Smart Spending

Used or New Car?

New vs. used. Depreciation, interest, and opportunity cost exposed - side by side. The number the dealership doesn't want you to calculate.

New Car

As a % or $ value, applies proportionally to each vehicle's price.
New car rates are typically lower.

Used Car

As a % or $ value, applies proportionally to each vehicle's price.
Used car rates are typically higher.

Shared Parameters

Annual return if you invested the payment difference instead. Historical S&P 500 average is ~10%; 7–8% is a conservative estimate.

True Cost Comparison

Verdict
Fill in fields to calculate
Monthly Payment
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New / Used
Total Money Paid for Car (Loan + Down Payment)
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New / Used
Total Interest Paid
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New / Used
Total Depreciation
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New / Used
Investment Opportunity Cost
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New / Used
True Cost
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New / Used

You Chose a Car that Would Save You Money... What Now?

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How It's Calculated

Monthly Payment: Standard amortized loan - P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ−1], where r = monthly rate and n = loan term in months.
Depreciation Curve: 20% drop in Year 1, then 15% each subsequent year. A used car that already absorbed the Year 1 cliff loses value far more slowly - that's the hidden advantage.
Opportunity Cost: Monthly payment difference run through the Future Value of an Annuity - PMT × [(1+r)ⁿ−1] ÷ r - at your expected market return over the hold period.
True Cost: Down payment + total interest paid + total depreciation. For the higher-payment option, the opportunity cost of not investing that difference is added on top.

The used car wins in almost all realistic scenarios. The gap grows the longer you hold and the larger the price difference. A lower new-car rate rarely compensates for Year 1 depreciation.

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