Net ownership cost difference$6,477
Saved by buying used over 5 yrs
Example calculation
No, buying used saves $6,477
Buying the used car saves $6,477 over 5 years ($32,058 vs $38,535 net cost) because $7,740 in lower depreciation outweighs the higher used loan APR and extra repair bills.
New car 5-yr net cost$38,535
$642/mo net over 5 yrs
Used car 5-yr net cost$32,058
$534/mo net over 5 yrs
Monthly payment gap+$241/mo
$684 new vs $443 used
Extra new depreciation$7,740
$18,240 new vs $10,500 used Side-by-side breakdown
Total ownership cost breakdown for new versus 3-year-old used car
| Cost component |
Buy new car |
Buy used car |
Year-by-year cumulative net cost
Cumulative out-of-pocket costs minus net vehicle equity at each year of ownership:
Cumulative net ownership cost by year
| Year |
New net cost |
Used net cost |
Resale (new / used) |
Used savings |
Sensitivity to used car price
How the verdict shifts as the used car price moves closer to or further from the new sticker price:
Used car savings across candidate purchase prices
| Used price |
Discount vs new |
Used payment |
Used net savings |
Verdict |
How this calculator works
Many car buyers compare only monthly loan payments, which hides the largest cost of owning a vehicle: depreciation. This calculator computes the complete net ownership cost over your chosen holding period by adding your down payment, monthly loan payments made, sales tax, out-of-pocket maintenance and repairs, and insurance, then subtracting the net equity you recover when selling or trading in the car at the end of the horizon.
What to watch out for
Used cars normally carry a 2 to 3 percentage point higher auto loan APR and higher maintenance bills once the 3-year/36,000-mile bumper-to-bumper warranty expires. However, a new car loses roughly 30% to 35% of its value in the first three years alone. Buying new only beats buying a 3-year-old used car when automaker promotional financing (such as 0% to 1.9% APR) combines with unusually high used-car prices on high-retention models.
Frequently asked questions
When does buying a new car actually cost less than buying used?
Buying new can beat buying a 3-year-old used car when the used model sells for less than 20% below new MSRP, the automaker offers subsidized 0% to 2.9% financing, and used auto loan rates exceed 8% to 9% APR.
Why is depreciation the biggest factor in new vs used car math?
Depreciation is the steepest in years one through three. On a $38,000 new vehicle, losing 48% over five years costs $18,240 in lost value, whereas a $25,000 three-year-old vehicle losing 42% over the next five years loses $10,500.
How much should I budget for repairs on a 3-year-old used car?
According to AAA and Consumer Reports benchmarks, a new car under factory warranty averages $300 to $450 per year for routine oil changes, tire rotations, and filters, while a vehicle in years four through eight averages $1,100 to $1,500 per year including brakes, tires, battery, and out-of-warranty repairs.
Benchmark sources and dates
Starting assumptions are example benchmarks, not binding quotes. Change any input to match your own bills or offers.