Play · total cost of ownership
The Car Total-Cost Iceberg
Updated 2026-07-30 · Sources: 5 · Concept: total cost of ownership, depreciation, counting the cost
Ask someone what their car cost and they name the sticker. That is the tip of the iceberg. Under the waterline sit five years of depreciation, loan interest, insurance, fuel and repairs, and on a new car they add up to more than the sticker did. This tool prices three ways to get to work, side by side, and ends with the number that actually settles arguments: cost per mile.
Predict first
Over five years, the costs hiding under the waterline of a new $35,000 car (interest, insurance, fuel, maintenance, registration) come to roughly:
Pick an estimate, or skip to your own numbers.
Cheapest is not the same as right. A car that strands a parent at midnight is not a bargain, and a reliable vehicle is a tool for work, hospitality and getting to church, all of which Scripture treats as good. The point of the iceberg is not that you must drive the oldest thing on the lot. It is that the sticker was never the price, so the comparison you thought you were making was never the comparison in front of you. Count the whole thing, then choose freely.
Method: five years of ownership. Depreciation comes from a value-by-age curve: a car loses 16% of its original value in year one, then 12%, 11%, 9% and 7%, so it retains about 45% at five years old, as reported by Experian, citing Kelley Blue Book. A used car is priced by moving along that same curve from the age you bought it, which is why its depreciation line is so much smaller in dollars. Past ten years old the curve is our own flat extension (five points of original value a year, landing a ten-year-old car at 20% of its original price) and is an assumption, not a sourced figure. Two cross-checks on the shape: iSeeCars put average five-year depreciation at 41.8% in its March 2026 study of over 950,000 five-year-old cars (57.2% for EVs, 34.2% for trucks), and AAA's trade-in-based measure implies about 56%, so the 45%-retained curve used here sits between them. Loan interest is a standard amortization, M = P·r(1+r)n/((1+r)n−1). Defaults and where they come from, as of 30 July 2026: the running costs are AAA's Your Driving Costs 2025, whose averages are struck over five years and 75,000 miles: insurance $1,694/yr (full coverage) = $141/mo; licence, registration and taxes $813/yr = $68/mo; fuel 13.0¢/mile (regular averaged $3.151/gallon in the twelve months to May 2025); maintenance, repair and tires 11.04¢/mile (AAA fact sheet, PDF). AAA's own all-in figure for a new car is $11,577 a year on an average MSRP of $38,938; this tool lands at about $11,100 a year for a $35,000 car, which is the sanity check that the model is in the right country. Loan rate 7.14%, the average 60-month new-car loan rate at commercial banks, May 2026 (Federal Reserve G.19; auto finance companies averaged 6.1% on a 66-month term). 15% down matches AAA's assumption. The three prices ($12,000 used, $35,000 new, $450/month leased) are illustrative round numbers, not survey figures, and every one of them is editable. For scale, the average transaction price of a new vehicle in June 2026 was $49,758 (Kelley Blue Book / Cox Automotive), so $35,000 is a modest new car. What this model leaves out, in both directions: it charges all three vehicles the same insurance and repair rates, when in truth an older car costs less to insure and more to fix, and a new one the reverse; the lease is modelled as sixty months of payments with no drive-off payment, no equity at the end and no mileage-overage charge, though most leases cap annual miles below 15,000; sales tax at purchase, parking, tolls and the cost of the down payment not being invested are all absent. A teaching model, not a quote.
For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?Luke 14:28
KJV. Jesus is teaching the cost of discipleship, not car buying; the illustration lands because sitting down first was obvious sense to everyone listening. The verse assumes something this page makes literal: that the real cost of a thing is knowable in advance if you are willing to sit down and add it up.