Low (Under 10,000 miles)
Average (12,000 – 15,000 miles)
High (Over 20,000 miles)
Sedan / Hatchback (Standard)
Luxury Sedan (High Depreciation)
SUV / Crossover (Moderate)
Truck / Work Vehicle (Slowest)
Electric Vehicle (Variable)
Estimated Value After Ownership:
Total Value Lost:
Understanding Vehicle Depreciation
Vehicle depreciation is the difference between the amount you spend when you buy a car and the amount you get back when you sell or trade it in. For most consumers, depreciation is the single largest expense of owning a vehicle, often exceeding fuel, insurance, and maintenance costs combined.
Typically, a new car loses approximately 20% of its value within the first year. Over the next four years, it continues to lose about 15% of its remaining value annually. By the end of five years, a vehicle is usually worth only 40% of its original sticker price.
Key Factors That Influence Your Car's Value
Mileage: The more you drive, the lower the resale value. Average mileage is considered 12,000 to 15,000 miles per year.
Brand Reputation: Brands like Toyota and Honda traditionally hold their value better than luxury brands like BMW or Mercedes-Benz due to perceived reliability and maintenance costs.
Condition: Mechanical health and aesthetic condition (scratches, interior wear) play a vital role during appraisal.
Market Trends: The shift toward SUVs and trucks has made sedans depreciate faster in recent years.
Practical Example:
If you purchase a new SUV for $40,000:
Year 1: Value drops to $32,000 (20% loss).
Year 3: Value drops to approximately $23,000.
Year 5: Value drops to approximately $16,000.
Choosing a vehicle with a 5% better residual value can save you $2,000 over five years!
How to Minimize Depreciation
While you cannot stop depreciation, you can mitigate its impact. Consider buying a "nearly new" vehicle (2-3 years old) to let the first owner take the biggest hit. Keep meticulous service records, as a documented history can increase resale value by 10-15%. Finally, choose popular exterior colors like white, black, or silver, which are easier to resell than "statement" colors.
function calculateVehicleDepreciation() {
var price = parseFloat(document.getElementById("purchasePrice").value);
var currentAge = parseFloat(document.getElementById("vehicleAge").value);
var ownership = parseFloat(document.getElementById("ownershipPeriod").value);
var mileageFactor = parseFloat(document.getElementById("annualMileage").value);
var classRate = parseFloat(document.getElementById("vehicleType").value);
if (isNaN(price) || price <= 0 || isNaN(ownership)) {
alert("Please enter valid numbers for price and ownership period.");
return;
}
// Logic:
// 1. Initial hit (20% if current age is 0)
// 2. Yearly compounding depreciation
// 3. Adjusted for mileage and vehicle class
var totalYears = currentAge + ownership;
var currentValue = price;
// If the car is brand new, apply the 20% first-year hit immediately
if (currentAge === 0) {
currentValue = price * 0.80;
// Then calculate remaining years of ownership minus the first year
for (var i = 0; i < (ownership – 1); i++) {
currentValue = currentValue * (1 – classRate);
}
} else {
// If used, we calculate the current market value first roughly
// Then calculate the depreciation over the ownership period
for (var j = 0; j 1) {
currentValue = currentValue * 0.90; // High mileage penalty
} else if (mileageFactor < 1) {
currentValue = currentValue * 1.05; // Low mileage bonus
}
var totalLoss = price – currentValue;
var pctRemaining = (currentValue / price) * 100;
document.getElementById("finalValue").innerText = "$" + currentValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalLost").innerText = "$" + totalLoss.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var breakdown = "After " + ownership + " years, your vehicle will retain approximately " + pctRemaining.toFixed(1) + "% of its current input value.";
document.getElementById("breakdownText").innerText = breakdown;
document.getElementById("depreciation-result").style.display = "block";
}