What is Total Cost of Ownership?
Total Cost of Ownership (TCO) is the complete cost of owning an asset over its whole life, not just what you pay to buy it. The purchase price is often only half the story — running costs, maintenance, energy, support and disposal can add up to as much again. Calculating TCO reveals the real cost so you can compare options fairly, because a cheaper purchase price doesn't always mean a cheaper asset.
Does TCO include depreciation?
Yes. Depreciation is simply the value an asset loses over time, which equals what you paid minus what it's worth at the end. Because this calculator counts the full purchase price and then subtracts the resale or salvage value, depreciation is already built into the net cost of ownership. The result even shows the depreciation figure so you can see it clearly.
Tailored for cars, IT and equipment
Different assets have different cost drivers. A car's main costs are fuel, insurance, registration and maintenance; IT infrastructure adds software licensing, power, hosting and support; equipment has installation, energy, servicing and downtime. Choose the asset type and the calculator gives you the right fields, then shows a visual breakdown of where the money goes.
Why TCO matters for buying decisions
Whether you're comparing two cars, choosing between cloud and on-premises IT, or deciding which machine to buy, TCO gives you a like-for-like comparison. A low purchase price with high running costs can easily cost more over time than a pricier option that's cheaper to run — and TCO is the only way to see that clearly before you commit.
Assumptions & What's Not Included
This estimates the true multi-year cost of owning an asset (like a car). Its assumptions:
- Estimated running costs — fuel/energy, insurance, registration, servicing, and tyres are based on the figures you enter or typical estimates; your real usage and prices will vary.
- Depreciation — the asset's value loss is modelled on an assumed curve/rate. Actual resale value depends on make, condition, mileage, and market demand.
- Financing separate — if you're borrowing to buy, loan interest is only included where you enter it; otherwise the tool shows the ownership/running cost, not finance cost.
- Fixed annual assumptions — costs are treated as steady per year and not inflation-adjusted unless stated; timing within the year isn't modelled.
- Not included — unexpected repairs, accident costs, fines, and tax implications are not factored in.
Total-cost-of-ownership is a planning estimate to compare options, not an exact forecast of what you'll spend.
Worked example
A $40,000 car kept for 5 years, with $5,000 total finance interest, $5,100 a year of running costs (fuel, insurance, rego, maintenance) and an $18,000 resale value.
| Purchase + finance | $45,000 |
| Running costs (5 × $5,100) | $25,500 |
| Less resale value | −$18,000 |
| Net cost of ownership | ~$52,500 |
| Average per year | ~$10,500 |
What it tells you: The car really costs about $52,500 over five years — roughly $10,500 a year — not the $40,000 sticker price. A cheaper car with higher running costs can easily end up costing more.
Frequently Asked Questions
What is Total Cost of Ownership (TCO)?
Total Cost of Ownership is the full lifetime cost of an asset, not just its purchase price. It adds the upfront cost, all recurring running and maintenance costs over the ownership period, and any one-off and end-of-life costs, then subtracts the resale or salvage value at the end.
Does TCO include depreciation?
Yes. Depreciation is the difference between what you paid and what the asset is worth at the end. Because the calculator counts the full purchase price and then subtracts the resale or salvage value, depreciation is already included in the net cost of ownership.
What asset types can I calculate?
You can calculate the total cost of ownership for a car or vehicle, IT infrastructure such as servers and hardware, or equipment and machinery. Each type has tailored cost fields for its main cost drivers.
Is this calculator private? Do you store my data?
Yes, it is completely private. Every calculation runs locally in your browser, so the figures you enter are never sent to a server, never stored, and never shared. There are no accounts and no sign-up.
More Free Calculators