New vs Used Car Calculator
Two cars, two loans, and the years you keep them
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the price of the new car and of the used one you are considering. iSeeCars' August 2026 average for a three-year-old car was $32,651.
- 02
Enter how long you will keep it, your down payment and the loan term. The page applies the same down payment and term to both cars, so the only differences are the cars and their rates.
- 03
Enter each loan rate. Experian's Q2 2026 averages were 6.35% new and 11.19% used, and your credit tier moves both.
- 04
Add your sales tax rate, a maintenance estimate for each car and how much less the used car costs to insure.
- 05
Read which costs less over the years you keep it, then the year-by-year table of cost so far and what each car is worth. Adjust the used car's depreciation assumption if you expect it to hold its value better or worse.
Formula
For each car: sales tax = price × rate. Loan = price − down payment. Interest = the interest actually paid inside the years you keep the car. Value at the end = price × annual retention raised to the years kept, where the new car's retention comes from iSeeCars' 41.8% five-year loss and the used car's from your annual depreciation assumption. Depreciation = price − value at the end. Running costs = (maintenance + extra insurance) × years, with the insurance difference charged to the new car. Total cost = depreciation + tax + interest + running costs. The saving is the difference between the two totals.
Example
A $45,000 new car against a $32,651 used one, kept five years, each with $5,000 down over 60 months, at 6.35% new and 11.19% used, a 7.53% tax rate, maintenance of $1,656 a year new and $2,400 used, and $300 a year less to insure the used car. The new car loses $18,810 to depreciation and pays $6,790 of interest, $3,389 of tax and $9,780 of maintenance and insurance: $38,769 in all. The used car loses $13,690 and pays $8,578 of interest, $2,459 of tax and $12,000 of maintenance: $36,727. The used car saves $2,042. The payments are $780 and $604 a month, and at five years the new car is worth $26,190 and the used car $18,961. The used car is cheaper in every year of the table, by $1,204 after the first.
Definitions
- Depreciation
- The value a car loses while you own it. For a new car it is usually the largest cost of ownership.
- Annual retention
- The share of its value a car keeps each year. The page derives the new car's from iSeeCars' measured five-year loss and takes the used car's from your assumption.
- Total cost of ownership
- On this page, depreciation, sales tax, loan interest, maintenance and the insurance difference over the years you keep the car.
- Credit tier
- The band your credit score falls in. Experian's run from super prime (781 and up) to deep subprime (300 to 500), and used-car rates spread further across them than new-car rates do.
- Factory warranty
- The manufacturer's repair coverage on a new car for a set time or mileage. A used car may have some of it left, or none.
Good to know
Depreciation is the new car's largest cost
The central argument for buying used is that the first owner absorbs the steepest part of the depreciation curve. That argument rests on measured data. iSeeCars' five-year depreciation study, published in March 2026 from more than 950,000 model-year 2021 cars that sold between March 2025 and February 2026, found an average loss of 41.8% of the original price over five years. The average hides a wide spread by segment: trucks lost 34.2%, hybrids 35.4%, SUVs 44.9% and electric vehicles 57.2%. On this page's defaults a $45,000 new car kept five years loses $18,810 on that curve, which is the largest single line in its total cost and nearly half of it. A $32,651 used car loses $13,690 over the same five years. The used car's figure rests on an assumption rather than a measurement, and the page says so plainly. No study publishes how the rate of depreciation changes as a car ages, so the used car's field defaults to the new-car rate spread evenly, 10.3% a year. Because depreciation compounds as a percentage of a smaller and smaller value, a car losing the same percentage each year loses fewer dollars as it gets older, which is why the used car's loss is smaller even at the same rate. If you believe the particular used car will hold its value better, as some models with strong reputations do, lower the field; if it is a model known to depreciate quickly, raise it. That field moves the answer more than any other on the page. The length of time you keep the car matters too. Depreciation per year of ownership falls the longer you keep either car, because the steep early loss is spread across more years.
The financing gap runs the other way
Depreciation favours the used car, and financing favours the new one. Lenders charge more to finance used cars, and the gap is large. Experian's State of the Automotive Finance Market for Q2 2026 put the average rate at 6.35% on new-car loans and 11.19% on used. The spread is wider for borrowers with weaker credit. Super prime borrowers averaged 4.41% on new cars and 6.29% on used, a gap of under two points, while deep subprime borrowers averaged 16.11% new and 21.62% used, more than five points apart. Manufacturers also subsidize new-car rates through their finance companies, which used cars rarely benefit from. On the defaults, with $5,000 down and a 60-month term on both cars, the used loan is $27,651 and the new loan $40,000, yet over five years the used loan pays $8,578 of interest against $6,790 on the new one, $1,788 more on a loan $12,349 smaller. The monthly payments tell a different story, $604 against $780, which is why a used car can feel much cheaper than its total cost shows. A few practical points follow. Get a pre-approval from a bank or credit union before visiting a dealer, because the rate you are offered at the dealership may not be the best available, and on a used car the difference is magnified. A larger down payment helps a used car proportionally more than a new one, because it shrinks a loan carrying the higher rate. And a shorter term cuts the interest faster at a used-car rate than at a new-car rate. If your credit is strong, the financing gap may be small enough that depreciation decides the comparison; if it is weak, the higher used-car rate can erase much of the saving.
What used cars cost in 2026
The old rule that a used car is always the thrifty choice was formed in a market that has changed. When new-car production was cut during the semiconductor shortage of 2021 to 2023, used prices rose sharply, and they have not returned to where they were. iSeeCars' August 2026 study of more than 11.4 million used cars sold in 2019 and 2026 found the average three-year-old car sold for $32,651 in 2026, up 38.2% from $23,624 in 2019. Affordable examples have become scarce. In 2019 nearly half of three-year-old cars were priced under $20,000; in 2026 only 11.4% were. Among five-year-old cars, 26.6% were under $20,000, against 69.2% in 2019, and a buyer now has to look at seven-year-old cars before more than half of the market falls below that price. The study's prices were not adjusted for inflation, but the shift is large in any terms. New cars have risen too. Kelley Blue Book put the average new-vehicle transaction price at $50,089 in August 2026. The gap between a new car and a three-year-old one is still substantial, $12,349 between this page's two default prices, but it buys less of a discount relative to the new car's price than it did before the shortage. Two consequences matter for this comparison. First, with used prices high, the used car starts its depreciation from a higher base, so the dollars it loses are larger than they would once have been. Second, the narrower gap means the higher used-car rate and higher maintenance costs take a bigger share of the saving. On the defaults the used car still wins over five years, by $2,042, but by a margin small enough that your own rates and estimates can reverse it.
Warranty, repairs and the tax break only new cars get
The totals on this page count depreciation, sales tax, interest, maintenance and the insurance difference. Several factors sit outside those lines, and most of them favour the new car. The first is repair risk. AAA's 2025 edition of Your Driving Costs puts maintenance, repair and tires at $1,656 a year for a new car over its first five years at 15,000 miles a year, and the page uses that figure for the new car. An older car costs more to keep running, but by how much depends on the model, its mileage and how it was treated, which is why the used car's $2,400 is an example for you to replace rather than a benchmark. A new car also carries a full factory warranty, while a used car may have some of it left or none, so a large unexpected repair on the used car falls on you. A pre-purchase inspection by an independent mechanic is the best protection available, and a vehicle history report adds to it. The extended warranty page weighs a service contract against that risk. The second factor is tax. For tax years 2025 through 2028, interest on a loan for a new vehicle for personal use, with final assembly in the United States, can be deducted up to $10,000 a year, on Schedule 1-A whether or not you itemize, with the limit phasing out above $100,000 of modified adjusted gross income, or $200,000 on a joint return. Used cars do not qualify. The page's totals are before income tax, so a qualifying new-car buyer's real cost is somewhat lower than shown. The third is insurance, which usually costs less on the used car and is entered as your own quoted difference. Fuel and registration are left out because they are close to equal for two similar cars.
Frequently asked questions
Is it cheaper to buy a new or a used car?
Usually used, but by less than many people expect in 2026. On the defaults, a $45,000 new car against a $32,651 used one over five years, the new car costs $38,769 and the used car $36,727, so the used car saves $2,042. The new car loses $5,120 more to depreciation, but the used car pays $1,788 more interest and $2,220 more for maintenance, net of its cheaper insurance.
How much does a new car depreciate?
iSeeCars' March 2026 study of more than 950,000 cars measured 41.8% lost over five years on average, with hybrids at 35.4%, trucks at 34.2% and electric vehicles at 57.2%. On a $45,000 car that is $18,810 over five years, the largest single cost of owning it.
How much higher are used car loan rates?
Substantially. Experian's Q2 2026 averages were 6.35% on new cars and 11.19% on used, and the gap widens down the credit tiers: 4.41% against 6.29% for super prime borrowers, but 16.11% against 21.62% for deep subprime. On the defaults the used loan pays $8,578 of interest over five years against $6,790 on the new one, although it is $12,349 smaller.
How much more does a used car cost to maintain?
It depends on the car and its history, which is why the page asks for your own estimate. AAA's 2025 edition of Your Driving Costs puts maintenance, repair and tires at $1,656 a year for a new car over its first five years at 15,000 miles a year. An older car sits outside that benchmark, and the $2,400 default for the used car is an example rather than a measurement.
Are used cars still a good deal in 2026?
Less than they were. iSeeCars found the average three-year-old car sold for $32,651 in 2026, up 38.2% from $23,624 in 2019, and only 11.4% of three-year-old cars were priced under $20,000. The average new vehicle sold for $50,089 in August 2026, according to Kelley Blue Book.
Does the new car loan interest deduction favour buying new?
It can. For tax years 2025 through 2028, interest on a loan for a new, personal-use vehicle with final assembly in the United States is deductible up to $10,000 a year, phasing out above $100,000 of modified AGI ($200,000 joint). Used cars do not qualify. This page's totals are before income tax, so a qualifying new-car buyer's real cost is somewhat lower than shown.
What does this comparison leave out?
Fuel and registration, which are close to equal for two similar cars, and the value of a factory warranty on the new car against the repair risk on the used one. It also assumes both cars are financed over the same term with the same down payment.