What owning a car really costs each year

A purchase price does not tell you what keeping a car costs. Choose an ownership horizon and separate lost value, running expenses and the cost of borrowing. This avoids confusing cash paid today with the cost consumed each year.

Hypothetical example, in EUR

In the example, a EUR 20,000 purchase and EUR 10,000 resale leave EUR 10,000 depreciation. Five years at EUR 2,000 annual running costs add another EUR 10,000. The annual equivalent is EUR 4,000. At 10,000 km a year this is EUR 0.40/km, not a loan instalment or market forecast.

(20 000 − 10 000) + 5 × 2 000 = 20 000 EUR

What to check before deciding

Repeat the calculation with different resale and mileage assumptions. Keep the horizon equal across cars. Distinguish annual expenses from one-off payments and energy from maintenance. Cost per kilometre is undefined at zero mileage. Enter known sale or repair expenses explicitly rather than assuming one technology always wins.

What can change the result?

Resale, mileage, horizon and interest. Change one assumption at a time to isolate its effect; the comparison is not a forecast.

Try the example and compare your own inputs

Reading the result

Compare cars over the same ownership period. Fuel is only part of cost: include depreciation and annual expenses. Loan principal must not be counted again on top of the purchase price.