What will this car really cost me?
Add up the loss in value, the interest, fuel, insurance, upkeep and fees over the years you will keep the car, and see the monthly cost that sits behind the loan payment and how much later it makes financial independence.
Loan length
TRUE COST OF THE CARNEAR THE AAA AVERAGE
$1,026a month
Owning this $39,376 car for 5 years costs $61,558: $22,109 in lost value (you would sell it for about $17,267), $6,427 of loan interest and $33,021 for fuel, insurance, upkeep and fees. That is $12,312 a year, $1,026 a month, 82¢ a mile, against AAA's $12,863 a year for the average new vehicle. The loan payment is $665 a month, 65% of the true monthly cost. If that cost is added to your spending and taken from your saving, financial independence comes 5.2 years later.
Per year
$12,312
Per mile
82¢
Total, 5 years
$61,558
Later to independence
5.2 years
Where each year’s $12,312 goes
Loss in value36% of the total
$4k
Loan interest10% of the total
$1k
Fuel20% of the total
$2k
Insurance14% of the total
$2k
Maintenance and tires13% of the total
$2k
Registration and fees7% of the total
$813
The biggest piece is loss in value, $4,422 a year or 36% of the cost. The part of the cost that leaves your account each month as the loan payment is $665; everything else is paid separately or arrives as a smaller resale price.
What the car has cost you after each year
After the first year the car has cost $14,792, mostly the fall in its value; by year 5 the total is $61,558. The first year is the most expensive because a new car loses the most value then.
AAA’s cost per mile at 15,000 miles a year, 2026
| Vehicle | Gas, per year | Gas, per mile | Hybrid, per mile | Electric, per mile |
|---|---|---|---|---|
| Medium sedan | $10,575 | 71¢ | 68¢ | 91¢ |
| Compact SUV | $11,655 | 78¢ | 75¢ | 79¢ |
| Medium SUV | $14,430 | 96¢ | 91¢ | 96¢ |
| Pickup truck | $16,620 | $1.11 | $1.07 | $1.16 |
| Your car, on your inputs | $12,312 | 82¢ |
AAA's 2026 study puts the average new vehicle at $12,863 a year over five years and 75,000 miles. Your car comes to $12,312 a year, 4% below that average. AAA's classes assume 15,000 miles a year; at other mileages the cost per mile changes because depreciation and insurance are spread over more or fewer miles.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Loss in value = price − price × (1 − yearly loss)^years
Loan interest = payments made while you own the car − the principal repaid; the payment is loan × r ÷ (1 − (1 + r)^−n); the balance left at sale is paid from the proceeds
Fuel = miles ÷ miles per gallon × price of a gallon; maintenance = cents per mile × miles; insurance and fees as entered
Total = loss in value + interest + years × (fuel + insurance + fees + maintenance); per month = total ÷ years ÷ 12
- The starting figures come from AAA's Your Driving Costs (2026 headline: $12,863 a year over five years and 75,000 miles, $39,376 average price; 2025 detail for insurance, fees and maintenance), the EPA's Automotive Trends Report 2025 (fuel economy) and the Federal Reserve's G.19 release (loan rate). They are averages, not your quote.
- The car loses 15.2% of its value each year, the same rate every year, so 5 years leave 44% of the price. A real car's loss is faster in the first years and slower later, and varies by model.
- The loan is a fixed-rate loan for the down payment percentage and length chosen, financing the price only; taxes and fees are in the yearly fees figure. If you sell before the loan ends, the balance is paid from the sale. Insurance, maintenance and fees do not rise with age or inflation here.
- For the financial independence comparison the car's yearly cost is added to your spending and subtracted from your saving, on the FIRE pages' assumptions: 7% before inflation, 3% inflation, financial independence at spending ÷ 4%. If part of the cost is already in your spending, the delay is smaller.
- Not counted: the value of having a car, parking, tolls, tickets, a rental or ride-share alternative, and the cost of a second car. An electric car works if you enter its miles per gallon equivalent (the EPA counts 33.7 kilowatt hours as a gallon) and the electricity price per gallon equivalent.
WORKED EXAMPLE · SAMPLE NUMBERS
$39,376 with 15% down leaves a $33,470 loan; at 7.14% over 60 months the payment is $665 and the interest while you own it is $6,427. After 5 years at 15.2% a year the car is worth $17,267, a loss of $22,109. Running costs are $2,441 of fuel + $1,694 insurance + $1,656 upkeep + $813 fees = $6,604 a year. Total $61,558, $12,312 a year, $1,026 a month.
SOURCES
[1]AAA: New Vehicle Ownership Costs Top $12,000 Annually (Your Driving Costs 2026)AAA Mountain West Group, September 15, 2026[2]Your Driving Costs 2025 fact sheet (category costs)AAA Newsroom, September 2025[3]AAA hybrids come out on top in 2026 ownership cost study (per-mile table)Kelley Blue Book, September 2026[4]Consumer Credit - G.19 (new car loan rates at commercial banks)Board of Governors of the Federal Reserve System[5]Automotive Trends Report 2025: Fuel Economy and Technology since 1975U.S. Environmental Protection AgencyHSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
Keep this number honest as your life changes.
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Questions about this result
AAA's 2026 study puts the average new vehicle at $12,863 a year, or $1,071.92 a month, counting the loss in value, loan interest, fuel, insurance, maintenance and fees over five years and 75,000 miles. The loan payment is only part of that; this page builds the total from your own price, loan and driving.
No. It leaves out the loss in value, which is usually the largest cost, and fuel, insurance, upkeep and fees. On the default numbers the payment is about two-thirds of the monthly cost, and it stops when the loan ends while the other costs go on.
Depreciation, the difference between what you pay and what you sell it for. AAA's 2026 study finds a new vehicle loses $4,422 a year on average, more than fuel, insurance or upkeep, and most of it in the first years.
Usually the loss in value is smaller in dollars, since the steepest drop has already happened, and the price and loan are smaller. Lower the price and the yearly loss of value on this page to see the effect. Older cars can cost more to maintain, which the page does not raise for you.
Yes. Enter the car’s miles per gallon equivalent for the fuel economy and the price of electricity per gallon equivalent (the EPA counts 33.7 kilowatt hours as one gallon) for the fuel price. AAA found electric vehicles cost less to fuel but more to buy, finance and insure in its 2026 study.
A car’s yearly cost raises your spending, which raises the amount you need (spending ÷ 4%), and if it comes out of your saving it slows what you put away. The headline stat shows how much later that makes independence on the FIRE pages’ assumptions, if the cost is on top of the spending in your Money Map.
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