Personal Finance

Buy New vs Old Car Calculator

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As I write this article it is August. Dealerships want to make way for 2018 models and I keep being bombarded by aggressive sales via radio, flyers, remarketing and my own window shopping habits.  I already almost drove to buy the new car.  While you can’t put the price on the happiness, the plan is retiring early and any decision of this caliber needs to be calculated.

I knew that buying a new car vs keeping my old one would be more expensive, but I decided to create a Spreadsheet to see how more expensive. I then got a bright idea to share it with the world, so those who suffer from the same car addiction that I do can calm themselves down and those who are better off with a new car can do it without feeling the guilt.

At the end of this article, you’ll see Keep Old vs Buy New Car Calculator. You will need to plug in numbers about your current car and then one you want to buy. Any calculator or business model is as good as its assumptions. The more accurate your assumptions are the more accurate your projections would be. That is why I am going to walk you through my assumptions.

Current car situation:

Own: Jeep Wrangler Unlimited Sahara. 3.5 years old.


  • Love the car
  • Least depreciated car in Canada
  • Still, have 1.5 years of powertrain warranty
  • Since it is older I don’t have to be as careful as with a brand new car. Which is why you get a Wrangler in a first place.


  • Bumper to Bumper warranty is over
  • Spent around $3000 on repair and parts (Rad replacement, actuator, and new brake pads/rotors)
  • Carpets are wet from water leak who knows where. Wranglers are notorious for that and I fixed that using warranty less than a year ago. Shame on you Fiat!
  • Needs new tires
  • Stock lights suck and one of them in sweating. Need replacement
  • Can be a bit slow

Want to Buy: Jeep Grandy Cherokee Overland with 5.7-liter engine.


  • With everything calculated current discount (without negotiating) is around $10,000 CAD
  • Will have new warranty
  • Won’t have to spend money on new tires, lights or repairs
  • I wanted that engine for around 10 years now with cars becoming increasing electrical this could be my last chance to own it. That is why I am not looking at 3.6 as I would then rather just keep the Wrangler and don’t need spreadsheets to justify it.


  • Depreciates was faster than Wrangler
  • With 5.7 liters, I will be spending more on gas
  • Will have interest expense on top of everything
  • Won’t be able to throw in garbage bags coming back from the cottage in a brand-new car

General Assumptions

Months: the first decision that you are going to make is the length of comparison. Considerations:

  • The longer I keep the current car the more expensive repairs can become. Especially when the powertrain warranty runs out
  • The longer I finance the new car the more the interest expense
  • Realistically I won’t keep the new car for more than 60 months
  • That is why I went with 4 years or 48 months comparison

Sales Tax: I am in Ontario so Sales Tax is 13% which would be added on the value of the car I buy or lease. If you live in a lower tax area your calculations might be more favorable.

Gas per Year Assumptions:

KM/Miles: depending on where you live you might calculate Gas based on miles per gallon or how many liters it would take for 100km.

Cost of Gas: I’ve put a gas price a bit higher than it is right now in order to account or the inflation in gas prices.

Gas Spending: You will see that I plugged in higher spending for Grand Cherokee than for Wrangler. If you don’t switch class of your cars it should be the other way around – a new car would spend less Gas than your old one.

Your Old Car Assumptions:

Average Price for Similar Cars: this is a good place to start gauging how much you would get in a Trade In or Private Sale. You won’t get the average price, in any case, be ready to receive in the best case around 90% of that.

Amount Owing:  if you still owe money on your car, you will need to subtract that from the value. You might want to check out refinance calculator to see if you could save on the interest with a new load.

Trade In vs Private Sale

Trade In:


  • Saves time and hassle as you simply bring to the dealership
  • You pay smaller sales tax on the new vehicle if you trade in the old on. When you pay 13% tax the savings can be significant. For example, if I paid cash for the new Grand Cherokee the sales tax would be $7,800, but if I bring a car for the trade in – it will only be $4056. You have to add these $3,744 to whatever trade-in value Dealerships will offer you.
  • Dealership are very aware of the tax benefit, when negotiating with them, don’t let them manipulate you by saying “they gave you $3,744” it is not them, it just the tax.


  • You will get lower price if you have sold privately
  • It is harder to both negotiate lower value on new car and higher value on trade in. I suggest either doing it separately or know exactly what you are doing.

Private Sale:


  • You will get higher price if you manage to sell privately (even including the tax benefit)


  • You will have to spend money to prepare the car (detailing, any obvious repairs etc)
  • You will need to get a Carfax report
  • You will need to advertise the car (possibly extra money)
  • You will need to deal with phone calls, emails, and test drives. Going on a test drive with a person you don’t know can be legitimately dangerous
  • Your buyers will need to have their own financing and you will have to deal with check verification

Bottom line: Trade In is an easier solution and with the tax benefit, you don’t lose as much. Private Sale will yield more money, but it is way more hassle and time. Make the choice depending on your financial/time situation.

Depreciation: Even if your car is paid off, you swill losing value every year while it is standing on your driveway. Wrangler is the least depreciated vehicle in Canada, so I’ve put 10% as my assumption.

Regular Maintenance per Year: I’ve included in this everything that is not related to broken parts things like fluid changes, filters, cleaning etc. With an older car, you expect a higher cost for these things.

Extended Warranty Cost: One of the options is to buy an extended warranty from the manufacturer and avoid repair costs. I am deciding now to do it as I still have a powertrain warranty.

Parts: I am including in this everything that needs repairs or replacements. In my case, it would be new tires, lights and a lot of weather stripping (to fix water leaks).

Your New Car Assumptions:

Purchase Price: This is a price I assume I would negotiate for the new car. The problem with this purchase is that a lot of dealerships have to put lower price online just to bring you to the door and won’t negotiate as much. Especially when there is a manufacturer’s rebate as it is the case right now.  I put worst case scenario.

Finance Rate: even if I had enough cash to buy the car it might still be better to finance if APR is low enough and returns on your investments are high enough. Now Jeep offers 0% financing, but from my experience if you go for that – the won’t negotiate on the price of the car. Look at “Interest Cost” in the results to see if it is worthwhile for you to take higher price, but lower APR. I ‘ve put 4% which is what my bank would give me.

Lease Rate:  you might opt out for leasing the car instead of buying. The finance rate would typically be higher.

New Insurance per Year: If you are replacing a relatively new car with the car of the same class your insurance will probably stay the same. If you are replacing a very old car with a newer one, it might go down as the liability portion goes down. In my case, it might go up due to a larger value and bigger engine size. To sure call your insurance advisor to get these numbers.

Regular Maintenance: Even though the car is new you will still have to fluid changes and everything that relates to wear and tear.

Parts Cost: I am zero here, but if you are planning on upgrading wheels or putting in 3 new subwoofers this is where you would plug in those numbers.

Depreciation: I’ve put a bit higher depreciation on Grand Cherokee than on Wrangler. A good way to calculate it is to look at 4-year Grand Cherokee and see how much they lost in value, keeping in mind that would get a lower price.

Residual Value: Your estimate of how much the car would cost at the end of the lease. You would need to know it to calculate lease payments.

Old vs New Car Results:

Total Cost of Ownership: this is an interim value of all of the expenses you will have in keeping the car during the desired period. It doesn’t include the cash flow from selling the car at the end of the period.

Expense Per Month: Simply divides total cost to quantity of periods

Remaining Equity: You subtract depreciation numbers from the sale cost to estimate for how much would you sell the car at the end of the period. This is a very inaccurate assumption. If Gas prices go way up my new car might not sell. If I get into an accident and insurance repairs the car I won’t get that value either.

Real Cost with Remaining Equity:  We are being positive here and subtract sale price from the real cost.

Expense per month: This monthly cost of keeping the car assuming we sell it at the end

Difference per month: How much more per month you would have to spend to get the new car.

My Results:

If I keep the Jeep Wrangler I can save around $40,000 in 4 years vs getting New Grand Cherokee. This seems like a lot especially considering that if I would go to the dealership they would tell me that measly $617 per month I can drive in a brand-new truck. To recap where did this around $40k difference came from.

  • Interest over 4 years ~$3000
  • Increase in Gas Spent ~$1500
  • Most importantly depreciation. Not only I am buying a car that costs $25,000 more, but it also doesn’t hold its value as good so I am not only losing the $25k extra but also the equity that was in the Wrangler itself.

Obviously, these results would be a bit different if Wrangler needed way more repairs or I could sell Grand Cherokee for more money as Depreciation flattens after year 3. Even If all of these things happened I am still saving $30,000k in 4 years.

Opportunity Cost

  • In order to pay these $30,000 in 4 years based on our tax system, I would have to earn around $42,000.
  • Let’s break down $42,000 into 4 years on savings contribution to my pension account which defers tax. That would be $875 per month of pre-tax dollars, very similar to the car payment in post-tax dollars.
  • You can use our Savings Calculator to determine that in 4 years that would be almost $46,000, which if I then keep in my savings account to retirement for another 10 years would be around $72,000. Hopefully with a lower tax rate at retirement that would be $50,000 of tax-free dollars.

Bottom line: I can be $50,000 richer if I don’t buy a new Grand Cherokee right now. I also could potentially die and never have 5.7-liter engine I dreamed of. Can you put a price on the dream? It is up to you to decide. We have calculators to help you along the way 😊

New vs Keep Old Calculator

General Assumptions

Current Car Questions

New Car Questions

Keep Old Car Cash Finance Lease
Purchase Price 0 0 0 0
Trade In Value - 0 0 0
Downpayment (if sell privately) - 0 0 0
Tax - 0 0 0
Total Cost - 0 0 0
Additional Cash Needed - 0 0 0
Payment if Financed or Leased - - 0 0
Total Interest Cost - - 0 0
Maintanance Cost 0 0 0 0
Parts 0 0 0 0
Extented Warranty 0 0 0 0
Gas 0 0 0 0
Insurance 0 0 0 0
Total Cost of Ownership 0 0 0 0
Expenses per Month 0 0 0 0
Remaining Equity if Any 0 0 0 -
Real Cost with remaining equity 0 0 0 -
Expenses per Month: 0 0 0 0
Difference per Month: - 0 0 0

By using this calculator you agree to terms and conditions. These calculators are designed to be informational and educational tools only, and when used alone, do not constitute investment or financial advice. We strongly recommend that you seek the advice of a financial services professional before making any type of investment or deciding on your financial matters. This model is provided as a rough approximation of future financial performance. The results presented by this calculator are hypothetical and may not reflect the actual growth of your own investments. We can't take into account potential lender fees, payoff schedule can be longer than in the estimation. Mycheckweb and its affiliates are not responsible for the consequences of any decisions or actions taken in reliance upon or as a result of the information provided by these tools. Mycheckweb is not responsible for any human or mechanical errors or omissions.

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