The automotive market, online and off, is saturated with new and used cars that you can review with just a few clicks. Often overlooked during car research, the total cost of ownership is essentially a calculation of all the costs involved in buying and using a car over a period of time.1 This total cost of ownership, or TCO, includes not only the purchase and finance price of the car but maintenance costs, fuel costs, insurance and the depreciation that happens over the entire life of the car. Knowing the total cost of car ownership is a great way to determine if the car is a good deal in the long run.
How much will a car cost me over its lifetime?
Now that you know how the total cost of ownership impacts the vehicle you may select, you might be wondering what your total cost of car ownership will be. This will depend on the kind of car you elect to purchase, but there are some general guidelines and averages for different types of cars that can give you a good idea of how much you’ll pay in the long run.
For a mid-size sedan (e.g. 2018 Honda Accord), the average cost over five years (including depreciation) amounts to $31,473.2 For an SUV (e.g. 2018 Chevy Tahoe), that cost increases to $54,652 during a five-year period. With a minivan (2018 Honda Odyssey), the average cost for five years was $38,789.
For more specialized vehicles, the costs start to fluctuate. A sports car (2018 Ford Mustang EcoBoost) has a total cost of ownership over five years of $36,617. For a truck (2017 Chevrolet Silverado) it comes in at $36,519, and for an electric car ( 2018 Nissan Leaf) the average five-year cost is $32,614.
Depreciation, expenses, and car value
To get a little more in-depth, let’s break it down into cost per facet of ownership over those five years. Below, you’ll be able to consider factors like upkeep, fuel and insurance costs, and how depreciation – the decline in value nearly all vehicles experience over time – affects value.
Now that you know what the total cost of car ownership means, and what it might be for you, you can go into the car buying process a little more informed and ready to get a great deal on a great car.