A Cost of Ownership Comparison
One day my son Michael and I were discussing buying a car. Is it smarter, from the point of view of cost of ownership,
to buy a new car that gets many miles per gallon versus buying a used car that gets fewer miles per gallon? For the purpose of this comparison,
the cost of ownership is defined as the purchase price of the car , plus the cost of fuel consumed while driving your normal miles per year.
There are several other costs, such as the cost of financing, the costs of maintenance, and
the cost of insurance that are associated with car ownership, but these are widely variable and for the purposes of this comparison will be
considered to basically cancel each other out. A new car typically will have a higher financing cost but a lower maintenance cost. Insurance
is based on type of vehicle and age of vehicle as well as the owners preference. Again we will consider these costs to be roughly the same for each vehicle.
The question is, how many years does it take for the cost of ownership and the cost of operation of the used car to equal the new car?
So have at it. Enter the cost of a new car and its mileage, the cost of
an older used car and its mileage, the typical number of miles you drive in a year and the current cost of a gallon of gas.
Just delete or type over the numbers in the boxes as they are for example only.