What is Total Cost of Ownership?

Total Cost of Ownership (TCO) is the real price you pay for a product over its entire useful life. It includes the purchase price, but also factors that most shoppers overlook: repair costs, energy consumption, replacement accessories, and depreciation. When you compare two products on TCO instead of sticker price, the picture often changes dramatically.

Consider a concrete example. A budget laptop costs $500 and typically lasts about three years before performance degrades or components fail. Its annual cost is roughly $167. A higher-end model at $1,200 may last seven years with one $150 repair along the way, bringing its annual cost to about $193. The gap narrows considerably, and if the pricier machine lasts eight years, it actually becomes the cheaper option at $169 per year.

Energy costs matter more than most people realize. A fifteen-year-old refrigerator can consume 600 kWh per year, while a modern Energy Star model uses around 400 kWh. At average electricity rates, that difference adds up to $30-$50 annually, potentially $400 or more over the life of the appliance. TCO captures these running costs so you can see the full picture.

The purchase-price-only mindset also hides the cost of frequent replacement. Buying a $25 kettle every two years costs $125 over a decade. A $90 stainless steel kettle lasting ten years costs $90 total. The “expensive” option saves $35 and keeps four kettles out of landfill.

This calculator helps you run the numbers for your own devices. Enter what you paid, how old the item is, and how long you plan to keep it, and we will show you the true cost of keeping your current device versus buying new, including environmental impact.