When discussing "new car rates" outside the context of financing, the most critical mathematical factor affecting your automotive wealth is the Depreciation Rate. This metric defines the speed at which a vehicle loses its market value over time. Unlike a loan interest rate which adds to your cost, the depreciation rate subtracts from your asset's value.
How the Calculation Works
This calculator uses an exponential decay model to estimate the residual value of a vehicle. The formula for the new car rate of value loss is:
V = P × (1 – r)t
V: Future Value
P: Purchase Price (Initial Cost)
r: Annual Depreciation Rate (decimal)
t: Time in Years
Typical Rate Benchmarks
While every vehicle is different, historical data suggests the following benchmarks for new car depreciation rates:
Year 1: A significant drop, often 20-30% immediately after driving off the lot.
Years 2-5: The rate typically stabilizes between 15% and 18% annually.
Luxury Vehicles: Often experience higher rates (steep depreciation) due to high maintenance costs.
Economy/Trucks: Often maintain lower depreciation rates (better value retention).
Use the calculator above to simulate different ownership periods and depreciation severities to understand the true cost of holding a new car, separate from insurance or fuel costs.
function calculateCarRate() {
// 1. Get DOM elements
var inputCost = document.getElementById("initialCost");
var inputRate = document.getElementById("depreciationRate");
var inputYears = document.getElementById("yearsOwnership");
var resultBox = document.getElementById("ncrResult");
var displayFV = document.getElementById("resFutureValue");
var displayLoss = document.getElementById("resTotalLoss");
var displayMonthly = document.getElementById("resMonthlyCost");
// 2. Parse values
var cost = parseFloat(inputCost.value);
var ratePercent = parseFloat(inputRate.value);
var years = parseFloat(inputYears.value);
// 3. Validation
if (isNaN(cost) || isNaN(ratePercent) || isNaN(years) || cost < 0 || ratePercent < 0 || years 0) {
monthlyCost = totalLoss / totalMonths;
}
// 5. Output Formatting
displayFV.innerHTML = "$" + futureValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
displayLoss.innerHTML = "-$" + totalLoss.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
displayMonthly.innerHTML = "$" + monthlyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " / mo";
// 6. Show Results
resultBox.style.display = "block";
}