Every new phone launch and every dealership offer asks the same question: is this the moment to upgrade? Most people answer with a feeling. This guide answers it with a number instead: what it costs per month to own something that loses value, and when that cost is lowest.
It is the fourth step of our Money in your 20s reading path. Once you have split your salary, the biggest decisions left are what to buy, how long to keep it, and what you owe. The last of those is covered in Should You Prepay Your Loan?.
Owning costs money, even when you pay nothing
A phone in your pocket or a car in the street looks like an asset, but it works like a subscription. Each month it is worth less than the month before, and that lost value is a real cost, just one that never appears as a payment. Add repairs, a replacement battery or new tyres, and the monthly price of owning becomes visible:
Monthly cost of owning = (purchase price − resale value − selling costs + repairs and upkeep) ÷ months owned
Fuel, insurance and road tax matter for a car, but they do not depend on how old it is, so they stay out of this comparison.
Depreciation is front-loaded
Resale value does not fall in a straight line. It drops hardest at the start, then slows. Public data shows the pattern:
- Cars. Carfax data cited by Experian puts the first-year loss at about 20%. iSeeCars reports an industry average of 45.6% after five years, and the spread by model is huge: an iSeeCars analysis cited by Experian found five-year losses from 9.6% to 63.1%.
- Phones. BankMyCell, which tracks buyback offers (updated January 2026), lists typical iPhone depreciation of 16.7%, 22.5% and 33.6% for years one, two and three, and notes that prices tend to drop with each new release. Different trackers and models give different numbers.
Because the data varies so much, every assumption in the calculator below is editable. The defaults are only a starting point:
These are the calculator's defaults (a phone losing 25% in year one and 15% a year after; a car losing 20% in year one and 10% a year after), not market data.
Find the cheapest month to own it
Because the first year is so expensive, replacing something quickly gets the highest monthly price. Because repairs creep up with age, keeping it forever eventually stops paying off too. In between is a point where the average monthly cost is lowest. Try it with your own numbers:
With the default assumptions the pattern looks like this.
For a €1,000 phone (25% lost in the first year, 15% a year after, a battery swap and 5% selling costs):
For a €20,000 car (20% lost in year one, 10% a year after, upkeep that starts at €80 a month and grows 15% a year):
The phone gets cheaper to own for years, with a flat bottom around five years. The car bottoms out near six and a half years and then creeps up as repairs grow. In both cases most of the saving arrives by the third year: going from one year to three cuts the monthly cost by about 27% for the phone and about a third for the car, while the last few years add only a little.
Keep or sell: the question you can actually ask
The curve answers "how long should I plan to keep it?" when buying. When you already own something, the real question is about the next 12 months:
- Cost of keeping it another year = what it will lose in resale value + repairs and upkeep.
- Cost of replacing it = the best average monthly cost of owning a new one.
Keep it while the first is lower than the second. The calculator's last panel does this for you: enter the age and what you could sell it for today, and it says whether keeping is cheaper per month than a new one would be. At the cheapest month on the curve the two costs are equal, which is why that month is the answer to the original question.
Upgrade less often, invest the difference
The most useful idea in this guide is the last one. Replacing a phone every year instead of every five or so costs about €9 more per month with the default numbers. That is small enough to ignore and large enough to matter: invested at 6% a year for ten years, it becomes about €1,500, on roughly €1,100 of contributions (see compounding). The calculator's upgrade panel lets you test your own cadence and return.
For a car, the amounts are bigger and so is the effect. A decision that costs €100 more per month for ten years adds up to €12,000 of contributions before any growth.
Phones: the specifics
- Release cycles. Resale prices tend to drop around new launches, so if you have already decided to sell, doing it before the next release usually brings more.
- Battery and software support. A fresh battery can add years of use for a small cost, and software support has a limit. Check the manufacturer's stated support period for your model before planning to keep a phone for five or more years.
- Trade-in versus private sale. A trade-in is quick but usually pays less than a private sale. Put your own number on the convenience.
Cars: the specifics
- Financing adds a second cost. If you borrowed to buy, the interest is part of what owning costs. A depreciating asset bought on a loan is the situation where our loan prepayment guide matters.
- Choose by model, not by brand mood. The range of five-year losses (9.6% to 63.1%) means the model you pick moves your monthly cost more than the year you sell.
- Repairs grow. The model assumes upkeep that rises with age, which is what makes very old cars stop being cheaper per month.
Common mistakes
- Comparing the instalment, not the total cost. A low monthly payment can hide a high price and a long loan.
- Upgrading for a marginal improvement. If the new one does not change what you can actually do, the first-year loss is the price of novelty.
- Forgetting selling costs. Fees, haggling and the time to sell all reduce what you get.
- Treating a high resale value as free money. A phone that "keeps its value" still costs real money to own.
- Ignoring needs. If you rely on a better camera or a more reliable car for work, that is a benefit the calculator does not count. It compares money only.
Key takeaways
- Owning a depreciating thing has a monthly price: lost resale value plus repairs and upkeep, divided by the months you keep it.
- Value falls fastest at the start. Carfax data puts a new car's first-year loss near 20%, and iSeeCars reports a 45.6% average after five years, with huge differences by model.
- The average monthly cost is lowest at one point, usually after several years, and most of the saving is captured by about year three.
- For something you already own, compare the next 12 months of keeping it with the best monthly cost of a new one.
- Replacing less often frees money that can compound, as the upgrade panel shows.
- Every assumption is editable. Use real resale quotes for your model.
Educational only — not personalised investment advice.