Car total cost of ownership (TCO)

What car TCO means

TCO (Total Cost of Ownership) for a car is the sum of every cash flow tied to owning it over a chosen horizon: not the sticker price and not the monthly payment alone. In this calculator, TCO equals: the amount for the car (cash, down payment + loan payments, or lease upfront + payments), plus energy (fuel or electricity), insurance, service, tax/fees and other costs multiplied by the number of ownership years, minus the estimated resale (or return) value at the end of the period. It is the number that answers "what will this car actually cost me", rather than "what does it cost to buy".

The calculator serves three groups: buyers comparing two specific cars (the "Compare Car A vs B" mode), owners deciding whether to keep their current car or replace it, and people weighing petrol against electric. Typical decisions: can I afford this car within my monthly budget, which of two options is cheaper over the full period, and whether a "cheap to buy" used car is really cheap once service and value loss are added.

What is included in this calculator's TCO

The model sums the items and subtracts one, in the order they appear on the form:

• Car cost by finance type: cash (full price upfront), loan (down payment + annuity payments with principal and interest), or lease (upfront + payments × months). Loan payments already include interest, so it is never added twice.
• Energy: ICE/hybrid: (km / 100) × L/100 km × price/L; EV: (km / 100) × kWh/100 km × energy price. Annual × years.
• Insurance: an annual amount multiplied by the ownership years.
• Service, inspection, repairs: an annual amount multiplied by the years; it does not model individual, unplanned breakdowns unless you enter them.
• Tax and fees: registration or annual taxes, depending on your market.
• Other: parking, car wash, tolls, vignettes.
• Resale / return value (subtracted once): for cash/loan a blank field defaults to ~40% of purchase price; for lease a blank field means 0 (enter the return/residual value if you know it).

The energy type changes the fields: for petrol, diesel and hybrid you enter consumption and fuel price (for a hybrid, use a blended annual consumption covering both combustion and electric driving); for an EV you enter energy use in the header unit (kWh/100 km or kWh/100 mi) and the electricity price. The model does not distinguish home charging tariffs from fast-charging rates: the result is indicative.

How to read TCO, monthly cost, and cost per km

How to read TCO, monthly cost, and cost per mile

The calculator shows three complementary numbers, each answering a different question:

• Total cost (TCO): every amount spent and recovered over the ownership period. The right number for comparing "option A vs. option B" over the same time horizon.
• Monthly cost (average): TCO divided by the number of months. Useful for checking against a monthly budget, but it is an average: payments, insurance, and service do not fall evenly in every single month.
• Cost per km: TCO divided by total mileage over the period. The best number for comparing two cars driven different annual distances, since it neutralizes differences in distance covered.

For a household budget, monthly cost usually matters most. For judging "is this car efficient given how I actually drive", cost per km is the better metric.

Comparing two cars with TCO (A vs B)

The mode toggle at the top of the form lets you cost a single car or two side by side. In "Compare Car A vs B" mode you fill in two panels: each with its own energy type, finance path and costs: and the calculator runs both through the same formula and shows which one is cheaper. The two cars can differ in everything: petrol vs electric, loan vs cash, new vs used, different annual mileage.

The comparison result has four parts: a winner line (which car has the lower TCO and by how much), mini cards for A and B with TCO, monthly cost and cost per km, delta cards (Δ TCO, Δ monthly, Δ per km), and a decision sentence naming the category (capital, price/financing/resale, energy, or fixed costs) that explains most of the gap. A dual chart shows the A and B bars side by side for each category, so you can see instantly where the difference comes from. Two cars can reach a similar TCO for completely different reasons.

EV vs petrol/diesel cost logic

When comparing an EV with a combustion car, the energy cost is usually lower for the EV: electricity per 100 km can be cheaper than fuel, especially with home charging and high mileage. But energy is typically not the largest TCO line. The result is more often decided by purchase price (EVs can be pricier upfront), insurance (sometimes higher for a more expensive car), and resale, whose trajectory for EVs can be less predictable than for well-established combustion models.

So an honest comparison costs both cars in full, not just "how much to drive 100 km". The calculator computes energy directly from your inputs (kWh per 100 distance units × electricity price), but it does not model battery degradation, winter range loss, battery replacement cost, or the difference between a home tariff and fast charging. Enter the EV resale value yourself if you know the market: the default ~40% is a simplification shared across all powertrains. The conclusion varies: at high mileage the EV's cheaper energy can catch up with a higher price; at low mileage a combustion car with a lower purchase price often wins.

Cash vs loan vs simplified lease

The finance type changes how the "for the car" part is calculated:

• Cash: the full purchase price is paid upfront, with no interest. If you enter a down payment smaller than the price, we still assume the rest is paid in cash right away (cost of capital = full price). TCO = price + running costs − resale.
• Loan: down payment plus a fixed annuity payment based on the interest rate and loan term. The payment total includes interest, shown separately in a note so it is not counted twice. This matches the classic car-on-loan TCO model.
• Lease (simplified): upfront payment plus monthly payment × number of months (to the end of the lease or ownership period, whichever is shorter), minus a return/residual value if you enter one (blank = 0). This is a sketch, not a full model: it does not include a money factor, mileage cap, excess-wear fees, or a buyout. Deliberately simple, to compare orders of magnitude: not to replace a leasing quote.

Watch out for double counting: with a loan the interest is already inside the payments, and with a lease the financing cost is already inside the monthly payment: do not add it separately. For an exact payment-only comparison, use the "Leasing vs loan" calculator.

Hidden costs drivers overlook

The biggest underestimates in back-of-envelope math are usually not fuel: fuel is the most visible cost because you pay for it weekly. The costlier items tend to be the ones that show up less often or are buried inside another number:

• Value loss and resale: underestimating depreciation, or ignoring resale altogether, makes TCO look artificially low. In this calculator resale is the only item that lowers cost: understating it inflates the real ownership cost.
• Interest "hidden" inside the payment: a lower monthly payment from a longer loan term often means more total interest. The results show total interest separately in the note under the cost breakdown, so it stays visible.
• Insurance in big cities: the same car can cost 2-3× more to insure in a major city than in a rural area; it is an easy line item to misjudge from memory.
• Tyres, parking, tolls, car washes: small individually, but often several hundred to a few thousand currency units per year in total.
• Cost of capital: money put into a down payment (or the full purchase price if paid in cash) is not working anywhere else. This calculator does not model that as an opportunity cost, but it is worth remembering when comparing buying vs. leasing.

How mileage changes the result

Annual mileage changes which costs dominate TCO. At low mileage (roughly 6,000-9,000 km/year), energy is a relatively small line item: fixed costs dominate instead: payments, insurance, tax, and depreciation, all paid regardless of whether the car is driven or parked. At high mileage (20,000-30,000 km/year and above), energy and mileage-driven service scale up proportionally and can overtake the fixed costs.

The practical consequence: at low mileage, a consumption gap between two cars has only a small effect on TCO: purchase price, resale, and insurance matter more. At high mileage that same gap turns into real hundreds or thousands of currency units per year, and cost per km becomes a more reliable metric than monthly cost. That is also where an EV's cheaper energy helps most.

Why value loss can matter more than fuel

The instinct "buy an efficient car to spend less" often misjudges what actually drains the most money in TCO. A new, expensive, efficient car can lose more in value over 5 years than an older, cheaper, thirstier car spends extra on fuel over the same period: especially at low or medium mileage.

A simple worked number: a 2 L/100 km gap at 12,000 km/year and a fuel price of 6.5 currency units per liter works out to roughly 1,560 currency units per year in extra fuel cost. The depreciation gap between two cars starting at the same price can easily exceed that amount in year one alone, since new cars typically lose the most value right at the start. The takeaway: when comparing two cars, look at both factors together: the "Resale value" field and the compare mode do that automatically.

Limits and assumptions of the model

• Fuel and electricity prices are held flat for the whole period: the calculator does not forecast price changes or inflation.
• Service and repairs are a single averaged annual amount you enter: the model does not simulate individual, irregular breakdowns; add a reserve inside "maintenance" if you want one.
• If you leave resale value blank, the calculator estimates it at ~40% of purchase price (for a lease a blank field = 0): a simplification, not a market forecast.
• There is no time discounting (NPV) and no inflation applied to running costs: every total is nominal.
• For EVs the model computes energy directly but does not account for battery degradation, winter range loss, battery replacement cost, or the difference between home and fast charging.
• For hybrids, enter a blended annual consumption covering both driving modes: the model does not split combustion and electric kilometers.
• The loan payment is a fixed annuity; the lease is simplified: no money factor, mileage cap, wear fees, or buyout.

Examples

Worked examples below use metric figures (km, L/100 km) to illustrate the formula. Enter header units in the form.

Article examples below are metric illustrations. Preset buttons and the form use header units (mi, mpg, gal, kWh/100 mi): ICE energy uses mi÷mpg×$/gal, not a relabelled L/100 km formula.

These examples use the exact same formula as the form: reproduce them by clicking a scenario button above and pressing "Calculate". Amounts are currency-neutral; in your case they will appear in the currency set in the page header.

• A. City, small car, low mileage (petrol, loan): price 65,000, down payment 20,000, loan at 8% for 4 years, 8,000 km/year, consumption 5.5 L/100 km, fuel 6.5/L, insurance 2,200/year, maintenance 1,800/year, tax 200/year, other 600/year, 5-year period, resale 28,000. Total loan payments come to about 52,730 (of which about 7,730 is interest). TCO ≈ 83,030, monthly ≈ 1,384, cost per km ≈ 2.08. Takeaway: at low mileage, financing and depreciation outweigh the fuel bill by itself.
• B. Family, SUV, high mileage (petrol, loan): price 140,000, down payment 30,000, loan at 8.5% for 5 years, 25,000 km/year, consumption 8.5 L/100 km, fuel 6.5/L, insurance 3,500/year, maintenance 3,200/year, tax 400/year, other 1,800/year, 5-year period, resale 70,000. Total loan payments come to about 135,410 (about 25,410 interest); fuel about 69,060. TCO ≈ 208,970, monthly ≈ 3,483, cost per km ≈ 1.67. Takeaway: at 25,000 km/year fuel grows, but the high resale keeps cost per km low.
• C. Used, cash, pricier service: price 28,000, cash (no loan), 14,000 km/year, consumption 7.2 L/100 km, fuel 6.5/L, insurance 2,800/year, maintenance 4,500/year, tax 300/year, other 900/year, 4-year period, resale 12,000. TCO ≈ 76,210, monthly ≈ 1,588, cost per km ≈ 1.36. Takeaway: a low price and zero interest are not enough when maintenance runs more than double Example A.
• D. EV, city, cash: price 140,000, cash, 12,000 km/year, consumption 16 kWh/100 km, electricity 0.8/kWh, insurance 3,000/year, maintenance 1,500/year, tax 300/year, other 900/year, 5-year period, resale 56,000. Energy over the period is about 7,680 (far below fuel in Example A) and service is lower, but the high purchase price dominates. TCO ≈ 120,180, monthly ≈ 2,003, cost per km ≈ 2.00. Takeaway: an EV's cheap energy and low service do not always win when the purchase price and value loss are high.
• E. Compare: petrol vs EV (takeaway): use the "Compare: petrol vs EV" button. At 15,000 km/year a petrol hatchback on a loan vs a pricier EV paid in cash land close together: the result is driven mainly by capital (price and resale), not energy alone. Change mileage to 30,000 km/year and the EV's cheaper energy advantage grows. Click the preset and "Calculate" to see the Δ differences.
• F. Compact, simplified lease: price 90,000, upfront 18,000, payment 1,900 for 3 years, 12,000 km/year, 6.2 L/100 km, fuel 6.5/L, insurance 2,400/year, maintenance 1,600/year, tax 250/year, other 700/year, 3-year period, return 35,000. Lease payments total 68,400. TCO ≈ 80,760, monthly ≈ 2,243, cost per km ≈ 2.24. Takeaway: this lease is an order-of-magnitude sketch, not a money-factor quote.
• G. Hybrid, cash, blended economy: price 110,000, cash, 15,000 km/year, 4.5 L/100 km (combustion plus electric in one field), fuel 6.5/L, insurance 2,800/year, maintenance 1,700/year, tax 250/year, other 800/year, 5-year period, resale 50,000. Energy about 21,940. TCO ≈ 109,690, monthly ≈ 1,828, cost per km ≈ 1.46. Takeaway: low blended consumption keeps cost per km down, but cash and value loss still dominate.
• H. Diesel, loan, very high mileage: price 120,000, down 25,000, loan at 7.5% for 5 years, 30,000 km/year, 5.8 L/100 km, fuel 6.2/L, insurance 3,200/year, maintenance 2,800/year, tax 350/year, other 1,200/year, 5-year period, resale 55,000. Loan payments about 114,220 (about 19,220 interest); fuel about 53,940. TCO ≈ 175,910, monthly ≈ 2,932, cost per km ≈ 1.17. Takeaway: at 30,000 km/year energy grows, but cost per km comes out low because of the distance.

Model assumptions (at a glance)

• Fuel and electricity prices: held flat for the whole period, with no inflation.
• Resale: a blank field defaults to ~40% of purchase price (lease: 0); enter your own figure if you know the market.
• Loan: fixed annuity; interest is already in the payment total: never add it again. Lease: payments × months + upfront − return value, a simplified model.
• Cash: the full price is paid upfront, cost of capital = full price.
• EV: energy computed directly from kWh per 100 distance units and electricity price; no battery degradation, winter range loss, or replacement cost.
• Hybrid: one blended annual consumption covering combustion and electric driving.
• No time discounting (NPV) and no inflation: the result is a nominal total.