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Is this a good deal?
Take the price, add five years of tax and fees, loan interest, insurance, fuel, and maintenance, then subtract what you could sell it for later. That's your true number. Compare it to the average for the same car: if you're under it, the math is on your side.
Formula
The method is the same on every answer on this page. Take the price, add five years of tax and fees, loan interest, insurance, fuel, and maintenance, then subtract what you could sell it for later. That is your true number. Compare it to the average for the same car: if you are under it, the math is on your side.
Each question on the page applies that same method to one decision. New or used turns on depreciation: a new car loses about 16% of its value in the first year, and that loss becomes the used buyer discount, while the used car may cost more in maintenance, so the two five-year totals are compared side by side. Affordability starts with the monthly budget and adds everything, not just the payment, but insurance, fuel, and maintenance for the specific car, and a common guideline is keeping total car costs under 15 to 20 percent of take-home pay. Leasing is judged by adding up every lease payment plus fees and comparing that total against the five-year cost of buying the same car, including depreciation. Electric cars are judged the same way: charging usually costs far less than gasoline, but EVs often cost more upfront and can depreciate faster, so the five-year total decides.
The three questions that leave this FAQ list keep their full answers on this same page, in the question cards above: when to sell, whether the extended warranty is worth it, and whether to pay cash or finance. Selling turns on the same curve, cars lose value fastest early and then the curve flattens, so selling too often means paying that early depreciation over and over. The warranty turns on comparing its price against realistic repair costs, since warranties are priced so the seller profits on average. Cash or finance turns on comparing the total interest against what the cash could reasonably earn.
Should I buy new or used?
The biggest difference is depreciation. A new car loses about 16% of its value in the first year, and that loss becomes the used buyer's discount. The used car usually wins on depreciation but may cost more in maintenance. Compare both five-year totals side by side and the real gap shows itself.
How much car can I actually afford?
Start with your monthly budget, then add everything, not just the payment, but insurance, fuel, and maintenance for the specific car. That's your true monthly number. A common guideline is keeping total car costs under 15 to 20 percent of take-home pay.
See your true monthly number →
Is leasing a ripoff?
Not automatically. Add up every lease payment plus fees, then compare that total against the five-year cost of buying the same car, including depreciation. Low miles and always wanting something newer can make leasing work. The numbers decide, not the reputation.
Are EVs really cheaper?
Charging usually costs far less than gasoline, but EVs often cost more upfront and can depreciate faster. The honest answer is the five-year total: price minus resale, plus insurance, energy, and maintenance. Run both and compare.
When should I sell my car?
Cars lose value fastest early, then the curve flattens. Selling before a big repair bill or while resale is still strong can save money, but selling too often means paying that early depreciation over and over. Compare your current car's remaining costs against a replacement's five-year total.
Is the extended warranty worth it?
Warranties are priced so the seller profits on average, meaning the average buyer pays more than they get back. Compare the warranty price against realistic repair costs for your car. If it's reliable and you have savings for surprises, the math often favors skipping it.
Is an extended warranty worth it? The full breakdown →
Should I pay cash or finance?
Cash avoids interest entirely but ties up money that could earn elsewhere. Financing spreads the cost but adds interest, at higher rates, that's thousands. Compare the total interest against what your cash could reasonably earn, and the better side shows itself.
Calculation transparency
Scope. Eight car-money questions answered with the same five-year method, each pointing to the page that works the decision out in full. No single worked example lives on this page; the worked numbers live on the pages each answer links to.
Rules and time period. The same five-year method on every answer: price plus tax and fees, loan interest, insurance, fuel, and maintenance, minus what you could sell it for later. A new car loses about 16% of its value in the first year. A common guideline is keeping total car costs under 15 to 20 percent of take-home pay.
Scope and limitations. Educational estimate only. This page answers with the method, not with a quote for a specific car, loan, or driver. Your rate, insurance, fuel use, and resale value will move your total. Run your own numbers on the calculator before you decide. Prices vary by car, shop, and city. Get a written quote for your own car before you decide.
Source links checked November 6, 2026. Figures: The guideline of 15 to 20 percent of take-home pay is stated on the page as a general guide, not linked to a source. The first-year depreciation figure of about 16% follows Kelley Blue Book's published depreciation schedule, which puts year one at 16%.
Primary sources: True cost calculator; New vs used; How much car can I afford; Lease vs buy; EV vs gas. How the numbers are calculated is written down on the methodology page, and every source is listed on the sources page.
Definitions
True cost. The price, plus five years of tax and fees, loan interest, insurance, fuel, and maintenance, minus what you could sell it for later. That is your true number.
Depreciation. The value a car loses. A new car loses about 16% of its value in the first year, and that loss becomes the used buyer discount.
Loan interest. The cost of financing. Financing spreads the cost but adds interest, and at higher rates, that interest can add thousands.
Maintenance. The upkeep a car needs over five years. The used car usually wins on depreciation but may cost more in maintenance.
Resale value. What you could sell the car for later. It is subtracted from the total because it comes back to you.
Lease. All lease payments plus fees, compared against the five-year cost of buying the same car, including depreciation. Low miles and always wanting something newer can make leasing work.
Warranty. Priced so the seller profits on average, meaning the average buyer pays more than they get back. Compare the warranty price against realistic repair costs for your car.
Questions people actually ask
Is this a good deal on a car?
Add up the full five-year picture: the price plus tax and fees, loan interest, insurance, fuel, and maintenance, minus what you could sell it for later. Then compare that number to the average for the same car. If your number comes in under the average, the math is on your side. Run your own estimate with the Driveonomics calculator to see where you stand.
Should I buy a new or used car?
The biggest difference is depreciation: a new car loses about 16% of its value in the first year, and that loss becomes the used buyer's discount. Compare the five-year total cost of each option side by side, the used car usually wins on depreciation but may cost more in maintenance. The Driveonomics calculator lets you run both and see the real gap.
How much car can I actually afford?
Start with your monthly budget, then work backward: the payment is only one piece. Add insurance, fuel, and maintenance for the specific car you are considering, that is your true monthly number. A common guideline is keeping total car costs under 15 to 20 percent of take-home pay. Plug your numbers into the Driveonomics calculator to see the full monthly picture before you shop.
Is leasing a car a ripoff?
Leasing is not automatically good or bad, it depends on the numbers. Compare the total lease cost (all payments plus fees) against the five-year cost of buying the same car, including what you would pay in depreciation. If you drive low miles and always want a newer car, leasing can make sense. Run both scenarios on the Driveonomics calculator and compare the totals.
Are electric cars really cheaper to own?
EVs usually cost less to run, charging can be far cheaper than gasoline, but they often cost more upfront and can depreciate faster. The honest comparison is the five-year total: purchase price minus resale value, plus insurance, energy, and maintenance. The Driveonomics EV vs gas calculator runs that comparison for you.
Related: Want the method behind the answers? See how to calculate what a car really costs.
Related: Want the numbers on one page? Get the free Car Buyer's Cheat Sheet.
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Driveonomics shows you the honest math. What you do with it is always your call.