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Car Depreciation Calculator

Valuation Result

Estimated Market Value

Total Depreciation

Value Retained

function calculateDepreciation() { var price = parseFloat(document.getElementById('purchasePrice').value); var age = parseFloat(document.getElementById('carAge').value); var mileage = parseFloat(document.getElementById('annualMileage').value); var baseRate = parseFloat(document.getElementById('vehicleCondition').value); if (isNaN(price) || isNaN(age) || isNaN(mileage) || price <= 0 || age < 0) { alert('Please enter valid positive numbers for all fields.'); return; } // Mileage adjustment: standard is 12,000 miles/year // For every 1,000 miles over 12,000, add 0.5% to depreciation rate // For every 1,000 miles under, subtract 0.5% (min floor of baseRate – 5%) var mileageModifier = (mileage – 12000) / 1000 * 0.005; var adjustedRate = baseRate + mileageModifier; // Limit rate to realistic bounds if (adjustedRate 0.40) adjustedRate = 0.40; // Using declining balance formula: Value = P * (1 – r)^n // However, cars drop ~20% in year 1, so we handle age 1 specifically var currentValue; if (age === 0) { currentValue = price; } else if (age <= 1) { currentValue = price * (1 – (adjustedRate + 0.05)); // Faster drop in year 1 } else { var yearOneValue = price * (1 – (adjustedRate + 0.05)); currentValue = yearOneValue * Math.pow((1 – adjustedRate), (age – 1)); } // Results cannot be negative if (currentValue < 0) currentValue = 0; var totalDepreciated = price – currentValue; var retainedPct = (currentValue / price) * 100; document.getElementById('currentValue').innerHTML = '$' + currentValue.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('totalDepreciation').innerHTML = '$' + totalDepreciated.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('percentRetained').innerHTML = retainedPct.toFixed(1) + '%'; document.getElementById('results-area').style.display = 'block'; }

Understanding Car Depreciation

Car depreciation is the difference between the amount you spent on your vehicle and what it is worth today. Unlike real estate, vehicles are generally depreciating assets, meaning they lose value over time due to wear, tear, and the release of newer models.

Key Factors Influencing Your Car's Value

• Mileage: The more you drive, the lower the value. High mileage suggests more mechanical wear.
• Condition: A car with a clean service history, no scratches, and a pristine interior fetches a premium.
• Brand Reputation: Certain brands like Toyota and Honda tend to hold their value better than luxury brands like BMW or Mercedes-Benz, which may have higher maintenance costs.
• Ownership History: Single-owner cars usually sell for more than cars that have had 4 or 5 owners.

Example Calculation

If you purchase a new SUV for $40,000 and keep it for 3 years, driving an average of 12,000 miles per year in good condition:

• Year 1: Value drops by roughly 20% ($32,000).
• Year 2: Value drops by another 15% ($27,200).
• Year 3: Value drops by another 15% ($23,120).

In this scenario, your car has lost $16,880 in value over three years, which represents about 42% of its original cost.

How to Minimize Depreciation

While you cannot stop depreciation entirely, you can slow it down by:

1. Keeping mileage low: Use public transport or a secondary "beater" car for long commutes.
2. Regular Maintenance: Keep all service receipts to prove the car was well-maintained.
3. Choosing the right color: Neutral colors like white, black, and silver are easier to resell.
4. Buying Used: Buying a 2-3 year old car allows the first owner to take the massive "first-year" depreciation hit.