How total car ownership cost is calculated
Vehicle cost is more than the purchase payment. The model counts value lost at resale, transaction costs, financing interest and every recurring expense entered for the ownership period.
Ownership cost = depreciation + taxes and fees + interest + annual operating costs
Do not count loan principal twice
Purchase price and resale value already determine depreciation. Enter financing interest, not the full total of loan payments, or principal will be counted both as vehicle value and financing cost.
Compare vehicles on the same assumptions
Use the same years and annual mileage when comparing cars. Test a resale-value range because depreciation often has a larger effect than small differences in fuel or maintenance.