# How do you calculate the total cost of a new car?

Formula for calculating dealer cost:

1. Example: Base Invoice + Options + Destination – Holdback = Total Dealer Cost.
2. What is holdback? A hidden amount that manufacturers give back to a dealer. It is a percentage of the MSRP or the Invoice price. (See calculations below.)

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## Accordingly, how do you calculate total cost of ownership?

How do you calculate the total cost of ownership? The formula to calculate the total cost of ownership is to add the initial purchase value to all hidden costs and subtract a possible resale value or residual value in the end.

Keeping this in consideration, what is the total cost to buy a car? The average monthly payment on a new car was \$575 in the second quarter of 2021, according to credit reporting agency Experian. But that’s far from the true cost to own a car. For vehicles driven 15,000 miles a year, average car ownership costs were \$9,561 a year, or \$797 a month, in 2020, according to AAA.

## Likewise, what is total cost of ownership with example?

Total cost of ownership is the sum of the purchase price of an asset plus operating costs for its lifetime. A simple example would be the cost of owning a car. You can buy a car, but you will still need to pay license fees and insurance premiums, and it must regularly be serviced.