How Much Does It Really Cost to Own a Car? The Five-Year Receipt

You buy a car for $28,000. Five years later, you sell it for $14,000. So owning it cost you $14,000, right?

Not once you add insurance, registration, parking, fuel and repairs. In our example, the five-year bill comes to $38,000 after getting the resale money back.

Here's where it all went.

One hypothetical used car, bought for $28,000 and sold five years later for $14,000. The receipt shows what the keys really cost.

Hypothetical five-year receipt Used car · cash purchase

Purchase price

$28,000

Running bills over five years

$24,000

Resale value recovered

−$14,000

Net five-year cost

$38,000

$28,000 purchase price + $24,000 running costs − $14,000 resale value

Where the $38,000 went

$14,000 value lost $24,000 running bills

• $14,000 value lost through depreciation
• $24,000 running and ownership bills

Insurance

$6,000

Registration and vehicle taxes

$2,500

Parking

$3,000

Fuel

$8,000

Maintenance and tyres

$4,500

Running bills over five years

$24,000

The resale value is subtracted, never added. $38,000 is the total cost after getting $14,000 back — not $38,000 on top of the purchase price.

Hypothetical example: a $28,000 cash purchase, five years of unchanged annual bills, and a $14,000 resale value. Transaction fees, financing, tolls and other unlisted costs are excluded.

Your car has a bill even when it's parked

First, there's depreciation: the $14,000 difference between buying and selling. It isn't a charge on your bank statement. It's the value you no longer have when you sell.

Now imagine paying these annual bills:

• Insurance: $1,200
• Registration and vehicle taxes: $500
• Parking: $600

Across five years, those bills add $11,500. Add depreciation and you've spent $25,500 without counting a drop of fuel or a single service.

That's the equivalent of $425 a month before you drive anywhere. Your actual bills won't arrive in equal instalments, and the resale value is only an assumption—but the five-year cost still counts.

The layers that arrive while the car is parked, and the ones that start when it moves. Every figure is a five-year average, not a monthly bill.

$633.33

a month

Averaged over five years, with fuel and maintenance included.

• Depreciation$233.33
• Insurance$100.00
• Registration and vehicle taxes$41.67
• Parking$50.00
• Fuel and maintenance$208.33

Parked subtotal

$425.00

Fuel and maintenance

$208.33

Five-year average

$633.33

This is an averaged cost of ownership, not a $425 direct bill that arrives each month. Depreciation, resale, insurance and local prices change with use, time and place.

Monthly figures come from the annual totals: depreciation is the $14,000 value loss spread over 60 months, and each annual bill is divided by 12. No rounding step is carried between rows.

Then the wheels start turning

Allow $1,600 a year for fuel and $900 for maintenance and tyres. That's another $12,500 across five years.

Put everything together and the result is $38,000, averaging $633 a month. At 12,000 kilometres (about 7,456 miles) a year, it works out to roughly 63 cents per kilometre—not just the fuel cost of that drive.

This isn't $38,000 on top of the car's purchase price. The calculation is purchase price + running costs − resale value. If you borrow to buy it, add loan interest and fees, not the full loan repayments again. The Consumer Financial Protection Bureau explains why repayments alone don't capture the cost of ownership.

For an estimate using your own vehicle, mileage and local prices, open the CozyCalcs Car Cost Per Use Calculator.

Is $38,000 unusually high?

There's no useful worldwide average: vehicle prices, insurance, taxes and fuel costs vary by location. For context, AAA's 2026 US study estimated US$12,863 per year to own and operate a new vehicle, using a five-year, 75,000-mile ownership model. That's a US new-car benchmark—not the price of our hypothetical used car or a global average.

What if you paid only for the journeys you needed?

Suppose an alternative ride costs $20. Three rides a week would total $3,120 a year. Eight a week would cost $8,320—more than the example car's $7,600 annual average.

Try your own number of paid rides. The comparison uses the article's $20 ride and the example car's $7,600 annual average.

Paid rides per week

Price per ride

$

3 rides 5 rides 8 rides

Paid rides for a year, at $20 a ride

$3,120

a year

Hypothetical car ownership average

$7,600

Difference

Paid rides $4,480 less per year

Paid rides come in $4,480 under the car average across a year.

Illustration only. Assumes these paid rides replace all journeys and ignores differences in convenience and availability.

Rides are multiplied by 52 weeks. The $20 ride is imaginary and is not a live price from any service; the car figure is the article's $38,000 five-year cost divided by five.

That's a comparison to explore, not a recommendation to sell your car. A paid ride may not cover school runs, long trips, accessibility needs or the freedom to leave whenever you want. And the $20 ride is imaginary: real prices depend on where you live.

If you're keeping the car, use the Fuel Cost Calculator for a specific journey and the CozyCalcs Budget to make room for those irregular insurance and repair bills.

The sticker price tells you what it costs to get the keys. The five-year receipt tells you what it costs to keep them.

All example prices are hypothetical, use one consistent currency and assume a cash purchase, five years of ownership, unchanged annual costs and the stated resale value. They exclude financing, purchase or sale transaction fees, tolls and other unlisted costs. Depreciation and running costs are estimates, not guaranteed future bills. The same arithmetic works in any currency when all amounts use that currency; the displayed dollar figures are not exchange-rate conversions.