Depreciation is the difference between what you paid for your car and what you can sell it for later. Most new vehicles lose approximately 20% of their value in the first year alone. After that, they typically lose about 10% to 15% of their remaining value every subsequent year.
Our calculator uses a declining balance formula to estimate value. We apply a steeper drop for the first year (20% standard) and then a compounded annual rate based on your vehicle type and condition.
Realistic Example: If you buy a Toyota RAV4 for $35,000, after 3 years in "Good" condition, it might retain about $24,500 of its value. However, a luxury German sedan of the same price might drop to $19,000 in the same timeframe due to higher maintenance costs and faster technology turnover.
Key Factors Affecting Your Car's Resale Value
Mileage: The more you drive, the lower the value. Average mileage is roughly 12,000 to 15,000 miles per year.
Brand Reputation: Brands known for longevity (like Toyota and Lexus) depreciate much slower than brands known for high repair costs.
Condition: Regular detailing and maintenance records can add thousands to your trade-in or private sale price.
Fuel Economy & Tech: As gas prices rise, fuel-efficient cars hold value better. Conversely, as battery tech improves, older EVs may depreciate faster than expected.
How to Minimize Depreciation
While you can't stop depreciation entirely, you can slow it down. Choosing "evergreen" colors like silver, white, or black helps resale. Maintaining a full service history is vital. Finally, buying a "nearly new" car (2-3 years old) allows the first owner to take the largest 30-40% depreciation hit, saving you significant money in the long run.
function calculateDepreciation() {
var price = parseFloat(document.getElementById("purchasePrice").value);
var age = parseFloat(document.getElementById("carAge").value);
var annualRate = parseFloat(document.getElementById("vehicleType").value);
var conditionMultiplier = parseFloat(document.getElementById("carCondition").value);
var resultDiv = document.getElementById("resultDisplay");
if (isNaN(price) || isNaN(age) || price = 1) {
// First year hit is typically larger (fixed at ~20% for standard)
// Then we apply the compounded annual rate for remaining years
var firstYearValue = price * 0.80;
var remainingYears = age – 1;
currentVal = firstYearValue * Math.pow((1 – annualRate), remainingYears);
} else {
// Partial first year
currentVal = price * (1 – (0.20 * age));
}
// Apply condition multiplier
currentVal = currentVal * conditionMultiplier;
// Ensure value doesn't go below scrap value (roughly 5% of original or $500)
var floorValue = Math.max(price * 0.05, 500);
if (currentVal < floorValue) {
currentVal = floorValue;
}
var totalLoss = price – currentVal;
var percentLoss = (totalLoss / price) * 100;
document.getElementById("currentValue").innerText = "$" + currentVal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalLoss").innerText = "$" + totalLoss.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("percentLoss").innerText = percentLoss.toFixed(1) + "%";
resultDiv.style.display = "block";
}