Keep Old Car vs. Buy New Calculator Methodology

The calculator estimates total cost, average monthly cost, break-even timing, repair risk impact, ending equity, and monthly cash flow differences for keeping your current car versus buying a newer one.

The keep-current-car path includes immediate repairs, existing loan payments, insurance, fuel, registration, maintenance and repairs, expected major repair risk, and ending resale value net of any remaining loan balance.

The buy-newer path includes down payment, financed purchase price, taxes and fees, title fees, trade-in equity, loan payments, insurance, fuel, registration, maintenance, warranty or included maintenance value, and ending resale value net of any remaining loan balance.

Replacement car payments use a standard amortized loan formula. Existing car loan payments use the monthly payment you enter and simulate the balance month by month.

payment = principal * (monthlyRate * (1 + monthlyRate)^months) / ((1 + monthlyRate)^months - 1)

Trade-in equity is current car value minus current car loan balance. Positive equity reduces the replacement financed amount. Negative equity increases the amount financed when the current car is used as a trade-in.

Major repair risk is modeled as an expected planning cost, not a prediction. The calculator multiplies the entered major repair cost and downtime or rental cost by the entered probability.

Fuel uses annual miles, MPG, gas price, and comparison years. Insurance uses monthly premiums. Registration uses annual fees. Current car maintenance can increase each year by the entered percentage, while replacement car maintenance is reduced by any warranty or included maintenance value.

Ending equity is expected resale value minus remaining loan balance at the end of the comparison period. The timeline estimates vehicle value linearly from today's value or purchase price to the entered ending resale value.

The calculator builds a month-by-month timeline for both paths and finds the first month where buying newer has a cumulative cost less than or equal to keeping the current car. If that does not happen, the result says buying newer does not catch up within the modeled period.

This calculator does not include exact repair diagnosis, exact mechanic pricing, exact insurance underwriting, exact loan approval or lender terms, exact depreciation by model, dealer incentives, warranty exclusions, tax effects, or professional financial, mechanical, insurance, legal, or vehicle-buying advice.

These calculators are for educational purposes only and are not financial, tax, legal, insurance, investment, real estate, employment, medical, childcare, vehicle-buying, or professional advice.

This calculator uses user-entered assumptions and simplified total-cost modeling. Actual repair costs, depreciation, financing, insurance, and resale values can vary widely.