The true monthly cost of owning a car
The payment is usually less than half of it.
A used SUV with a $540 monthly payment actually costs about $1,240 a month to own. The payment is the number people budget around; insurance, fuel, maintenance, and depreciation together are larger than the payment itself.
One vehicle, fully costed
A $31,000 used SUV, financed, with depreciation at 12% a year:
| Component | Monthly |
|---|---|
| Loan payment | $540 |
| Insurance | $145 |
| Fuel | $185 |
| Maintenance | $60 |
| Depreciation (12%/yr on $31,000) | $310 |
| True monthly cost | $1,240 |
Cash actually leaving the account is $930 a month. Depreciation adds another $310 — about a quarter of the total — and it is the component almost nobody counts.
Why depreciation counts even though you never write the cheque
Depreciation is not an accounting abstraction; it is the largest single cost of owning most vehicles. A car worth $31,000 today and about $27,280 in a year has consumed $3,720 of your net worth. You simply pay it all at once, later, in the form of a lower trade-in or sale price than you paid.
Leaving it out is what makes a car feel affordable and a household budget feel mysteriously tight. The money is gone either way — the only question is whether your planning acknowledged it.
Two cars, which is the normal case
Add a $22,000 used sedan with a $405 payment, $120 insurance, $140 fuel, and $55 maintenance:
| SUV | Sedan | Both | |
|---|---|---|---|
| Loan payments | $540 | $405 | $945 |
| Total cash cost | $930 | $720 | $1,650 |
| True cost incl. depreciation | $1,240 | $940 | $2,180 |
That is $26,160 a year, and about 2.3 times what the loan payments alone imply. For most households transport is the second-largest line item after housing, and it is the one most often understated by more than half.
What actually moves the number
- Buying used rather than new. The steepest depreciation happens in the first few years, and it happens to whoever owns the car then. This is the single biggest lever available.
- Holding the car longer. Depreciation as a percentage falls as the value falls, and a paid-off car eliminates the payment entirely while the rest of the costs stay flat.
- Insurance shopping. Premiums for identical coverage vary widely between carriers, and it costs an afternoon to check.
- Whether you need two. The comparison worth running is not SUV versus sedan — it is two cars versus one car plus occasional transit or rideshare. At $940 a month for the second vehicle, the alternatives get a lot of room.
Cost your own vehicles
Depreciation rates vary by make, model, and condition, and the figures above are planning benchmarks rather than a valuation of your specific car.
It costs multiple vehicles at once, separates cash outlay from depreciation, and lets you compare against transit passes or rideshare to test the one-car question directly. Your auto loan flows in from the Debt calculator and your premium from Insurance, so the total reflects what you actually pay — with no sign-up.
CuraMoneta is an educational tool and does not provide financial, tax, or legal advice. Depreciation modelled at 18% per year for new and 12% for used vehicles; actual rates vary by make, model, mileage, and condition.