Car Depreciation Calculator

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How Car Depreciation Calculator Works?


Use our automobile depreciation calculator with ease that is completely free and there are no strings attached. To find out what the value is, simply follow the instructions outlined below.


Input:



Output:


The car depreciation calculator provides the answer in the form of a car depreciation chart, which shows how much the car has depreciated over the specified number of years.


FAQs:


How much does an accident depreciate a car?


The amount of depreciation an automobile suffers following an accident depends on the severity of the damage. As far as I know, the only thing worse than having a car totaled is having one of your wing mirrors broken. Even if the latter is totally repaired, you can still expect significant depreciation on the former.


Do hybrid cars lose value faster?


Hybrid cars, on the other hand, lose value more slowly than gasoline-powered vehicles. According to a study done in 2017, this is no longer the situation when hybrid automobiles initially hit the market. So, if you want to keep the value of your car for a longer period of time, you should consider purchasing a hybrid.


What is the depreciation rate per mile?


Car depreciation per mile varies greatly from vehicle to vehicle, therefore there is no one-size-fits-all formula. It's important to conduct some research online and see how much your car will cost you according to how many miles you drive it.


How fast does the value of an automobile go down?


The depreciation of a vehicle occurs at a rapid pace. By the time you acquire your car, depreciation will have already begun, and it will be worth only around 91% of what you paid for it.


How much does a car depreciate?


Years after purchase Percentage of original value lost (%)
1 19
2 31
3 42

Beginners Guide to Car Depreciation Calculator


Using this automobile depreciation calculator, you can figure out how much your car will be worth after it has been driven for some time. You're probably aware that a car's value plummets immediately after purchase and continues to decrease year after year. You can use this car depreciation calculator to figure out how much your automobile is worth or to see if the price you were offered for a used car is reasonable. Additionally, it helps in calculating the most important part of the overall cost of car ownership: the actual yearly cost of car ownership.
If you're interested in learning more, go here.
How to calculate car depreciation, what are the most and least depreciating cars, and how much does it really cost to buy a car?


What Is Depreciation?


Why does a used thing sell for less money than a brand-new item that is exactly the same? As a result of the product's diminishing worth, A car's depreciation, or loss in value over time as a result of use, deterioration, and the introduction of newer models with more sophisticated features, is an example of depreciation.
In any case, this is a well-documented fact. The fact that depreciation can be estimated precisely is less clear. It's common for people to estimate the depreciation value of a used car based on their own intuition, which is speculative and at most, a guess. This could lead to an unintended loss in a negotiation.
To offset this, you may use our car value estimator to figure out how much your vehicle will depreciate over time. A car depreciation formula is used, and this is explained in more detail below.


Car Depreciation Formula


In order to figure out the worth of a used car, we require the following input variables.
The car depreciation formula is as follows:
A=C×1+100/rn
C = Initial Cost
r = Depreciation rate
n = Number of years


Car Depreciation Example1:


If you're in the market for a new car, you can either buy a brand new one or a four-year-old used car, both of which are expected to be replaced within five to six years. It's obvious that all of the probable costs and benefits of the newer model must be taken into account when making a decision on whether or not to buy a new car. The issue of automotive depreciation persists, though, and it is a proven truth that the year of manufacture of an automobile is the most important determinant of its market price.
The graph above can be used to show that the depreciation rate for this model is on the low end if a new automobile of our chosen brand and model costs $56,000 and a 4-year-old used one costs on average $38,000. Using this information, a table like this may be used to compare new versus used vehicles based on their cumulative annual costs:
A comparison of two different automobile purchases, taking into account both depreciation and upkeep.

Type Depreciation per year Maintenance per year Total cost per year
Brand new $4,806 $1,500 $6,306
4 years old $2,785 $2,000 $4,786

There is a correlation between maintenance, depreciation, and total cost each year - yet in actuality, maintenance increases while depreciation lowers each subsequent year. The annual depreciation was estimated with the help of this vehicle depreciation calculator, and the results are only an estimate in real life.
On average, a brand-new car will cost $1,500 more per year to maintain than a second-hand vehicle. The increased rate of depreciation like honda depreciation is to blame for $1,000 of those. In addition, you will have to make a higher down payment upfront. Which choice one should choose is obviously dependent on their financial situation, but having an idea of how much it will cost will help them make a better-informed decision.


Example 2:


In the United States, automobiles depreciate at a rate of 14% each year. How much would a $35,000 automobile be worth in five years if you buy it now?


Solution:


P = $35,000,
R =14%,
n = 5
The value of the car after n years, A = P * (1 - R/100)n
= $35,000 * (1 - 14/100)^5
= $35,000 * (1 - 0.14)^5
= $35,000 * (0.86)^5
= $35,000 * 0.4704
= $16,464
Answer: The approximate value of the car after 5 years is $16,464


Example 3:


John purchased a new car for $550000. The value of the car depreciates by 35% in the first year and by 14% p.a. thereafter. How much will the car be worth after 3 years?


Solution:


P = $550000,
R1 =35%,
R2 =14%,
n = 3
The value of the car after n years, A = P * (1 - R/100)n
The value of the car after 1 year, A = 550000 * (1 - 35/100)1b
= $550000 * (1 - 0.35)^1
= $550000 * 0.65
= $357,500
The value of the car after 3 years, A = 357,500 * (1 - 14/100)3-1
= $357,500 * (1 - 14/100)^2
= $357,500 * (1 - 0.14)^2
= $357,500 * (0.86)^2
= $357,500 * 0.7396
= $246,407
Answer: The value of the car after 3 years is $246,407


Why Is The Value Of My Car Decreasing?


Car depreciation is influenced by the following factors:



You bought two identical cars and parked one in a garage, which one do you think will be worth more in three years? Right, the one with fewer kilometers on the odometer. It is also possible to drive both but only maintain one. Which one will lose less value over time? There you go, the one that's in the best shape. Treating your car well is essential. Make sure you follow the manufacturer's recommended servicing intervals. Be sure to save all of your receipts and paperwork, and take good care of your vehicle by keeping it tidy.


How Quickly Does The Value Of A Car Depreciation?


After purchasing a vehicle, the value of the vehicle drops to 91 percent of its initial market value. Why? It all depends on how the next prospective buyer sees things. When you acquire a car, its status changes from "new car" to "old car," and its value plummets even after only one minute of use.
Then, the value of the car continues to decline year after year. The following values (source) are used in our car depreciation calculator:


Car Depreciation calculators presume that your car will be worth nothing in about 10.5 years. The market value will be incredibly low, but you can still sell it to individual buyers.
A car's depreciation rate is a term used to describe the rate at which a car's value decreases over time. If you want to know what the value will be at a certain point in the future, you can use a car depreciation calculator to do it.


How to Calculate Depreciation?


There are two methods to utilize this vehicle depreciation calculator.
The first step is to enter the car's purchase price, which is often the sticker price. As a result, the previous paragraph's car depreciation calculator will instantly update with the new figure. You can also enter a custom automobile age to determine the value when a specific amount of time has passed (for example, six months or seven years).
The second approach is to make an educated guess regarding the car's purchase price. A three-year-old automobile would cost you $12,000 if you wanted to buy it. The car depreciation calculator will reflect the car's initial value – in this case, over $20,500 – if you enter the value into the "3 years" box. To put it in perspective, brand new automobile costs around the same as that. If the price is more than $25,000, it appears like you've got a great deal! You might also consider leasing it if you're still unable to afford it.


Which Automobiles Depreciate The Least?


A car's depreciation rate varies widely among different models. Some automobiles depreciate more quickly than others. The five-year depreciation rate differential between two cars can be as much as 40%.
An automobile research business, conducted a comprehensive study to assess the depreciation rate of various vehicles. Initially, they looked at 2013's 3.6 million new-vehicle purchases. Afterward, the researchers matched their findings to more than 750,0000 transactions in 2018 involving five-year-old used autos. Used car prices were recalculated using 2013 data and a 7% increase from 2018. (inflation). It was possible to calculate the five-year average depreciation rate of several car models based on this data.
There is an average five-year depreciation rate of 50.2 percent in the United States for autos, according to this study. However, there are some models that deteriorate substantially more quickly than other models.
You can see the cars that do not depreciate and the lowest depreciation in the table below. These two undisputed kings of value, Jeep's Wrangler Unlimited and Wrangler, top the list. Durability and performance are the hallmarks of both types. They are also popular in the United States. With the exception of the two Jeeps listed, this list primarily includes pickup trucks from the ever-expanding market segment (Toyota Tacoma, Toyota 4Runner, Toyota Tundra, Nissan Frontier, GMC Sierra 1500, and Chevrolet Silverado 1500).


The 10 Lowest Depreciating Vehicles in the U.S


Rank Model Average 5-Year Depreciation Rate
1 Jeep Wrangler Unlimited 27.3%
2 Jeep Wrangler 27.3%
3 Toyota Tacoma 29.5%
4 Toyota Tundra 37.1%
5 Nissan Frontier 37.8%
6 Toyota 4Runner 38.1%
7 Chevrolet Silverado 1500 39.7%
8 GMC Sierra 1500 39.9%
9 Subaru Impreza 42.3%
10 Ram Ram Pickup 1500 42.7%
Average for All Vehicles 50.2%

Which Cars Lose The Most Value Over Time?


Calculators4you has done the legwork for you so that you may locate the automobiles that depreciate the most. Among the most rapidly depreciating vehicles on the market are the Nissan Leaf, the Chevrolet Volt, and the Ford Fusion Energy. Luxury sedans are yet another class of fast-appreciating automobiles (Mercedes-Benz S Class, BMW 7 Series, BMW 6 Series, Jaguar XJL, and Mercedes-Benz E Class).
There are two main reasons why alternative-fuel vehicles depreciate so quickly. For starters, because the government discounts only apply to the cost of purchase, the resale value of these vehicles is lower. Second, the technology behind electric and hybrid vehicles is evolving at a rapid pace, rendering them relatively soon out of date.
This list of the ten most depreciating automobiles can be seen in the table below.


Most Depreciating Cars in the United States


Rank Model Average 5-Year Depreciation Rate
1 Nissan Leaf 71.7%
2 Chevrolet Volt 71.2%
3 BMW 7 Series 71.1%
4 Mercedes-Benz S-Class 69.9%
5 Ford Fusion Energi 69.4%
6 BMW 6 Series 68.3%
7 BMW 5 Series 67.3%
8 Mercedes-Benz E-Class 67.2%
9 Jaguar XJL 66.4%
10 Chevrolet Impala 66.2%
Average for All Vehicles 50.2%

How Much Does It Cost To Drive?


The average cost of a new car in 2018 was predicted to be over $36,000, making it clear that buying a car is a big investment. Because of this, a car is the second most important possession for many American families behind a home (after the house). This is why many people take out loans to buy a car or lease one.
When you buy a car, no matter how you finance it, you must keep in mind that there are additional expenditures connected with owning and operating a vehicle. The following are the most critical:



Keep in mind that depreciation of your vehicle is one type of specific, indirect expense of car ownership.


Is It Expensive To Buy A Car?


Let's look at some numbers to see what owning a car actually costs. According to the Bureau of Labor Statistics ' study, motor vehicle ownership and operation costs average $9,576 per year (Consumer Expenditures in 2017). Assuming a monthly petrol and oil expenditure of $ 1,968, this value is made up of $4,054 for the purchase of the car, $1,968 in annual depreciation costs, and $3,554 in other expenditures associated with owning and utilizing the vehicle.
Keeping a car costs, according to the American Automobile Association, $8,849 a year. Depreciation and maintenance fees are also included in the cost of the vehicle's ownership. However, parking costs are not included in this figure.


3 Tips to Reduce Car Depreciation


The depreciation and resale value of a home can be minimized in a variety of ways. These three strategies will help you keep your car's depreciation down


Car Maintenance:


It's possible that you'll get a greater price for your vehicle if it's in good condition. Don't forget to keep track of service records. An automobile that has been modified is more difficult to sell, therefore avoid doing so.


Invest in a Reliable Car:


Some automobiles are more valuable than others in the long run. Look into the worth of used cars before you buy one. You can prevent a vehicle with a high depreciation rate by doing this.


Zero-Depreciation Insurance:


In order to avoid having your claim amount reduced as a result of the depreciation of your vehicle, consider purchasing the zero-depreciation add-on protection for your auto insurance policy.


Conclusion


It's important to consider depreciation whether shopping for a new vehicle or trying to sell your old one. An automobile depreciation calculator can help you figure out how much your vehicle will be worth when it's time to trade it in. If you have an older car, keep in mind that depreciation is less rapid.


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