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What is "Cost to Own?"

August 12, 2016

"Cost to own" is sometimes referred to as "true cost to own" or TCO. It refers to the cost of ownership, usually over a period of five years. Cost to own is a figure that car shoppers often research when they're trying to decide which vehicle to purchase or lease. Edmunds and Kelley Blue Book estimate the ownership costs of every vehicle and publish the results to their websites, making them some of the most popular places to find the numbers.


Kelley Blue Book (KBB) and Edmunds both take six costs into account when they calculate  the total ownership cost of a vehicle.

  • Fuel
  • State fees
  • Insurance
  • Financing
  • Repairs
  • Maintenance

The estimated amounts vary between the two sites. In the case of the 2015 Chevy Spark LS hatchback, the difference is about $3,000 over five years. Most of that is due to the estimated insurance cost. We can assume Edmunds is not conservative in their insurance estimate, since they report $3,555 for it and KBB only reports $1,820. Cost to own (as reported online) is only an estimate. If you want to know exactly what a vehicle will cost, you have a lot of calculation and research ahead of you.


Online cost of ownership estimates are useful when you want an idea of how much money you'll spend during the first five years of ownership. It's not very helpful if you want to know exactly how much it will cost. Think of it as a shopping tool, not a predictive financial tool. In other words, it is not "total cost of ownership," the accounting metric that is meant to be exact. It's just a fairly rough estimate.

When you look up the TCO of a vehicle, you can see a breakdown of the costs, into the six categories above. Here's an example, using the Chevy Spark. This is useful for comparing different models. Although, insurance and state fees may not be accurate. You're better off getting insurance quotes and looking up your state's particular fees if you want to compare those.


  1. As we have stated, be skeptical. Some expenses, such as insurance, vary a great deal from state to state. Also, take care of your vehicle so it doesn't depreciate more than it should. Depreciation is a cost.
  2. Next, be sure you've found the exact model. The Chevy Spark, our example vehicle, comes in dozens of forms. There's a hatchback version and a sedan version, both of which are available in several trims and with various engines and two transmission types. All of them will require different expenses.
  3. Don't forget that cost to own doesn't include the actual sale price of the vehicle. You can save lots of money if you do your homework, locate a deal and negotiate the price.

Lucky for you, locating the best deal around is easy these days. Just request online quotes from local dealers. When you request them from us, we give you hard-to-find information, such as the dealer invoice price of a vehicle, that will help you negotiate your deal.

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