Total Cost of Ownership Calculator

Find the true cost of owning something over time.

Purchase price

Annual operating cost

$/yr

Years of ownership

years

Resale value(optional)

Results update as you type.

Total cost of ownership

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Cost per year—

How it works

The purchase price is only part of what something costs — ongoing expenses and eventual resale value matter too — and this calculator finds the total cost of ownership (TCO). You enter the purchase price, the annual operating cost, the number of years you'll own it, and the resale value at the end, and it returns the total cost and the cost per year. The calculation adds the upfront price to the running costs over the whole period, then subtracts what you get back when you sell, giving the true net cost. This is essential for smart buying decisions, especially for big purchases like cars, where fuel, insurance, maintenance, and depreciation often exceed the sticker price over several years, or appliances and electronics, where energy use and repairs add up. A cheaper item with high running costs can end up more expensive than a pricier, more efficient one — TCO reveals that. It also lets you compare options on an equal footing: buying versus leasing, one model versus another, or keeping something longer versus replacing it. The cost per year is especially useful for comparing items you'll own for different lengths of time. Include all relevant annual costs — operation, maintenance, insurance, fees — for an accurate figure. Enter the purchase price, annual cost, years, and resale value to find the total cost of ownership.

Formula

TCO = purchase price + (annual cost × years) − resale value

Total cost of ownership adds the purchase price and the annual operating costs over the ownership period, then subtracts the resale value recovered at the end. Dividing by the number of years gives the true average cost per year of owning the item.

Source:Cost analysis

We review all our tools from time to time to ensure accuracy.

Worked example

Purchase price:30000Annual operating cost:4000Years of ownership:5Resale value:12000

$30,000 + ($4,000 × 5) − $12,000 = $38,000 total, or $7,600 per year.

How to use this calculator

1
Enter your values
Enter purchase price, annual operating cost and years of ownership.
2
Adjust the options
Adjust resale value if they apply — sensible defaults are already set.
3
Read your result
Total cost of ownership updates instantly as you type — no button to press.

Frequently asked questions

What is total cost of ownership?

Total cost of ownership (TCO) is the complete cost of owning something over its life, not just the purchase price. It adds the upfront cost and all ongoing expenses over the ownership period, then subtracts any resale value recovered at the end. TCO gives the true net cost, revealing the real financial impact of a purchase.

Why is TCO better than the purchase price?

The purchase price ignores ongoing costs and resale value, which can dominate the true cost. A car's fuel, insurance, maintenance, and depreciation often exceed its sticker price over several years. TCO captures all of this, so a cheaper item with high running costs may actually cost more than a pricier, more efficient one — a difference the sticker price hides.

What annual costs should I include?

Include every recurring expense of owning the item: for a car, that means fuel, insurance, registration, maintenance, and repairs; for an appliance or device, energy use, supplies, and service. The more completely you capture annual costs, the more accurate the TCO. Leaving out significant recurring expenses understates the true cost and can lead to a poor comparison.

How does resale value affect the total?

Resale value reduces the total cost because it is money you recover when you sell. An item that holds its value well, like some cars, has a lower true cost than one that depreciates to nothing, even at the same purchase price. Subtracting the expected resale value gives the net amount the ownership actually cost you.

How do I use cost per year to compare options?

Cost per year divides the total cost by the years of ownership, letting you compare items you'd keep for different lengths of time on an equal, annualized basis. It answers what an option truly costs you each year, making it easy to compare, for example, a car you'd keep three years against one you'd keep seven.