That great automotive web site, Edmunds.com, includes a proprietary True Cost to OwnSM (TCO) calculator. You can enter any new or used car and it will estimate the year-by-year costs, over five years, for all of the following items:
- Depreciation
- Financing
- Insurance
- Taxes & Fees
- Fuel
- Maintenance
- Repairs
We tested this example using the base model of a Volvo S80. The table below compares the cost of buying a new 2008 against the cost of buying a used 2005.
The added cost of buying the car new is more than $7,000 the first year and $19,520 over the five year period. That’s a lot of money just to enjoy the smell of new upholstery for a few weeks!
NEW CAR: 2008 Volvo S80 Base Sedan
Year 1 Year 2 Year 3 Year 4 Year 5 5-yr Total
Depreciation $7,056 $4,624 $4,069 $3,607 $3,238 $22,594
Financing $2,562 $2,072 $1,543 $971 $353 $7,501
Insurance $1,578 $1,633 $1,690 $1,750 $1,776 $8,427
Taxes & Fees $2,511 $179 $160 $145 $145 $3,140
Fuel $3,346 $3,446 $3,549 $3,655 $3,765 $17,761
Maintenance $157 $454 $452 $866 $1,978 $3,907
Repairs $0 $0 $0 $639 $976 $1,615
Yearly Totals $17,210 $12,408 $11,463 $11,633 $12,231 $64,945
USED CAR: 2005 Volvo S80 Base Sedan
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Year 1 Year 2 Year 3 Year 4 Year 5 5-yr Total
Depreciation $2,153 $1,889 $1,662 $1,473 $1,322 $8,499
Financing $1,159 $939 $700 $442 $161 $3,401
Insurance $1,433 $1,483 $1,535 $1,589 $1,645 $7,685
Taxes & Fees $1,078 $76 $68 $62 $62 $1,346
Fuel $2,621 $2,700 $2,781 $2,864 $2,950 $13,916
Maintenance $966 $1,958 $679 $594 $1,257 $5,454
Repairs $658 $1,007 $1,077 $1,152 $1,230 $5,124
Yearly Totals $10,068 $10,052 $8,502 $8,176 $8,627 $45,425
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You can compare any new and used cars you like through the TCO calculator on the Edmunds web site:
