Car ownership cost case studies

Situation

A Denver driver buys a used compact SUV for $28,500, puts $6,500 down, finances the balance for 60 months at 7.25%, and drives 12,000 miles per year.

Inputs

• 30 MPG at $3.15 per gallon
• $2,100 annual insurance quote
• $500 first-year maintenance, rising 12% annually
• 15% annual depreciation
• 8.81% sales tax plus stated registration and title fees

Result

The five-year ownership estimate is about $44,450. Depreciation contributes $15,854; insurance $10,500; fuel $6,300; loan interest $4,910; maintenance $3,176; and tax, title, and registration about $3,711.

What this case demonstrates

The purchase price represents only about 64% of the five-year cash and value loss. Shopping the insurance quote and validating the depreciation rate matter more here than chasing a small change in fuel price.

Situation

A Miami driver compares a $42,000 EV with a $32,000 gas car over five years and 13,000 annual miles. No federal clean-vehicle credit is assumed because eligibility depends on the buyer and vehicle at the time of sale.

Inputs

• Gas car: 29 MPG at $3.20 per gallon
• EV: 0.30 kWh per mile at $0.15 per kWh
• $2,400 gas versus $2,900 EV annual insurance
• 15% gas versus 18% EV annual depreciation
• EV scheduled maintenance set 30% below gas

Result

The gas scenario totals about $42,517 and the EV scenario about $49,106. The EV saves roughly $4,247 in energy and $991 in maintenance, but those savings do not overcome the larger purchase-price, depreciation, and insurance assumptions.

What this case demonstrates

This is not a claim that gas cars are always cheaper. A qualifying tax credit, a used EV purchase, cheaper insurance, or a stronger resale assumption can reverse the result. The case shows why all categories must be compared together.

Situation

The same buyer finances $25,161 at 7.25% APR and compares a 60-month contract with a 72-month contract. Price, down payment, taxes, and vehicle costs remain unchanged.

Inputs

• $25,161 amount financed
• 7.25% fixed APR
• No prepayment or additional principal
• Standard simple-interest amortization

Result

The 60-month payment is about $501.19 with $4,910 total interest. The 72-month payment falls to about $432.00, but total interest rises to about $5,943—a $1,033 premium for reducing the scheduled payment by roughly $69 per month.

What this case demonstrates

Monthly affordability and total affordability are different questions. The longer term also increases the time during which the loan balance may exceed the car's resale value.