Buying & Selling Calculator
New vs Used Car Calculator
Compare the real cost of a new car vs a comparable used one over your ownership period — depreciation is usually the deciding factor.
Both Options
Used-car rates typically run ~1.5% higher (added automatically).
Used Saves You
over 5 years of ownership
New — Total Cost
$26,600
Used — Total Cost
$14,200
New Depreciation
$19,000
Used Depreciation
$9,600
Total cost = depreciation + loan interest over your ownership period. It excludes fuel/insurance, which are similar for comparable cars.
New vs used: what really decides it.
For comparable cars, fuel and insurance costs are similar — so the real difference in cost of ownership comes down to two things: depreciation and financing. The calculator above compares both over your ownership period so you can see the true gap, not just the sticker difference.
Why depreciation decides the winner
A new car loses about 20% of its value the moment you drive off and roughly 40% within three years. That first-owner depreciation is the single largest cost of owning a new car — larger than fuel, insurance, or interest. Buy the same car at 2–4 years old and someone else has already absorbed that steepest drop, so your annual value loss is far smaller even though you're driving essentially the same vehicle.
The case for buying used
A 2–4 year-old car hits the sweet spot: most of the depreciation is behind it, modern reliability means plenty of life remains, and prices are thousands lower. The trade-offs are a shorter or expired factory warranty and a slightly higher interest rate — used-car loans typically run about 1.5 percentage points above new. Even so, the depreciation savings usually dwarf the extra interest.
When buying new makes sense
New wins in specific cases: you plan to keep the car 8–10+ years, spreading the depreciation across a long ownership period; you want the latest safety technology and a full factory warranty; or a manufacturer is offering a subsidized 0–2% APR that a used loan can't match. For long-term keepers, the higher upfront cost gets diluted every year you hold on.
Certified pre-owned: the middle path
A certified pre-owned car costs more than a private-party used one but adds a manufacturer-backed warranty and a multi-point inspection. It's the compromise for buyers who want to skip the worst of new-car depreciation without taking on the uncertainty of an as-is private sale — worth the premium if peace of mind matters to you.
Frequently asked questions.
Why is used usually cheaper to own?
A new car loses about 20% of its value in year one and ~40% by year three. Buying at 2–4 years old lets the first owner eat that steep early depreciation, so your annual value loss is much smaller.
When is buying new worth it?
New makes sense if you value the full factory warranty, latest safety tech, and lowest financing rates (manufacturers often subsidize new-car loans), and you plan to keep the car 8–10+ years to spread out the depreciation.
What about certified pre-owned (CPO)?
CPO cars cost more than private used but include a manufacturer-backed warranty and inspection — a middle ground that reduces risk while still skipping the worst of new-car depreciation.
How many miles is too many for a used car?
Mileage matters less than maintenance history. A well-maintained car with 120,000 miles can outlast a neglected one with 60,000. Modern vehicles routinely reach 150,000–200,000 miles. Focus on service records, a clean title, and a pre-purchase inspection rather than an odometer cutoff.
Are used cars still a good deal?
Used prices spiked in 2021–2022 and have since eased, but the fundamental math still favors used: letting the first owner absorb the steep first-year depreciation almost always makes a 2–4 year-old car cheaper to own. Run your local prices through the calculator to confirm the gap.
What should I check before buying a used car?
Get a vehicle history report (Carfax or AutoCheck) for accidents and title issues, and pay for an independent pre-purchase inspection — around $100–200 that can save you thousands. Verify service records, check for open recalls, and confirm the title is clean, not salvage or rebuilt.