An overlay is the middle answer between sealcoating and full replacement: a new lift of hot mix over the existing asphalt. The calculator above prices it the simple way, square footage times a rate, using an example of $3.25 per square foot. What the calculator cannot tell you is whether the driveway in front of you should get one. That part is on you, and it is where overlay money is made or wasted.
An overlay is only as good as what is under it
New asphalt does not fix a failed base. It hides one, briefly. Alligator cracking, wheel ruts, and spots that flex underfoot all say the problem is below the surface, and cracks in the old pavement will telegraph up through the new lift. The right candidates are structurally sound driveways that look tired: surface cracking, raveling, gray and porous asphalt. Walk it, probe the soft spots, and cut out and rebuild any failed areas before the overlay, priced as their own line.
Watch the edges and transitions
A new lift raises the whole surface. That matters everywhere the driveway has to meet something fixed: the garage slab, the sidewalk, the street gutter. Without edge milling, you build a bump at the garage door and a lip at the street that traps water. Milling those transitions is real labor with real equipment time, so carry it in the quote instead of absorbing it. This is a big piece of why two overlays of identical square footage can deserve different prices.
When an overlay is money wasted
If more than a small share of the surface is alligatored or the drainage is wrong, an overlay is an expensive way to buy the customer a short delay. Tear-out and repave is the honest recommendation, and it is not as far away in price as customers assume. A sanity check at the example rates: a 480 square foot two-car driveway overlay at $3.25 is $1,560. Removing the old asphalt at the example add-on of $2 and repaving at the 2 inch example rate of $4.50 comes to $6.50 per square foot, or $3,120 on the same driveway. The full decision framework is in asphalt overlay vs replacement, and pricing the replacement side is covered in how to price an asphalt driveway, with numbers on the asphalt driveway cost calculator.
The rates on this page are examples. PriceDesk runs this calculator with your own overlay, tear-out, and paving rates on your phone, free for 14 days, so both options are quoted before you leave the driveway.