What is being compared
Ownership cost is the cash consumed by a vehicle over a defined period, less an estimated value that remains at the end. The calculation separates purchase financing from operating cash because an affordable loan payment can coexist with high insurance, fuel, or repairs. The five-year horizon is fixed so every annual field is multiplied by five and every monthly field by sixty.
Formula and timing
Financed principal is price minus down payment. Its payment is amortized at the selected APR and loan term. Operating cost is (insurance + fuel) × 12 × 5 plus annual maintenance × 5. Resale value is price × (1 − depreciation)^5. Net five-year ownership cost is down payment plus all loan payments plus operating cost minus resale value. Depreciation is compounded because each year applies to the value left after the previous year.
Worked example with the displayed units
For a $42,000 car with $6,000 down, the loan starts at $36,000. Insurance and fuel of $180 and $160 cost $20,400 in five years before maintenance. At $900 a year, maintenance contributes $4,500. Twelve-percent annual depreciation leaves about $22,100 of estimated resale value after five years. The browser combines those figures with the loan payments; it does not look up a vehicle price, mileage, or insurance quote.
When to use this result
Use this before choosing between models, changing a down payment, or deciding whether a lower purchase price offsets poorer fuel economy. It can also show the effect of keeping a car longer, although the loan term and five-year horizon should then be reconsidered. Compare vehicles using the same assumptions about driving and coverage; different assumptions are more likely to explain a result than a small difference in sticker price.
Costs and conditions outside the fields
Registration, sales tax, parking, tolls, tires, unexpected repairs, interest on cash used for the down payment, trade-in tax treatment, and financing beyond five years are omitted. Resale value is an assumption, not an appraisal; condition, mileage, local demand, and accident history can dominate it. If the loan lasts longer than five years, the calculation still counts only the first five years of payments but does not subtract the remaining balance, so use a matching term for a clean comparison.
Mistakes that change the answer
Do not put the full price into the loan by also entering it as a down payment. Fuel and insurance are monthly, while maintenance is annual. Enter 12 for twelve percent depreciation, not 0.12. A resale estimate is money recovered at sale, not a reduction to every monthly payment. Check that the depreciation rate is plausible for the age and expected mileage before treating the result as a budget.
Scope of this page
This is a total-cost model for one owned car over five years. A lease-versus-buy tool compares two acquisition contracts, and a loan payment tool only calculates debt service. This private browser calculation is for planning, not an insurance, tax, or purchase recommendation.
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