Standard Sedan/SUV
Luxury Vehicle
Truck/Reliable Brand (Toyota/Honda)
High-End Sports Car
Estimated Value in Years:$0.00
Total Depreciation Loss:$0.00
Estimated Annual Cost:$0.00
How Car Depreciation Works
Car depreciation is the difference between what you paid for your vehicle and what you can sell it for later. It is typically the largest expense of car ownership, often exceeding fuel and insurance costs combined. On average, a new car loses about 20% of its value in the first year and roughly 15% each year thereafter.
Key Factors Influencing Your Car's Value
Brand Reputation: Brands known for reliability (like Toyota or Honda) tend to hold their value better than luxury brands with high maintenance costs.
Mileage: The more you drive, the faster the car depreciates. High mileage suggests more wear and tear on mechanical components.
Market Trends: A shift toward SUVs and Electric Vehicles can cause the resale value of sedans or gas-heavy trucks to drop faster.
Condition: Regular maintenance records and a clean interior/exterior significantly bolster resale value.
Example Calculation
If you purchase a new sedan for $35,000 and drive it 12,000 miles a year, it might look like this:
Year 1 (20% drop): Value = $28,000
Year 2 (15% drop): Value = $23,800
Year 3 (15% drop): Value = $20,230
By the end of year 3, you have "lost" nearly $15,000 in value, which is your depreciation cost.
Strategies to Minimize Depreciation
To reduce the impact of depreciation, consider buying a "nearly new" car (2-3 years old) to let the first owner take the biggest hit. Additionally, keeping your mileage within the national average (10,000 – 12,000 miles) and choosing popular, neutral colors can help maintain a higher resale price.
function calculateDepreciation() {
var price = parseFloat(document.getElementById("purchasePrice").value);
var age = parseFloat(document.getElementById("vehicleAge").value);
var mileage = parseFloat(document.getElementById("annualMileage").value);
var period = parseFloat(document.getElementById("ownershipPeriod").value);
var baseRate = parseFloat(document.getElementById("vehicleType").value);
if (isNaN(price) || isNaN(age) || isNaN(period) || price 12000) {
mileageSurcharge = ((mileage – 12000) / 5000) * 0.015;
} else if (mileage < 8000) {
mileageSurcharge = -0.01; // Bonus for low mileage
}
var annualRate = baseRate + mileageSurcharge;
var currentVal = price;
// Calculate value drop for the existing age first (if used car)
for (var i = 0; i < age; i++) {
var dropRate = (i === 0) ? 0.20 : annualRate;
currentVal = currentVal * (1 – dropRate);
}
var startingValue = currentVal;
var futureVal = currentVal;
// Calculate value drop for the ownership period
for (var j = 0; j < period; j++) {
var yearIndex = age + j;
var specificDropRate = (yearIndex === 0) ? 0.20 : annualRate;
futureVal = futureVal * (1 – specificDropRate);
}
var totalLoss = startingValue – futureVal;
var annualCost = totalLoss / period;
// Display results
document.getElementById("depreciation-result").style.display = "block";
document.getElementById("resYears").innerText = period;
document.getElementById("futureValue").innerText = "$" + futureVal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalLoss").innerText = "$" + totalLoss.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("annualCost").innerText = "$" + annualCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}