Consumption math

The payment is a lie.

Dealers quote the loan. Ownership quotes everything else: insurance, fuel, maintenance, plates, and the value that evaporates in the driveway. This is the monthly number that actually hits a FIRE plan.

The loan

The rest of the invoice

Dealer payment

$652/mo

True monthly cost

$1,560/mo

Hidden extras add $909 every month — 2.4× the advertised payment.

Loan $652
Insurance $180
Gas $129
Upkeep $90
Fees $35
Depreciation $475

Amount financed

$33,000

Fuel / month

$129

28 mpg · 12,000 mi

5-year haul

$86,267

Payments + running costs + value lost

What “true cost” includes

The advertised payment is standard amortization: principal after down payment, monthly rate r = APR / 12, term n months:

PMT = L · r · (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Fuel is (miles per year ÷ MPG) × gas price, spread over 12 months. Insurance, maintenance, and registration are cash costs. Depreciation is not a bill, but it is a cost: the calculator takes your annual depreciation rate and spreads the first-year dollar loss across months, and compounds that rate over five years for the long-haul total.

New cars often lose ~15–20% in year one. Used cars depreciate slower but bring higher maintenance. Either way, a $400 payment wrapping a $1,100 true cost is a FIRE leak: $1,100 a month is $13,200 a year, which is $330,000 of required portfolio at a 4% withdrawal rate.

Figures are illustrations. Your insurance quote, commute, and residual value will differ. Use the sliders until the bar chart matches the car you are actually considering.