Keep or Replace Your Car Calculator
Compare the economic cost of keeping your current car with buying a replacement over the same period. The result includes the value you give up by keeping either vehicle, operating costs, and the annual mileage where the answer could change.
Lower-cost choiceKeep current car
- Cost to keep current car
- $33,550.00
- Cost to replace current car
- $35,676.47
- Difference between choices
- $2,126.47
- Average annual savings
- $425.29
- Current car cost per mile
- $0.56
- Replacement cost per mile
- $0.59
- Annual-mileage break-even point
- 16,133.4
- Cash needed to switch
- $20,000.00
Financing charges and the opportunity cost of cash are excluded. Fuel, maintenance, and fixed costs are held constant over the comparison period.
How to use this calculator
- Choose a comparison period that matches how long you expect to own either vehicle.
- Enter the annual miles, fuel price, and realistic combined fuel economy for both vehicles.
- Estimate each vehicle’s value at the end of the period, then add known repairs and routine maintenance costs.
- Include yearly insurance, registration, parking, and similar costs for each vehicle.
- Review the lower-cost choice, cost per mile, cash needed to switch, and annual-mileage break-even point.
How the keep-or-replace comparison works
A repair bill is not, by itself, a reason to replace a car. The useful question is what each option will cost from today through the same future date. This calculator treats the current car’s market value as a cost of keeping it because you give up the chance to sell it now. It treats the replacement’s out-the-door price as its starting cost, without subtracting the current car’s value, so the two ownership costs remain comparable.
For the current car, the calculation is:
keep cost = (current value − end value) + repairs now + years × fixed costs + years × annual miles × (fuel price ÷ mpg + maintenance per mile)
The replacement calculation uses the same operating-cost structure:
replace cost = (purchase price − end value) + years × fixed costs + years × annual miles × (fuel price ÷ mpg + maintenance per mile)
The lower total is the lower-cost choice. A difference of one dollar or less is shown as a tie because resale and repair estimates are not precise enough to support a stronger recommendation.
Why current value belongs in the cost to keep
Keeping a car does not require a new payment, but it does use an asset that could be sold today. If a car is worth $8,000 now and $3,000 after five years, the ownership cost includes $5,000 of value used up over those years. This is an economic cost, not a cash bill. It helps avoid comparing all of an old car’s repair costs with only the payment on a newer one.
Fuel and maintenance are calculated per mile, while insurance, registration, inspection, parking, and similar charges are annual fixed costs. That separation makes it easier to change the assumptions when you drive more or less than expected. FuelEconomy.gov also uses fuel price, miles driven, and fuel economy as the basic components of fuel-cost comparisons.
How to use the mileage break-even point
The annual-mileage break-even solves the two total-cost equations for annual miles. It is the mileage where the cost difference becomes zero. When the replacement has a lower per-mile operating cost but a higher fixed cost, driving more can eventually offset its higher purchase cost. No finite break-even is shown when the vehicles have identical per-mile costs, and no nonnegative break-even is shown when one choice stays cheaper at every practical mileage.
What can move the result most
The largest inputs are usually the replacement purchase price, the expected resale values, major known repairs, and annual mileage. Use a market-based estimate for today’s sale value and conservative end values. Maintenance per mile should include routine service, tires, and expected non-warranty repairs, but not the known repair entered separately. A result with only a small advantage is best treated as a prompt to gather better estimates, not as a final decision.
What this calculator leaves out
The calculation excludes loan interest, financing fees, taxes beyond the replacement out-the-door price, and the opportunity cost of cash. It also does not assign a value to reliability, downtime, safety, comfort, emissions, or different vehicle usefulness. Repair outcomes and resale prices can differ materially from estimates, so use local quotes and your own risk tolerance before making a purchase decision.
Worked example
Suppose you compare the cars for five years and drive 12,000 miles a year. The current car is worth $8,000 now and $3,000 at the end, needs $1,200 of work now, gets 24 mpg, costs $0.16 per mile to maintain, and has $1,800 of annual fixed costs. At $3.50 per gallon, its total cost is ($8,000 − $3,000) + $1,200 + 5 × $1,800 + 5 × 12,000 × ($3.50 ÷ 24 + $0.16) = $33,550.
The replacement costs $28,000 out the door, is worth $16,000 after five years, gets 34 mpg, costs $0.10 per mile to maintain, and has $2,300 of annual fixed costs. Its total is ($28,000 − $16,000) + 5 × $2,300 + 5 × 12,000 × ($3.50 ÷ 34 + $0.10) = $35,676.47. Keeping costs $2,126.47 less, or $425.29 per year. The break-even point is about 16,133 miles a year, and switching requires $20,000 before any financing.
Common questions
Is it cheaper to repair an old car or replace it?
It depends on the full cost over the same ownership period, not just the next repair bill. Compare known repairs and future maintenance with both vehicles’ depreciation, fuel, insurance, registration, and expected resale value. A large repair can still be cheaper than replacing a car if the replacement has much higher purchase and fixed costs.
Why is my current car’s value counted as a cost?
You could sell or trade the car today, so keeping it means giving up that value. The calculator counts the decline from today’s value to the future resale value as depreciation over the comparison period. This is an economic cost even though it is not an immediate bill.
How should I estimate future resale value?
Use current local listings, trade-in estimates, model-year depreciation trends, and an honest estimate of future mileage and condition. Favor a conservative estimate, especially for a vehicle with uncertain repairs or a changing market. The result is sensitive to the gap between the purchase or current value and the end value.
What should maintenance cost per mile include?
Include expected routine service, tires, wear items, and future repairs spread across the miles you expect to drive. Put a repair that is already known and needed now in the separate repairs-needed-now field so it is not counted twice. Do not include fuel in maintenance because the calculator handles it from mpg and fuel price.
At what annual mileage does a more efficient car pay off?
The annual-mileage break-even is the mileage at which the two entered total costs are equal. Driving above it can favor the vehicle with lower per-mile operating costs, while driving below it can favor the vehicle with lower fixed and depreciation costs. A break-even does not appear when equal per-mile costs or the cost structure makes a nonnegative crossover impossible.
Does this calculator include a car loan or financing?
No. It compares vehicle ownership costs before loan interest, lender fees, and the opportunity cost of using cash. Add those costs separately when a replacement would be financed, because they can materially change the decision.