True cost of ownership — the honest 5-year math.

Total cost of ownership rolls up seven independent cost categories over a defined holding period. National 5-year averages on a $30k mainstream sedan:

Depreciation is the loss of market value over your holding period — invisible day-to-day but the single largest cost for most owners. The shape of the curve matters more than the raw number:

• Year 1: ~20% loss. Steepest part of the curve. Driving the car off the lot costs you roughly $5,600 on a $28k sedan.
• Years 2–3: 10–15% per year. The curve flattens. You lose another $7,000 over the next 24 months.
• Years 4–5: 8–12% per year. Depreciation continues but at a much shallower rate.
• Year 6+: 5–8% per year. Long-tail. This is why owners who hold 8+ years see the lowest annual ownership cost.

The arbitrage: buying a 2–3 year old certified pre-owned vehicle skips the steepest 30–35% of the depreciation curve. On a typical sedan, that’s ~$7,500 of cost you simply don’t pay. The trade-off: fewer years of warranty coverage and slightly higher repair frequency. Net saving after factoring repair offsets: ~$6,000–$7,000 on the typical mainstream vehicle.

Class-specific 5-year depreciation curves: sedans — 40–45%, SUVs — 42–48%, pickups — 35–42%, EVs — 45–52% (improving each model year as the market matures), luxury — 50–55%.

The headline “EVs save money” is true in some scenarios and false in others. Five conditions move the math:

At today’s national averages (gas $3.30/gal, electricity $0.16/kWh, 13.5k miles/yr), mainstream EVs are 5–10% more expensive than ICE sedans over 5 years even after the IRA credit. EVs have a strong long-term trajectory — battery costs are dropping, charging networks are expanding, and resale values are stabilising — but the present-day math is more nuanced than EV advocates suggest.

1. 1. Tire replacement

   Most 5-year TCO models bundle this into maintenance but it's a discrete $1,200-$2,200 expense around year 3-4. Performance tires on luxury cars or EV-specific tires can hit $1,800-$2,800.

2. 2. Brake job (pads + rotors)

   $600-$1,400 around years 3-5 depending on driving style and city/highway mix. Regenerative braking on EVs cuts this in half — one of the few maintenance items where EVs genuinely save money long-term.

3. 3. Detailing + reconditioning before sale

   $400-$800 to recondition a 5-year-old vehicle for private-party sale. Trade-ins skip this but typically yield 10-15% less than private sale, so it's a hidden cost either way.

4. 4. Parking and tolls

   Often excluded from TCO calculators but real money — $1,500-$4,000 over 5 years for urban drivers. EVs frequently get reduced toll rates and free municipal parking in some cities, partially offsetting their higher purchase price.

5. 5. Loan-related fees and gap insurance

   Origination fees ($75-$500), gap insurance if you bought it from the dealer ($500-$900 rolled into the loan, accruing interest), and any service contracts. Often $1,000-$2,000 of hidden cost most calculators don't model.

6. 6. Battery replacement risk (EVs over 8 years)

   EV batteries carry 8-year/100k-mile warranties. Within 5 years and 75k miles you're effectively risk-free — but if you plan to hold the vehicle 8+ years, factor in a potential $8,000-$15,000 battery replacement in years 9-12.

Both can win, depending on your holding period and how you use the vehicle. Five-year head-to-head on a $32,000 mainstream SUV:

Bottom line: if you can hold the vehicle 5+ years, buying used wins clearly. Buying new is the middle path. Leasing wins for: drivers who must drive a recent-model vehicle, business owners who can write off the lease via Section 179, and EV early-adopters who want to hand back the first-gen depreciation risk after 3 years.