The six components of true cost
Kelley Blue Book's 2026 Cost to Own puts the US industry average at $80,238 over five years — roughly 160% of the average transaction price, which crossed $50,000 for the first time in September 2025. Sticker price is the smallest piece of the puzzle most buyers consider most carefully.
Every credible analysis — KBB, Edmunds, AAA, iSeeCars — converges on the same six line items: purchase price plus taxes and financing, depreciation, fuel or electricity, maintenance, insurance, and registration. Miss any one and you can misjudge two comparable cars by $10,000–$20,000 over five years.
Budget 1.5× to 1.7× the sticker price as your realistic five-year spend. A $36,000 Toyota Camry is actually a $50,000+ decision once depreciation, fuel, insurance, and maintenance are included.
Depreciation: the silent biggest expense
For most gas and hybrid vehicles, depreciation alone exceeds every other TCO component combined. The 2026 iSeeCars Depreciation Study (950,000+ used-car sales) put the industry-average five-year depreciation at 41.8% — down from 45.6% in 2025. That headline hides enormous segment-level variance.
Why pickups have the best resale
Pickups average just 34.2% depreciation — the lowest of any segment. The Toyota Tacoma and Tundra, Ford Ranger, Jeep Gladiator, and GMC Canyon lead. Three forces combine: the broadest buyer pool, body-on-frame platforms that outlast unibody cars, and supply that has stayed tight since 2020. The Porsche 718 Cayman and 911 hold the most value of any individual models.
Why EVs depreciate 15 points faster than average
EVs depreciate roughly 15 points faster than the industry average. A five-year-old EV typically retains 43–48% of its value versus 58% for the average new car — due to Tesla's rolling price cuts, the US federal EV tax credit expiring September 30, 2025 under the One Big Beautiful Bill Act (a $7,500 subsidy baked into used pricing), and lingering battery-health skepticism even though modern packs retain 85%+ capacity past 100,000 miles.
The worst-hit are the Audi e-tron and Jaguar I-PACE. The most resilient are the Toyota bZ4X (57.6% residual, best in class) and Tesla Model Y and Model 3.
Buy a pickup or a Toyota hybrid. If you want an EV but plan to sell in three years, lease instead of buy — let the manufacturer carry the residual risk.
Fuel and electricity costs per 100 miles
Powertrain is the single largest swing factor after depreciation. At 2026 US prices — $4.00/gallon gasoline, 18¢/kWh residential electricity — the gap between the cheapest and most expensive powertrains is more than 4×, compounding over 75,000 miles of typical five-year driving.
| Powertrain | Cost per 100 mi (US) | Cost per 100 mi (UK) | Cost per 100 mi (AU) | 5-yr fuel at 15k mi/yr |
|---|---|---|---|---|
| Petrol / Gasoline | $13.33 | £16.90 | A$25.75 | $10,000 |
| Diesel | $12.50 | £14.00 | A$24.60 | $9,375 |
| Hybrid (HEV) | $8.89 | £11.25 | A$16.00 | $6,668 |
| PHEV (charged daily) | ~$10.00 | ~£14.00 | ~A$18.00 | $7,500 |
| BEV (home charging) | $5.40 | £7.40 | A$14.40 | $4,050 |
| BEV (DC fast only) | $12.00 | £12–18 | A$24.00 | $9,000 |
| Hydrogen FCEV | $23–27 | n/a | n/a | $18,750+ |
A home-charging EV driver spends roughly $4,000 on electricity over five years versus $10,000 for a gas driver — a meaningful offset to the EV purchase premium. DC-fast-charging exclusively costs about the same as fueling a hybrid.
If you cannot charge at home, an EV's running-cost advantage evaporates. A hybrid is almost always the cheaper long-term answer for apartment dwellers and street-parking households.
Maintenance, insurance, and fees
These three add up to $12,000–$20,000 over five years — enough to swing the ranking between otherwise evenly matched cars.
Maintenance: where EVs earn back their premium
Five-year maintenance on a gas or hybrid runs $3,000–$5,000. EVs cut this by roughly 40% — no oil, no spark plugs, no transmission service, and regen braking that triples pad life. Expect $1,800–$3,000 for an EV, most of it tires. Premium European brands run $6,000–$10,000 out of warranty.
Insurance and registration
US full-coverage insurance averaged $1,600–$2,400/year in 2026 — budget $8,000–$12,000 over five years. EV premiums run 20–35% higher (expensive battery packs, specialized body shops). Registration ranges $1,500–$4,500 over five years, with EVs facing a $100–$300 annual surcharge in 30+ US states. The UK added EVs to Vehicle Excise Duty in April 2025 (£10 first year, £195/year thereafter).
Warranty as a TCO hedge
The US standard is 3 yr/36k mi bumper-to-bumper and 5 yr/60k mi powertrain. EV batteries are federally required to carry 8 yr/100k mi with 70% capacity retention.
| Brand | Bumper-to-bumper | Powertrain | EV battery |
|---|---|---|---|
| Industry standard | 3 yr / 36k mi | 5 yr / 60k mi | 8 yr / 100k mi (70%) |
| Hyundai / Kia / Genesis | 5 yr / 60k mi | 10 yr / 100k mi | 10 yr / 100k mi |
| Mitsubishi | 5 yr / 60k mi | 10 yr / 100k mi | 8 yr / 100k mi |
| Tesla | 4 yr / 50k mi | — | 8 yr / 100–150k mi |
| Rivian | 5 yr / 60k mi | — | 8 yr / up to 175k mi |
| Mercedes EQS | 4 yr / 50k mi | — | 10 yr / 155k mi |
| Toyota bZ | 3 yr / 36k mi | 5 yr / 60k mi | 10 yr / 150k mi |
| BMW / Mercedes (ICE) | 4 yr / 50k mi | 4 yr / 50k mi | 8 yr / 100k mi |
A Hyundai or Kia with 10 years of powertrain coverage is the statistical equivalent of $2,000–$4,000 in extended-warranty protection baked into the purchase price.
Four worked five-year examples
Four vehicles across the mainstream spectrum, assuming 15,000 mi/yr, 60-month ownership, US averages, and home charging where applicable.
| Component | Honda Civic Hybrid | Toyota Camry Hybrid | Tesla Model Y (Std) | Ford F-150 XLT |
|---|---|---|---|---|
| Purchase + tax | $33,000 | $38,000 | $42,500 | $48,000 |
| Depreciation (5 yr) | $13,860 (42%) | $15,200 (40%) | $19,975 (47%) | $13,600 (34%) |
| Fuel / electricity | $5,800 | $5,800 | $4,050 | $12,000 |
| Maintenance | $3,000 | $3,200 | $2,000 | $4,500 |
| Insurance (5 yr) | $9,500 | $10,000 | $11,500 | $10,500 |
| Registration / fees | $1,500 | $1,800 | $2,800 | $2,200 |
| 5-year TCO | $33,660 | $36,000 | $40,325 | $42,800 |
The Civic Hybrid's premium is reclaimed through fuel savings alone. The Model Y's steep EV depreciation is partially offset by rock-bottom fuel and maintenance — net TCO lands close to the Camry despite a higher sticker. Step the F-150 up to a Platinum or Raptor and TCO climbs past $70,000 fast.
Build your own TCO calculator
A functional TCO calculator is straightforward enough that any buyer can sketch one on the back of an envelope. Here is the input/output specification for an interactive version.
Inputs
- MSRP or out-the-door price, plus sales tax (0–10% by state)
- Down payment, loan term (36–84 months), and APR (credit-union rates averaged 6.5–7.5% in early 2026)
- Powertrain, combined MPG or MPGe, annual mileage, local fuel price
- Ownership horizon and estimated residual (iSeeCars segment averages)
- Insurance quote and annual registration fee
Outputs
- Total TCO, cost per mile, and monthly true cost
- Component breakdown chart — depreciation, fuel, insurance, maintenance, fees, interest
- Side-by-side comparison against up to three alternative vehicles
- Break-even mileage for hybrid vs gas or EV vs hybrid
Break-even mileage is the most valuable output. A Civic Hybrid over a Civic LX breaks even around 30,000 miles. A Model Y over a Camry Hybrid breaks even around 70,000 miles — if you plan to sell in three years at 45,000 miles, the EV is actually more expensive.
Loan length and the negative-equity trap
Roughly 20% of new US car loans in 2026 run 84 months or longer. On a $45,000 vehicle at 7.5% APR, the gap between a 60-month ($902) and 84-month ($690) payment looks attractive — but total interest jumps from $9,100 to $12,960, and you spend most of the loan underwater.
A new vehicle loses 20% in year one and 30–35% by year three. On a 60-month loan you reach equity breakeven around month 36; on an 84-month loan not until month 60. Sell, trade, or total before then and you carry negative equity — a shortfall that rolls into your next loan. This is how buyers end up financing $50,000 on a $35,000 car.
Never finance longer than you plan to own. If you can't afford a 60-month payment with 20% down, the car is out of your budget — pick a cheaper trim or a used version. The 84-month loan is a symptom of a car you shouldn't be buying.
Frequently asked questions
Kelley Blue Book's 2026 Cost to Own dataset puts the US industry average at $80,238 — depreciation, financing, fuel, maintenance, insurance, registration, and fees combined. That's roughly 60% higher than the $50,000 average sticker price, which is why budgeting only for purchase price consistently underestimates what buyers actually spend.
Only if you can charge at home. A home-charging EV spends about $4,000 on electricity over 75,000 miles versus $10,000 in gas — a $6,000 saving. But EVs depreciate 15 points faster than average and insurance runs 20–35% higher. Powertrain savings outweigh those penalties for home-chargers keeping the car 5+ years; they rarely do for apartment dwellers or short-term owners.
Pickups lead every segment at 34.2% depreciation — the Tacoma, Tundra, Ranger, Gladiator, and Canyon top the list. Hybrids follow at 35.4%, a dramatic reversal from 56.7% in 2019. Porsche 718 Cayman and 911 lead individual models. Toyota as a brand takes 10 of the top 25 resale slots.
In almost every case, yes. 84-month loans extend the negative-equity window to 60+ months. On a 60-month loan you're right-side-up by month 36; on an 84-month loan not until month 60. Sell, trade, or total before then and the shortfall rolls into your next loan — how buyers end up financing $50,000 on a $35,000 car. Never finance longer than you plan to own.
Gas or hybrid: $3,000–$5,000 over five years. EVs cut this 40% to $1,800–$3,000, mostly tires. Premium European brands — BMW, Mercedes, Audi — run $6,000–$10,000 and rise sharply in years 6–8. Hybrids ranked most reliable powertrain in JD Power's 2025 Vehicle Dependability Study.
EV premiums run 20–35% higher for three reasons: higher repair costs (specialized body shops, aluminum structures), lower total-loss thresholds (battery damage totals the car), and thinner parts supply chains. Performance EVs like the Model Y Performance and Lucid Gravity carry the steepest premiums. Shopping multiple insurers can recover $300–$600 per year.
Sticker price is the worst metric for comparing cars. Build a true five-year TCO using the six inputs — price, depreciation, fuel, maintenance, insurance, fees — and the ranking frequently flips. A $42,000 hybrid can beat a $36,000 gas car. An $80,000 F-150 often beats a $55,000 EV sedan. Run the numbers before you sign.