Which one actually costs less over the years you'll own it
| Age | % of Original Price Left | $40,000 Car Worth | 3-Yr-Old ($24,000) Worth, Same Age |
|---|---|---|---|
| Day one (new) | 100% | $40,000 | — |
| 1 year | 80% | $32,000 | — |
| 2 years | 69% | $27,600 | — |
| 3 years | 60% | $24,000 | $24,000 (bought here) |
| 4 years | 52% | $20,800 | $20,800 |
| 5 years | 45% | $18,000 | $18,000 |
| 6 years | 39% | $15,600 | $15,600 |
| 7 years | 34% | $13,600 | $13,600 |
| 8 years | 30% | $12,000 | $12,000 (sold here) |
Typical retention used by this site's auto calculators. Trucks and some Toyotas/Hondas hold value better; luxury sedans and EVs can fall faster. The structural point survives model-to-model noise: whoever owns the car in years 1-3 eats the steepest part of the curve.
| Credit Score Band | New-Car APR | Used-Car APR | Payment on $24,000 / 60 mo |
|---|---|---|---|
| 781 – 850 (super prime) | 5.2% – 6.5% | 7.0% – 8.5% | $475 – $492 |
| 661 – 780 (prime) | 6.5% – 8.5% | 9.0% – 11.0% | $498 – $522 |
| 601 – 660 (near prime) | 9.0% – 11.5% | 13.0% – 15.5% | $546 – $577 |
| 501 – 600 (subprime) | 13.5% – 16.5% | 18.5% – 21.5% | $616 – $656 |
Indicative national bands; rates move with the market and lender. Payments computed on a $24,000 / 60-month used-car loan at each band's used APR. Even a 3-point penalty on the used loan rarely erases a $16,000 price advantage — the calculator shows exactly how much survives.
Sticker price hides the real comparison. Two cars from the same model line, bought at different ages, cost different amounts to finance, insure, maintain, and eventually sell. This calculator adds all five years (or however many you choose) of those costs and subtracts resale, so you're comparing what each car takes, not what each car costs on the window.
Monthly payment is the standard amortization formula: P·r ÷ (1 − (1+r)⁻ⁿ) at the loan's APR and term. Total cost = all payments over the holding period + sales tax and fees + insurance × months + maintenance × years − resale value. Resale comes from the retention table above: a new car is worth 45% of its price after 5 years, while a car bought at age 3 depreciates from 60% down to 30% of the original price by year 8 — half its purchase price, versus 55% lost by the first owner.
Fill in both columns from real listings. The used-car fields default to a 3-year-old example at 60% of the new price; adjust the age if you're shopping a 1-year-old off-lease car (worth ~69-80%) or a 6-year-old (~39%). Insurance defaults to a $35/month gap — pull real quotes if you have them, since collision and comprehensive dominate the difference. Keep maintenance honest: a car under factory warranty costs less early, and more once it expires.
The defaults model a real cross-shop: $40,000 new at 6.5% for 60 months, or the same car 3 years old at $24,000 at 9.5% for 60 months. Payments are $782.65 versus $504.04. Add $185 versus $150 a month of insurance, $500 versus $1,000 a year of maintenance, and $3,200 versus $1,900 of tax and fees. After five years, sell the former new car for $18,000 (45% retention) and the used one for $12,000 (30% of original).
Totals: $45,759 for new, $34,143 for used. The used car wins by $11,616 — $193.60 a month, every month, for five years. The 3-point rate penalty never catches up (the smaller used loan accrues $6,243 of interest versus $6,959 on the new one), and $2,500 of extra maintenance can't swallow the $10,000 depreciation bill the first owner paid for you.
Used, almost always, and the gap is bigger than the sticker suggests. Our benchmark example: a $40,000 new car versus the same model 3 years old at $24,000, both held 5 years. The new car costs $45,759 all-in; the used car costs $34,143. The used car wins by $11,616 — about $193 a month.
A typical car loses about 20% of its value in the first year (including the drive-off drop), roughly 31% by year two, 40% by year three, and 55% by year five. That curve is why a 3-year-old used car costs around 60% of new while still having most of its useful life left.
Three cases: when the used-market premium collapses (some hybrids and popular models hold value so tightly that 1-2 year-old examples cost nearly as much as new), when you keep cars 10+ years so the first-owner depreciation is amortized away, and when factory incentives or 0% APR financing shrink the financing gap enough to offset it.
Lenders charge about 2 to 4 percentage points more for used cars because collateral risk is harder to price and older vehicles back loans that are more likely to go underwater. In our benchmark example, the new car finances at 6.5% while the 3-year-old version pays 9.5% — and the used car still wins by five figures.
Lease vs buy compares two ways to acquire the same new car (renting depreciation plus rent charge versus buying with a loan). New vs used compares two different cars: the depreciation you buy is much smaller on the used one. If you're cross-shopping all three, run the lease payment calculator on the new car and this calculator on new versus used, then compare monthly totals.
Loan payments and interest, sales tax and fees, insurance, and maintenance over your holding period, minus what the car is still worth when you sell. Fuel is excluded because similar models burn roughly the same gas regardless of age; registration is folded into the fees field since most states charge it annually — adjust the fee inputs to match your state.