Total Cost of Ownership
Estimate the full cost of owning an item over its life.
About Total Cost of Ownership
Total cost of ownership adds all recurring costs over the ownership period to the purchase price and subtracts resale value. Recurring costs frequently exceed the purchase price, so TCO is the honest comparison between alternatives.
Formula
Total Cost of Ownership
TCO = purchase + (maintenance + insurance + fuel) x years - resale
- recurring
- Ongoing annual ownership costs
Worked example
With the default values below, Total Cost of Ownership returns Total Cost of Ownership of $33,500.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Purchase price
- 30,000
- Maintenance per year
- 700
- Insurance per year
- 900
- Fuel/energy per year
- 1,500
- Years ownedminimum 1
- 5
- Estimated resale value
- 12,000
Results
- Total Cost of Ownership
- $33,500.00
- Annual Cost
- $6,700.00
- Monthly Cost
- $558.33
Step by step
- 1Values used
- 2Total Cost of Ownership
- 3Total Cost of Ownership= 33,500.00
- 4Annual Cost= 6,700.00
- 5Monthly Cost= 558.33
Assumptions and limits
- The result is derived only from the 6 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or fees or charges into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Total Cost of Ownership calculated?
TCO = purchase + (maintenance + insurance + fuel) x years - resale Total cost of ownership adds all recurring costs over the ownership period to the purchase price and subtracts resale value.
Why does Total Cost of Ownership matter?
Recurring costs frequently exceed the purchase price, so TCO is the honest comparison between alternatives.
What values do I need to enter?
This calculator takes 6 inputs: Purchase price, Maintenance per year, Insurance per year, Fuel/energy per year, Years owned, Estimated resale value. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.