG |
| MPG (UK) → L/100km | 282.481 ÷ MPG |
3. Fixed annual costs
Insurance, road tax and registration, servicing, repairs, tyres, financing interest and other costs are entered directly as annual figures and summed. They are not modelled or estimated — you supply them, because they vary far too much by country, vehicle and driver for any default to be honest.
4. Financing
Only the interest counts. The principal you repay is the purchase price, which is already captured by depreciation. Including both would count the car twice and inflate the result by thousands.
5. Totals
When annual mileage is zero, cost per kilometre is undefined rather than infinite, and the calculator shows a dash. All money figures are rounded to two decimals only at the point of display; the arithmetic itself runs at full precision, so the breakdown always sums back to the total.
Where this model is deliberately simple
- No inflation. All figures are in today's money. Over five years this understates later-year costs by a few percent.
- No opportunity cost. The capital tied up in the car could have earned a return elsewhere. Serious buyers should add 3–5% of the purchase price per year under "other" to account for it.
- Straight-line depreciation. Accurate over the full term, optimistic in year one.
- No tax treatment. Business users may deduct costs; this calculator models a private owner.
These simplifications are stated rather than hidden because the goal is a number you can defend, not a number that flatters a decision you already made.
Frequently asked questions
What is the true cost of car ownership?
The true cost of owning a car is depreciation plus fuel, insurance, road tax, servicing, repairs, tyres, financing interest and incidental costs such as parking. For a typical mid-range European car driven 15,000 km a year, it usually falls between €400 and €700 per month. Depreciation alone is often 40–50% of the total, which is why the purchase price matters far more than the fuel economy for most owners.
How is car depreciation calculated?
The simplest method is straight-line: subtract the expected resale value from the purchase price, then divide by the number of years you will keep the car. A €25,000 car worth €12,000 after five years depreciates €13,000, or €2,600 per year. Real depreciation is front-loaded — a new car loses most value in year one — so straight-line understates early years and overstates later ones.
How much does a car cost per month?
Add every annual cost together and divide by twelve. Most owners only count fuel and insurance, which typically accounts for less than half the real figure. Including depreciation, servicing, tyres and repairs usually doubles the perceived monthly cost.
What car costs do people most often forget?
Depreciation is the single most overlooked cost because no money leaves your account each month. After that: tyres (amortised, not just in the year you buy them), unscheduled repairs, the interest portion of a car loan, annual road tax, parking and tolls, and the technical inspection or MOT.
Is it cheaper to buy a new or used car?
Used is almost always cheaper per year of ownership, because the first owner absorbs the steepest depreciation. A three-year-old car has typically lost 40–50% of its value already but retains most of its usable life. The counterweight is repair risk and the loss of warranty cover, which this calculator lets you model by raising the repairs figure.
Does an electric car cost less to own?
Energy and servicing are usually cheaper, but purchase price and depreciation are often higher, and insurance can be too. Switch the consumption unit to kWh/100km and the fuel price to your per-kWh rate to compare honestly. The answer depends heavily on your annual mileage — high-mileage drivers recover the higher purchase price faster.
What is a good cost per kilometre?
For a private car in Europe, €0.30–€0.50 per km all-in is typical. Below €0.25 usually means a cheap, well-depreciated used car driven a lot of kilometres. Above €0.70 usually means a newer or premium car driven relatively little, where fixed costs spread across few kilometres.