Ask someone what their car costs and most people name a gas number. Gas is real money, but for a typical paid-off car it is often only a fifth to a third of the total. Here is the full calculation, with formulas you can put in a spreadsheet. If you'd rather click than type, there's a free car cost calculator that runs in the browser.
The eight lines
Per year:
gas = miles / mpg * gas_price
value lost = value_now * rate_by_age
insurance = monthly_premium * 12
payment = monthly_payment * 12
maintenance = oil, brakes, filters, repairs
tires = set_price * miles / 50000
registration = fees, inspection, emissions
parking = parking, tolls, washes * 12
Divide the total by 12 for the monthly cost, and by miles for the cost per mile.
Value lost is the line people skip
A car loses value every year whether you drive it or not. You don't see a bill for it, but you pay it when you sell or trade the car in. Rough yearly rates by age:
| Car age | Value lost per year |
|---|---|
| 0 to 3 years | about 15% |
| 4 to 7 years | about 12% |
| 8 to 12 years | about 10% |
| 13+ years | about 7% |
A $14,000 car at 12% loses about $1,680 a year, or $140 a month. That is more than the gas bill for many drivers.
A worked example
12,000 miles a year, 28 MPG, $3.20 gas, $150/month insurance, no payment, worth $14,000, 4 to 7 years old:
| Line | Per month |
|---|---|
| Insurance | $150 |
| Value lost | $140 |
| Gas | $114 |
| Maintenance and repairs | $83 |
| Parking, tolls, washes | $20 |
| Tires | $13 |
| Registration | $13 |
| Total | $533 |
That comes to about 53 cents a mile. Gas is 21% of it.
Two useful numbers that come out of this
Cost per trip. A 20-mile round trip costs about $3.38 in gas and wear, or $10.66 if you count everything. The first number is what that trip costs you on the day. The second is what owning the car costs per mile, and it's the honest number to use when you decide whether you need a second car, or compare the car with transit or a rideshare.
Gas as a share of the total. If gas is a small share, driving a little less saves little, and the big savings are in insurance (shop it every year) and in how much car you own.
In a spreadsheet
Put the eight inputs in column B, then:
B10 =B1/B2*B3 gas
B11 =B6*CHOOSE(B7,0.15,0.12,0.10,0.07) value lost (B7 = age band 1-4)
B12 =B4*12 insurance
...
B18 =SUM(B10:B17) year
B19 =B18/12 month
B20 =B18/B1 per mile
If you'd rather keep it on paper, my Car Maintenance Log and Expense Tracker (printable PDF) has a service schedule, a fuel and MPG log, and a yearly cost summary that ends in your cost per mile.
These rates are rough averages for planning. Your car's real value loss depends on make, mileage and condition.
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