The Finance Algorithm

New vs Used Car Calculator

Compare the true cost of buying new versus used over time

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$45k

Drive-away price of new car

$
$25k

Price of comparable used car

3
50,000
$

What the same model sells for at the age it will be when you sell - check current listings

$

What the same model sells for at the age it will be when you sell

%
6.5%

Often lower for new cars

%
8.5%

Typically higher for used cars

5
$
$5k

The button asks our AI to explain these figures in words.

New vs used: total ownership cost

Winner

Used

lower total cost

Total savings

$12,339

vs the other option

New net cost

$26,959

interest + lost value

Used net cost

$14,620

interest + lost value

What you'd pay each month

A used car's loan is smaller but its rate may be higher.

$783New (6.5%)$410Used (8.5%)

Interest + value lost

From your estimates of what each car will be worth when you sell.

$26,959New$14,620Used

Interest vs value lost

Two layers in each bar: the loan interest and the value the car loses by the time you sell.

$26,959New$14,620Used

How it works

A used car costs less to buy and usually loses fewer dollars of value, but the loan rate can be higher and it may need more repairs. This calculator compares what each really costs you over the years you'll own it: the loan interest plus the value it loses, from your estimates of what each will be worth when you sell. Repaying the loan itself isn't counted as a cost, because the car is worth that money.

  1. 1Enter the new car's drive-away price and the used alternative's price.
  2. 2Add the used car's age and kilometres.
  3. 3Estimate what each will be worth when you sell, from listings of the same model at that age.
  4. 4Enter the loan rate quoted for each and your deposit.
  5. 5Set how long you plan to keep the car.

The figures today

As of 7 November 2026, the lowest car loan rate from a bank or lender is 5.74%, from Westpac's Car Loan, while the typical best across 42 institutions is 6.99%. The lowest carmaker finance rate is 2.70%, from Chery Motor Finance's Chery 4.46% EV Comparison Rate Offer, while the typical best across 12 institutions is 4.99%.

Car loan rates

Worked examples

Family SUV Comparison

A new SUV at $45,000 against the same model 3 years old at $28,000 with 45,000 km, owned for 5 years with a $5,000 deposit. Rates of 6.5% and 8.5%. In 5 years the new one should sell for about $25,000 and the used one for about $15,000.

New car price
$45,000
Used car price
$28,000
Used car age (years)
3
Used car kilometres
45,000
New car loan rate
6.5%
Used car loan rate
8.5%
Years you plan to own
5
Deposit available
$5,000
New car's value when you sell
$25,000
Used car's value when you sell
$15,000

The new SUV costs $6,959 in interest and loses $20,000 of value: $26,959. The used one costs $5,313 in interest and loses $13,000: $18,313. On these estimates the used car is $8,646 cheaper over 5 years, before servicing, repairs and insurance.

Questions people ask

Is it smarter to buy new or used?
It depends on the prices, the loan rates and how much value each loses while you own it. Enter your own figures - the cheaper option is the one with the lower interest plus lost value, before running costs.
Do I pay more interest on a used car loan?
Some lenders charge more for older cars or offer their lowest rates only on new ones. Get a quote for each car - a smaller loan can still mean less interest overall even at a higher rate.

The terms, in plain English

Depreciation
The loss in value as a car ages - the price you paid less what it sells for.
Certified Pre-Owned (CPO)
Used cars inspected and certified by manufacturers, often with extended warranty.
Drive-Away Price
The total price including all on-road costs - what you actually pay to drive the car away.

Official sources

Depreciation Calculator

Calculate vehicle depreciation over time

Total Cost of Ownership

Full cost including all expenses

Car Loan Calculator

Calculate loan repayments