New vs Used Car: Which Costs Less Over 5 Years?
When comparing new and used cars, the sticker price is just the beginning. Over 5 years, you need to factor in depreciation loss, annual maintenance, insurance premiums, and fuel costs to get the true picture. New cars depreciate rapidly in the first few years but tend to have lower repair bills. Used cars cost less upfront but often require more frequent maintenance and may have higher insurance rates depending on the model.
This calculator adds up depreciation loss (purchase price minus 5-year residual value), maintenance, insurance, and fuel to give you the real total cost of ownership for each option.
Frequently Asked Questions
On average, a new car loses 15–20% of its value in the first year and about 10% per year after that. After 5 years, many vehicles retain only 35–50% of their original value.
Yes. If the new car has significantly better fuel efficiency, it can offset some of the higher purchase price over 5 years, especially for high-mileage drivers.