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Should I buy new or used?

A new car costs more and loses value fastest in year one. A used one is cheaper but borrows at a higher rate and needs more repairs. Depreciation is usually the biggest number of the three, and the one nobody puts on the invoice.

The new car

NEW
$
$
%
yrs
%

New cars typically shed 20% or so in the first year alone.

The used car

USED
$
$
%
yrs

A used-car loan almost always prices above a new one — lenders see faster collateral depreciation and a shorter useful life — and manufacturer promotional rates are new-car only. A two- to three-point gap is normal, so entering the same rate on both sides will flatter the used car.

%

Lower, because the steep early drop already happened to someone else.

Shared assumptions

BOTH
yrs
%/yr
%
$

Per year, above what the new car costs under warranty. Charged to the used car. May be negative.

$

Per year, above the used car. Premiums track what the car is worth to replace, so the dearer one costs more to cover. Replace it with the difference between your two quotes if you have them.

Sales tax applies to both prices and is financed with the loan. It is not part of what the car is worth later — you do not get it back when you sell — so it never appears in the resale figures below. Put registration, doc fees and anything else that scales with price into the prices above.

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Enter both prices and how long you plan to keep the car.

Save or send these numbersEmail

All four happen in your browser. Your figures are not sent anywhere — the email opens in your own mail app, already filled in.

Why the price gap is not the savingA written guide to the rules behind this calculator →
For educational purposes only. Depreciation varies enormously by make, model and mileage, and repair costs on a used car are unpredictable by nature. Treat the residual values here as estimates, and check model-specific data before committing.