Car vs Stock Market Calculator
See the true opportunity cost of buying a car vs investing that money in the stock market.
Quick start — click a scenario or enter your own numbers below:
Loan: $30,000
Loan payment
$594/mo
over 60 months · $5,642 interest
Running costs
$450/mo
gas + insurance + maintenance
Total monthly car cost
$1,044/mo
loan + running
Monthly Car Costs
If You Don't Buy the Car
Transit, rideshare, bike share, etc.
loan $594 + running $450 − alt $150
Market Assumptions
New cars avg 15–20%/yr first 3 yrs
S&P 500 historical avg ~10%, conservative ~7–8%
After 5 years — investing vs buying a car
Investing wins by $57,610
Portfolio: $73,140 vs car resale value: $15,530· portfolio overtakes car value at year 2
Car Value vs Portfolio Growth
Crossover at yr 2Orange line: car value (depreciates). Blue line: portfolio growing from your down payment + monthly savings. Lines cross at year 2 — that's when the portfolio permanently surpasses the car's value.
Loan Payment Breakdown
Principal exceeds interest after month 1 — more than halfway through your 60-month loan
Buy the Car
Invest Instead
Net Car Cost
−$52,112
all costs minus resale
Opportunity Cost
$57,610
portfolio vs car value
Car Resale (5yr)
$15,530
at 15%/yr depreciation
Common Questions
What is the true cost of owning a car?
The true cost includes down payment, loan payments (principal + interest), fuel, insurance, maintenance, minus the resale value at the end. For a $35,000 car financed at 7% over 5 years: $5,000 down + $35,690 in loan payments + $27,000 running costs − $15,000 resale = ~$52,690 net. On top of that, the portfolio opportunity cost adds another $40,000+.
Why does investing almost always win financially?
Cars depreciate rapidly — most lose 50–60% of value in 5 years. Meanwhile, compound interest in the market grows your money exponentially. The combination means the 'invest instead' path almost always builds more wealth. The question is: how much does the car cost in foregone investment returns?
What is the opportunity cost of a car?
Opportunity cost is what you give up by buying the car instead of investing. It equals the portfolio value minus the car's residual value. For a $35K car over 5 years with 8% market returns, the opportunity cost is typically $40,000–$60,000 — that's wealth you could have built instead.
What should I enter for alternative transportation?
Enter your realistic monthly cost for transportation without a car: transit passes, occasional rideshare, bike share, or car rentals. In most US cities, $100–$300/month covers most needs. City dwellers near transit might enter $50–$150; heavy rideshare users might enter $200–$400.
Does this mean I should never buy a car?
Not at all — this calculator shows the pure financial comparison. Lifestyle value, time savings, job requirements, and practicality are real factors. A car can be essential for work, family, or living in car-dependent areas. Use this to understand the financial cost so you can make an informed decision.