How CarCost follows the money.
Every result is an estimate assembled from visible inputs. This page explains the formulas, default profiles, limitations, and update policy so the answer can be challenged—not merely accepted.
Both options use the same ownership years and annual miles.
Upfront and monthly differences occur when the buyer would actually pay them.
The model includes vehicle value and any loan balance at the comparison date.
Broad estimates can be replaced with vehicle-specific quotes and research.
What each result means
| Result | Method |
|---|---|
| Loan payment | Standard fixed-rate amortization using amount financed, APR, and number of monthly payments. |
| Remaining balance | The amortized principal still owed in the month the ownership period ends. |
| Trade-in equity | Trade value minus current payoff. A negative result is added to the purchase financing. |
| Energy cost | Annual miles divided by MPG times gas price, or annual miles times kWh/100 miles divided by 100 times electricity rate. |
| Depreciation | Purchase price minus estimated ending value. Model year determines approximate age at purchase, and the age-specific retention curve determines how much value is expected to remain over the selected ownership period. |
| Mileage & warranty | Mileage adjusts wear reserves and auto-suggested basic coverage. Hyundai U.S. suggestions use 5 years / 60,000 miles; other makes retain an unverified generic 3 years / 36,000 miles. Model year only approximates the in-service date. Manually entered remaining months override the generic mileage cap. Added used-car coverage is modeled as extra months after factory coverage. Verify actual terms, deductibles, exclusions and transfer eligibility. |
| Repair reserve during coverage | Unchecked, the repair reserve begins after modeled factory plus added coverage ends; that assumes the repair is covered. Check the option to budget uncovered repairs throughout ownership. Routine maintenance always applies, and the separate one-off stress test is always an uncovered bill. Coverage is not a promise of free repairs. |
| Vehicle models and current prices | Year, make and model menus use a free EPA catalogue of U.S.-listed configurations. A selected supported configuration applies combined MPG or electric kWh/100 miles—not MPGe as consumption. Marketing trims and some vehicles are missing; manual entry remains available. Dated manufacturer MSRP is limited to separately verified records. No live used-price feed is connected. Warranty and brand/age depreciation remain broad editable assumptions, not model-specific forecasts. |
| Per-option vehicle tax | All 50 states plus DC have source-linked purchase-tax planning presets. Selected rules include new/used distinctions, trade-in eligibility, local caps, excise taxes and private-sale price/age bands. Local rates and assessed values may need your input; missing values are flagged. An exact tax quote replaces the preset. Loan payoff does not reduce a qualifying trade allowance. Exemptions, taxable dealer fees, interstate credits and annual property/registration taxes are not universally inferred. Leases use a separately entered monthly tax rate and separate upfront tax amount from your quote, never the state purchase-tax preset. Upfront tax repeats at each replacement lease. Do not re-enter tax capitalized into the monthly quote; include fee taxes in the appropriate quoted amount. Unreviewed lease taxes are flagged. |
| Major-repair stress test | An optional, deterministic single repair bill added in a chosen ownership year. CarCost does not publish repair probabilities; the stress test shows how one large uncovered bill changes the comparison instead of hiding risk inside an average. |
| Cash paid during comparison | Down payment or cash purchase, loan or lease payments, taxes and fees, fuel or charging, insurance, maintenance, repairs, and applicable lease charges actually paid during the selected period. Maintenance rises about 4% and post-warranty repairs about 6% for each year the vehicle ages; fuel, electricity, and insurance are held at today's rates. |
| Net vehicle equity | Estimated vehicle value at the end minus any vehicle loan balance still owed. A lease has no ending vehicle equity. |
| Net ownership cost | Upfront and recurring cash outflows, plus remaining debt when applicable, minus estimated ending vehicle value. |
| Comparison savings / investment account | Both options receive the same vehicle budget at each point in time. The option spending less deposits the difference when it occurs. Deposits earn the selected return through the comparison end date. |
| Money available at the end | Comparison cash or investment account plus net vehicle equity. Other money common to both choices is omitted because it cancels out. |
Financing is modeled month by month.
Fixed-rate loan payments use the standard amortization formula. A 0% loan divides principal evenly across the term. The model tracks the remaining principal each month so an early sale includes debt that has not disappeared merely because the comparison ends.
A lease uses adjusted capitalized cost, residual, money factor, term, and stated fees. When the selected horizon exceeds one lease, CarCost begins a similar replacement lease rather than pretending transportation becomes free after the first return date.
Resale value is a range-worthy estimate.
Default five-year profiles are based on manufacturer resale rankings and broad powertrain studies. The entered model year is converted into an approximate age at purchase. Published all-vehicle retention points at years 3, 5, 7, and 10 shape the age curve; the manufacturer and powertrain profile scales that curve to its researched five-year value.
Ending value is calculated from the vehicle's position on that curve when purchased to its position when sold. A 2015 and a 2025 vehicle therefore do not lose the same percentage over an identical holding period. Values after year 10 taper toward a long-term floor rather than continuing the new-car rate forever. Users should still replace the estimate with model-specific evidence and test a conservative case.
True cost has a baseline and an ending-position view.
Net ownership cost measures the dollars paid for the vehicle and its use, less the value still owned at the end. That is the default because it does not assume the buyer invests money that remains available. Every figure is in today's dollars: running costs are not inflated over time (aside from the age-related rise in maintenance and repairs), and any investment return you apply is a nominal, pre-tax rate.
CarCost lets you decide whether to track the starting cash difference, later monthly differences, or both. Each selected difference enters the lower-cost option's comparison account when it becomes available—not at the end. You can model that account as cash earning 0% or apply an adjustable hypothetical return. The final view adds the account balance to net vehicle equity. This is an opportunity-cost scenario, not a forecast: taxes, fees, inflation, volatility, and the risk of loss are not modeled.
Research used to shape defaults and explanations
What the calculator cannot know for you
- Future resale prices, investment returns, fuel prices, electricity rates, or repair events.
- Exact taxes, registration rules, incentives, lease mileage charges, and insurance quotes for every location.
- The condition, accident history, battery health, options, or service history of a specific vehicle.
- The value you personally place on safety equipment, reliability, convenience, or driving experience.
CarCost is an educational planning tool, not a lender quote, appraisal, investment forecast, or recommendation to buy a particular vehicle. See the Terms of Use for the full disclaimer.