Total Cost of Ownership Calculator
Compare two options on price plus running costs, and find the exact year the cheaper purchase stops being the cheaper choice.
Resale is treated as a flat amount recovered at the end rather than a depreciation curve, and no adjustment is made for the value of money over time. Both simplifications matter more the longer the span. Nothing is uploaded.
The crossover is a date, and it decides everything
A $300 option costing $180 a year to run, against an $850 one costing $60: the efficient one is the better buy after 4.58 years and the worse buy before it. Neither answer is right in general. "Which is cheaper?" has no answer at all until someone says how long they mean to keep it — and that is exactly the input people leave out of the argument.
| Kept for | Cheap to buy | Cheap to run | Cheaper |
|---|---|---|---|
| 1 year | $480 | $910 | Cheap to buy |
| 2 years | $660 | $970 | Cheap to buy |
| 3 years | $840 | $1,030 | Cheap to buy |
| 5 years | $1,200 | $1,150 | Cheap to run |
| 8 years | $1,740 | $1,330 | Cheap to run |
| 10 years | $2,100 | $1,450 | Cheap to run |
| 15 years | $3,000 | $1,750 | Cheap to run |
Both cost curves are straight lines, so the crossing is exact arithmetic rather than a search: the difference in what you pay at the start, divided by the difference in what you pay each year. That is its practical use — it turns an argument about efficiency into a single date you can hold against your own plans.
The sticker price ranks them wrongly
Over ten years the cheap option costs $2,100 and the efficient one $1,450 — the one with 2.8 times the sticker price is roughly a third cheaper to own. Over two years the ordering reverses, at $660 against $970. The price is the only number on display and the only one that cannot answer the question on its own. Cost per year falls for both as the purchase spreads further, approaching the running cost without ever quite reaching it, which is why a thing kept a long time ends up costing almost exactly what it costs to run.
When there is no crossover at all
Two options that cost the same to run never cross — one is simply cheaper forever, and the
span does not matter. Nor do they when the dearer purchase is also dearer to run, which
happens more often than the marketing suggests. The calculator says so rather than quoting a
crossover far in the future, because those are different situations and a large number reads
like the same answer as no number.
Resale moves the crossing forward, by exactly the amount recovered divided by the gap in
running costs. Adding $200 of resale value to the efficient option here brings its crossover
from 4.58 years down to
2.92 — which is a large move for a modest
sum, and the reason resale is worth estimating rather than ignoring.
How to use
- Enter each option with its price and yearly running cost.
- Add any resale value you expect to recover.
- Say how long you plan to keep it.
- Read the total for that span, and where the two cross.
Frequently asked questions
Which is cheaper, the cheap one or the efficient one?
The question has no answer until you say how long you will keep it. A $300 appliance costing $180 a year to run against an $850 one costing $60 crosses at 4.58 years: the efficient one is the better buy after that and the worse buy before it. Both answers are right, on different spans.
How is the crossover worked out?
Both cost curves are straight lines, so it is exact arithmetic rather than a search — the difference in what you pay at the start divided by the difference in what you pay each year. That is its practical value: it turns an argument about efficiency into a single date you can compare against your own plans.
Does the purchase price tell me which is cheaper?
Not once running costs differ. Over ten years the cheap appliance above costs $2,100 and the efficient one $1,450 — the one with nearly three times the sticker price is a third cheaper to own. Over two years the ordering reverses. The price is the only number on display and the only one that cannot answer the question alone.
Do two options always cross?
No. Options that cost the same to run never cross, and one is simply cheaper forever. Nor do they when the dearer purchase is also dearer to run. The calculator says there is no crossover rather than quoting one far in the future, because those are different situations and a large number reads like the same answer as no number.
How much does resale value matter?
More than most people allow for. It brings the crossover forward by exactly the amount recovered divided by the gap in running costs, so $200 of resale on the example above moves it from 4.58 years to 2.92. That is a large shift for a modest sum, which is why it is worth estimating rather than ignoring.
Why does cost per year keep falling?
Because the purchase price spreads over more years while the running cost stays the same. It falls towards the running cost without ever reaching it, which is why something kept a long time ends up costing very nearly what it costs to run.
Is inflation or interest accounted for?
No. Resale is treated as a flat amount recovered at the end rather than a depreciation curve, and no adjustment is made for the value of money over time. Both simplifications matter more the longer the span, so treat a fifteen-year comparison as a shape rather than a figure.
Does this send anything anywhere?
No. Every figure is computed in your browser, and nothing is uploaded or stored.
🔒 This tool runs entirely in your browser. Nothing you enter is uploaded, logged, or stored.