How to calculate the total cost of owning a car

Short answer: for a period of one year, add the fixed costs (taxes, insurance, part of the depreciation), the variable costs (fuel, maintenance, tolls, parking) and, if there is one, the loan interest. Divide the total by twelve for the monthly cost, or by the number of kilometers for the cost per kilometer. The values below are illustrative.

Costs that go into the calculation

• Fuel: it depends on the car's consumption, the local price and the kilometers driven.
• Taxes and fees: they vary by country, state and vehicle value.
• Insurance: get quotes for your profile and your car.
• Maintenance: servicing, tires, brakes and the unexpected.
• Depreciation: the loss of the car's value over time, which many people forget because it does not come out of the pocket every month.
• Financing: interest and fees, if any.
• Other: parking, tolls, washing, fines.

Method

1. Estimate how much you drive per year.
2. Calculate fuel: kilometers ÷ consumption (km per liter) × price per liter.
3. Add annual taxes, insurance and maintenance.
4. Estimate depreciation: the car's current value minus its estimated resale value in a year.
5. Add interest and other costs.
6. Divide by the period you want.

Illustrative example

Consider 12,000 km a year, consumption of 12 km/l and a liter at $6: fuel = $6,000. Taxes and fees: $2,000. Insurance: $3,000. Maintenance: $2,500. Depreciation: $5,000. Other: $1,500. Total: $20,000 a year, about $1,667 a month, or $1.67 per kilometer. These numbers are fictional.

If the car is financed, also include the full installment in the monthly calculation, not just the interest, to compare with other transport options. And repeat the calculation once a year: fuel prices, insurance and mileage change, and the result changes with them.

How to use the result

Compare with alternative means, such as public transport, ride apps and rental, using the same criteria. Also compare two different cars by total cost, not just purchase price. See the practical car maintenance and buying checklist on this site to complete the analysis.