What goes into the number

The total combines everything a car takes from you: depreciation, energy, insurance, servicing, repairs, tyres, tax, parking, loan interest, and optionally the opportunity cost of the cash you have tied up in it. The costs are then split into the ones you see and the ones you do not.

Why the invisible costs matter

Depreciation, loan interest and opportunity cost typically account for around half of what a car costs, and none of them arrives as a bill. That is precisely why they get left out of mental budgets — and why people are genuinely surprised when they sell a car and discover what the five years actually cost.

Opportunity cost, if you want it

If you paid cash, that money could have been earning something elsewhere. Setting a rate above zero adds that foregone return to the total. It is a legitimate economic cost and a debatable one to include in a household budget — the field defaults to zero so you can decide.

The comparison that actually decides it

An EV usually costs more to buy and less to run. Whether that is a good trade depends on one calculation: divide the extra purchase price (after any incentive) by the annual saving on running costs, and you get the break-even year. If you plan to keep the car longer than that, the EV wins. If not, it does not.

Where the running saving comes from

Two places. Energy — electricity at a domestic rate is typically much cheaper per kilometre than petrol, though public rapid charging can be several times the home rate and erode most of the advantage. Servicing — no oil changes, no spark plugs, no timing belt, and regenerative braking means brake pads often last far longer.

Where the assumption usually goes wrong

Charging mix. A driver who charges at home overnight and a driver who relies on public rapid chargers are running two completely different cost models with the same car. If you cannot charge at home, model it honestly — set the home percentage low and watch what happens to the break-even year.

Tyres are the other one. EVs are heavier and deliver torque instantly, and tyre wear is often noticeably faster as a result. Assuming parity with a petrol car is optimistic.

Why comparing the monthly payments is meaningless

A lease payment is almost always lower than a loan payment on the same car, and that comparison tells you nothing. The loan is buying you an asset; the lease is renting one. At the end of three years the buyer owns a car worth several thousand and the lessee owns nothing.

The honest comparison subtracts the resale value from the buying side. Total everything you pay, add anything still owing on the loan, then subtract what the car is worth. That is the net cost of buying, and it is the only figure comparable to the lease total.

The mileage trap

Lease agreements come with a mileage allowance, and exceeding it is charged per kilometre at the end. This is where leases quietly become expensive: a driver doing 15,000 km a year on a 12,000 km allowance racks up 9,000 excess kilometres over three years. At $0.15 each that is $1,350 — enough to reverse the comparison entirely. Model your real mileage, not the mileage you hope to do.

What the numbers cannot tell you

Leasing means a newer car, a warranty throughout, and no exposure to what the used market does. Buying means freedom to modify, no mileage limits, no condition inspection at handover, and an asset you can sell whenever you like. Those are real considerations that no calculator prices.

The rule of thumb, and why it is wrong

The common advice is to walk away when a repair exceeds half the car's value. It is a reasonable instinct and a poor decision rule, because it compares a one-off cost against a market price rather than against the alternative.

The alternative to a $2,500 repair on a $6,000 car is not "free". It is spending $21,500 net on a replacement, and immediately taking a fresh depreciation hit that will exceed the repair bill inside the first year. When you compare cost per year of motoring, expensive-looking repairs on old cars win far more often than instinct suggests.

When replacing genuinely wins

• The repair does not buy much time — fixing one failure on a car with several others queued up.
• Running costs differ sharply — an old car needing frequent unscheduled work against something efficient and under warranty.
• You would be replacing it soon regardless, so the repair only defers the same decision at a cost.
• Reliability itself has value to you — being stranded has a cost this calculator cannot price.

The honest caveat

The "extra years it would buy" field is a judgement, not a fact, and it drives the whole result. Be conservative with an old car. If a mechanic tells you the repair fixes this problem but the clutch and suspension are also near the end, put that in the number rather than hoping.

Why the first year is brutal

A new car stops being new the moment it is registered, and the market prices that fact immediately. A widely observed pattern is a drop of around 20% in year one, then roughly 15% of the remaining value each year after. On a $30,000 car that is $6,000 in twelve months — more than most people spend on fuel in three years.

Because the later losses apply to a shrinking balance, the absolute amounts fall each year. Year one costs $6,000; year five costs about $2,200. This is the entire financial argument for buying a two or three year old car: you let the first owner absorb the steepest part of the curve, and you get most of the car's useful life.

What the model does and does not know

The mileage adjustment reflects that high-mileage cars sell for less — above-average kilometres accelerate the loss, below-average slows it slightly. What the model cannot know is your specific model's reputation. Depreciation varies enormously between cars: some hold value remarkably well, while others in unloved segments fall much faster than any general curve. If you can find real used prices for your exact model at three and five years old, use those to set the percentages rather than the defaults.

Consumption units, converted

Three systems are in common use and they do not move in the same direction. L/100km and km/L are inverses of each other — lower is better for one, higher for the other. US and UK gallons differ, so the same car is quoted at different mpg figures either side of the Atlantic. The conversions used here are 235.215 ÷ mpg(US) and 282.481 ÷ mpg(UK) to reach L/100km.

Keeping fuel in proportion

Improving consumption by 10% — smoother driving, correct tyre pressures, removing the roof bars you are not using — saves real money. On a typical car it is worth a couple of hundred a year. Worth doing, but keep it in perspective: on the same car depreciation is usually double the entire fuel bill, so the choice of which car matters far more than how you drive it.

A cost that arrives all at once

Tyres are a modest annual cost that presents as an occasional large bill, which is why they rarely appear in anyone's mental budget until the bill arrives. Spread across the kilometres they cover, a set of four is a small but real cost per kilometre — and it belongs in any honest per-kilometre figure.

What changes tyre life

Enormously variable. Driving style dominates: hard acceleration and late braking wear tyres far faster than smooth driving. Wheel alignment matters — a car pulling slightly out of true can destroy the inner shoulder of a tyre long before the tread is worn. And under-inflation wears the outer edges while simultaneously raising fuel consumption, which makes a monthly pressure check the single cheapest maintenance task there is.

Performance tyres on a powerful car may need replacing in half the distance of touring tyres on a small hatchback. If you have a real figure from your own last set, use it rather than the default.

Repair costs are not linear with age

For the first three years a car is mostly under warranty and needs little beyond scheduled servicing and consumables. Somewhere around years five to eight the wear items start arriving — suspension bushes, exhaust components, cooling system parts, clutch, battery, brake discs. By year ten and beyond, unscheduled repairs typically dominate the maintenance bill entirely.

The model applies a multiplier to your base repair budget by age band: 0.4× under three years, 1.0× to six, 1.8× to ten, and 2.6× beyond. Those are broad-brush figures reflecting the general shape rather than any specific model.

The interaction with depreciation

This rising repair curve is exactly what eventually makes an old car expensive — but note that it is racing against depreciation, which is falling. A twelve-year-old car has almost no value left to lose, so its total cost of ownership can still be far below a new one even with substantial repair bills. The crossover point, where rising repairs finally exceed the depreciation you would take on something newer, arrives much later than most people assume.

The wear cost nobody counts

Ask what a 1,200 km round trip costs and almost everyone answers with the fuel. But those kilometres also use up tyre tread, bring the next service closer, and take value off the car through mileage-based depreciation. On a typical car that wear runs somewhere around $0.10 to $0.20 per kilometre — which on this trip is roughly the same again as the fuel.

This matters most when you are comparing driving against the alternatives. A train ticket that looks expensive against $144 of fuel may look reasonable against the $288 the driving genuinely costs — before tolls and parking.

Setting your wear rate honestly

Run the True Cost calculator for your own car, take the total, subtract fuel and insurance (insurance is paid whether you drive or not), and divide by your annual kilometres. That gives you a personal per-kilometre wear figure far better than any default.

1. The full cost of a typical car

Worked example. A $30,000 petrol car, kept five years, driven 15,000 km a year at 8 L/100km with fuel at $1.50.

That is $589 a month, $19 a day, or $0.47 per kilometre. Half of it is a cost that never appears as a bill. Add a car loan and the invisible share climbs further.

2. Depreciation

The pattern is a steep first year then a shallower decline. At 20% and then 15%: $30,000 → $24,000 → $20,400 → $17,340 → $14,739 → $12,528. Total loss $17,472 over five years, averaging $3,494 a year, with the first year alone accounting for a third of it.

Three practical consequences. Buying a two or three year old car skips the worst of the curve. High mileage accelerates the loss, so a car used heavily costs more than the fuel difference suggests. And depreciation is largely time-based, so a rarely-used car has a terrible cost per kilometre — which is the strongest financial argument for car sharing or rental if you drive very little.

3. Fuel and energy

At 8 L/100km and 15,000 km a year you burn 1,200 litres, costing $1,800 at $1.50. That is $0.12 per kilometre, or $12 per 100 km.

For an EV at 18 kWh/100km: 2,700 kWh into the battery, about 2,970 kWh billed once charging losses are counted. At a home rate of $0.15 that is $446 a year — roughly a quarter of the petrol cost. Charge exclusively on public rapid chargers at $0.45 and it rises to $1,337, and most of the advantage disappears. Where you charge matters more than what you drive.

4. Insurance, tax and the fixed costs

These are paid whether the car moves or not, which makes them brutal on a low-mileage car. $900 of insurance across 15,000 km is $0.06 per kilometre; across 4,000 km it is $0.23. When calculating whether a particular journey is worth driving, fixed costs arguably should not be counted at all — they are already spent. But when deciding whether to own the car at all, they absolutely should.

5. Maintenance, repairs and tyres

Scheduled servicing is predictable: one service a year at $300 in this example. Unscheduled repairs are not, and they climb with age — roughly 0.4× a base budget in the first three years, 1.0× to six years, 1.8× to ten, and 2.6× beyond.

Tyres at $140 fitted, four per set, lasting 50,000 km, across 15,000 km a year: $168 annually, or about $0.011 per kilometre. Small, but it belongs in an honest per-kilometre figure — and driving style can double or halve it.

6. EV versus petrol

Worked example. A $38,000 EV with a $5,000 incentive against a $30,000 petrol car — a real price gap of $3,000. The EV saves on energy and servicing. If the combined running saving is around $1,430 a year, break-even arrives at roughly 2.1 years. Keep the car five years and the EV is comfortably ahead; sell after eighteen months and it is not.

The variables that move this most: your electricity rate and charging mix, the incentive available where you live, and how long you actually keep cars. Depreciation on EVs is also its own question and has been volatile — worth researching for the specific model rather than assuming it matches a petrol equivalent.

7. Buying, leasing and financing

Worked example over three years on a $30,000 car. Buying with $5,000 down at 6%: payments plus remaining loan minus the car's resale value gives a net cost around $15,965. Leasing at $2,000 down and $350 a month with a 12,000 km allowance, while driving 15,000: $14,600 of payments, plus $1,350 in excess mileage, plus $400 in fees — $16,350.

Close, and the excess mileage charge is what decides it. Never compare a lease payment to a loan payment directly; the loan builds an asset and the lease does not.

8. Ways to genuinely spend less

• Buy used, not new. The single largest saving available. A three-year-old car has taken the steepest depreciation already.
• Keep it longer. Depreciation per year falls the longer you own; the expensive years are at the start.
• Choose a model that holds value. Resale performance varies enormously and is worth researching before purchase, not after.
• Shop the insurance annually. Loyalty is rarely rewarded and this is a large, easily-moved cost.
• Maintain properly. Servicing is cheap relative to the failures it prevents, and a documented history protects resale value.
• Check tyre pressures monthly. Free, and it improves tyre life, fuel consumption and safety at once.
• Question whether you need the car at all. Below roughly 5,000 km a year the fixed costs make ownership expensive per journey; rental or car sharing may genuinely cost less.

Every figure on this site comes from what you enter. There is no price database, no valuation service and no knowledge of your local market. Depreciation curves in particular vary enormously by model, and nothing here is financial advice — check real used prices for the specific car you are considering before making a decision that size.