How to Calculate How Long a New Car Will Take to Pay for Itself

Before making your next car purchase, figure out how long the car will take to pay for itself. The price of gas, the type of car and how frequently the car is used are the easiest factors you can use to determine how long it will take a new car to pay for itself. Using a few simple calculations, you can use these factors to determine if your next car purchase offers the most value for its price tag.

Instructions

1

Use a calculator to perform a few basic calculations about fuel economy. You can also go to the FuelEconomy.gov website for a complimentary car comparison calculator.

2

Determine the miles per gallon (MPG) of your new car. Check the owner's manual or contact your local dealer for miles per gallon information. For this example, let's assume your new car, Car A, can get 30 mpg. If you drive Car A for 20,000 miles a year at an average gas cost of $4 per gallon, the yearly fuel cost for Car A is $2,666, or $12,333 over five years.

3

Make a comparison between your new car and the car it's replacing, if applicable. Let's assume the total yearly mileage for your old car, Car B, is also 20,000. If Car B gets 20 mpg, the yearly fuel cost for Car B is $4,000, or $20,000 over five years.

4

Consider the price tag for Car A. Let's assume Car A has a price tag of $16,000. It would take six years for the car to pay for itself in gas savings.