Mortgage Pre Approval Calculator

Car Depreciation Calculator

Estimated Current Value

function calculateDepreciation() { var price = parseFloat(document.getElementById('purchasePrice').value); var age = parseFloat(document.getElementById('vehicleAge').value); var mileage = parseFloat(document.getElementById('annualMileage').value); var conditionMultiplier = parseFloat(document.getElementById('vehicleCondition').value); if (isNaN(price) || isNaN(age) || isNaN(mileage)) { alert("Please enter valid numbers for all fields."); return; } // Standard annual depreciation rate (approx 15% per year) var baseRate = 0.15; // Adjust rate based on mileage (average is 12000) // Extra 1% depreciation for every 3000 miles above average var mileageAdjustment = 0; if (mileage > 12000) { mileageAdjustment = ((mileage – 12000) / 3000) * 0.01; } else if (mileage < 12000) { // Slower depreciation for low mileage mileageAdjustment = ((mileage – 12000) / 3000) * 0.005; } var effectiveRate = baseRate + mileageAdjustment; // Calculate value using declining balance formula: Price * (1 – r)^n var calculatedValue = price * Math.pow((1 – effectiveRate), age); // Apply condition multiplier var finalValue = calculatedValue * conditionMultiplier; // Ensure value doesn't drop below 5% of original (scrap value) if (finalValue < (price * 0.05)) { finalValue = price * 0.05; } var totalDepreciation = price – finalValue; var percentLost = (totalDepreciation / price) * 100; document.getElementById('currentValue').innerText = "$" + finalValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalLoss').innerText = "Total Value Lost: -$" + totalDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('depreciationRate').innerText = "Your vehicle has lost " + percentLost.toFixed(1) + "% of its original value."; document.getElementById('results-area').style.display = 'block'; }

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Understanding Car Depreciation

Depreciation is the difference between the amount you spent when you bought your car and the amount you get back when you sell or trade it in. It is typically the largest "hidden" cost of owning a vehicle, often exceeding the cost of fuel, insurance, or maintenance.

How Car Depreciation is Calculated

Most vehicles lose value at a predictable rate. A new car typically loses 15% to 20% of its value in the first year alone. By the end of year five, many cars are worth only 40% of their original purchase price. Our calculator uses a declining balance method, which applies a percentage reduction to the remaining value each year, adjusted for specific factors like usage and maintenance.

Key Factors Affecting Your Car's Value

• Age: The most significant factor. Even a car kept in a garage with zero miles loses value simply because newer models with better technology are released.
• Mileage: The more you drive, the lower the value. High mileage suggests more wear and tear on the engine and suspension components.
• Condition: Mechanical health and aesthetic appearance (dents, scratches, interior stains) play a major role in resale value.
• Brand Reputation: Brands known for reliability (like Toyota or Honda) typically depreciate much slower than luxury European brands or niche performance cars.
• Fuel Economy: As gas prices rise, fuel-efficient vehicles tend to hold their value better than "gas guzzlers."

Realistic Example: The 3-Year Cost

Imagine you purchase a new sedan for $30,000. Here is how the math usually breaks down:

1. Year 1: Value drops 20% (-$6,000). Remaining Value: $24,000.
2. Year 2: Value drops another 15% of the remaining $24k (-$3,600). Remaining Value: $20,400.
3. Year 3: Value drops another 15% of the $20.4k (-$3,060). Remaining Value: $17,340.

In just three years, you have "spent" $12,660 just by owning the vehicle, regardless of what you spent on insurance or oil changes.

How to Minimize Depreciation

While you can't stop depreciation entirely, you can slow it down. First, consider buying slightly used cars (2-3 years old) to let the first owner take the biggest "hit" in value. Second, keep detailed service records; a documented history of oil changes and inspections increases buyer confidence. Finally, keep your mileage within the national average of 12,000 to 15,000 miles per year.