Depreciation is the difference between what you paid for your vehicle and what you can sell it for today. On average, a new car loses about 15% to 20% of its value each year. However, this rate isn't fixed; it depends heavily on the make, model, mileage, and how well you maintain the vehicle.
Key Factors Influencing Vehicle Value
Mileage: High mileage is a major driver of depreciation. Most buyers consider 12,000 to 15,000 miles per year "average." Anything higher significantly drops the resale value.
Condition: Mechanical health and cosmetic appearance (paint, interior) play a huge role. Regular servicing can help slow the value drop.
Number of Owners: Generally, a one-owner vehicle commands a higher price than a car that has changed hands four times.
Brand Reputation: Certain brands (like Toyota or Honda) are known for holding their value better than luxury brands that may have higher maintenance costs.
Calculation Example:
If you buy a car for $30,000 and it depreciates at an average rate of 15% per year, after 3 years, the calculation looks like this:
Year 1: $30,000 – 15% = $25,500
Year 2: $25,500 – 15% = $21,675
Year 3: $21,675 – 15% = $18,423
Tips to Minimize Depreciation
To ensure your car maintains as much value as possible, follow these simple rules:
Keep detailed service records to prove the car was maintained.
Limit unnecessary driving to keep mileage low.
Wash and wax your car regularly to prevent rust and paint fading.
Choose popular colors (White, Silver, Black) which are easier to resell than custom or bright colors.
function calculateDepreciation() {
var price = parseFloat(document.getElementById('purchasePrice').value);
var age = parseFloat(document.getElementById('carAge').value);
var mileage = parseFloat(document.getElementById('annualMileage').value);
var conditionRate = parseFloat(document.getElementById('carCondition').value);
var resultDiv = document.getElementById('depreciation-result');
var valueDisplay = document.getElementById('currentValueDisplay');
var lossDisplay = document.getElementById('totalLossDisplay');
// Validation
if (isNaN(price) || price <= 0) {
alert("Please enter a valid purchase price.");
return;
}
if (isNaN(age) || age 12000) {
mileageAdjustment = ((mileage – 12000) / 1000) * 0.005;
}
var annualRate = conditionRate + mileageAdjustment;
// Cap the rate so it doesn't become illogical
if (annualRate > 0.45) annualRate = 0.45;
// Compound Depreciation Formula: Current Value = P * (1 – r)^n
var currentValue = price * Math.pow((1 – annualRate), age);
// Format as currency
var formattedValue = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
}).format(currentValue);
var totalLoss = price – currentValue;
var formattedLoss = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
}).format(totalLoss);
var percentLoss = ((totalLoss / price) * 100).toFixed(1);
// Display results
resultDiv.style.display = 'block';
valueDisplay.innerHTML = formattedValue;
lossDisplay.innerHTML = "Your vehicle has lost " + formattedLoss + " (" + percentLoss + "%) in value since purchase.";
// Smooth scroll to result
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}