Should I keep my car or change it? The numbers to compare
A newer or more efficient car can cost less to run and still cost more overall. The fair comparison is the future cost of each option from today—not money already spent.
Ignore sunk costs
What you paid for the current car in the past is not the decision. Compare what happens from now: its value today, expected value later, future running/repair costs and the equivalent future costs of the replacement.
A three-year comparison structure
| Keep current car | Change car |
|---|---|
| Current value − value in 3 years | Purchase value − value in 3 years |
| 3 years of fuel/energy | 3 years of fuel/energy |
| Tax, insurance, servicing | Tax, insurance, servicing |
| Expected repairs / maintenance allowance | Expected repairs / maintenance allowance |
| — | Dealer margin, fees or one-off change costs if applicable |
| Finance interest if applicable | Finance interest if applicable |
Worked illustration
Current car: worth £8,000 today and expected to be worth £4,500 in three years, so depreciation is £3,500. Replacement: costs £22,000 and is expected to be worth £14,000, so depreciation is £8,000. If the replacement saves £1,000/year in energy and maintenance, that is £3,000 over three years—still £1,500 less than the extra depreciation in this simplified example.
Repair risk is a scenario, not a certainty
It is reasonable to include a repair allowance for an older vehicle, but avoid treating a possible £3,000 failure as guaranteed unless there is evidence for it. Run more than one case: routine maintenance only, a moderate repair allowance, and a high-cost case. That shows how much repair risk is needed before changing becomes financially cheaper.
Financially cheapest is not automatically the right choice
Reliability, safety equipment, accessibility, towing requirement, charging access, comfort and time without a car can matter. The calculator is most useful for isolating the money question so those non-financial reasons are not disguised as financial savings.
Check the break-even saving required
A useful reverse question is: how much would the replacement need to save each year to recover its extra depreciation and change costs? If changing adds £4,500 of three-year depreciation and fees, the replacement needs to save £1,500 per year elsewhere just to break even financially. That turns a vague “newer car should be cheaper to run” claim into a target you can compare with realistic fuel, tax, servicing and repair differences.