Excellent (Rarely used, perfect paint)
Good (Minor wear, well maintained)
Fair (Visible wear, mechanical needs)
Poor (Significant damage/high repairs)
Estimated Valuation
Estimated Current Value:
Total Depreciation:
Value Retained:
Understanding Car Depreciation: How Much Is Your Car Worth?
Car depreciation is the difference between the amount you paid for your vehicle and its current market value. For most vehicle owners, depreciation is the single largest cost of ownership, often exceeding the cost of fuel, insurance, or maintenance. This calculator helps you estimate how much value your car has lost based on industry-standard decay curves.
How Is Car Depreciation Calculated?
The calculation uses a Declining Balance Method. Generally, a new car loses about 15-20% of its value in the first year and roughly 10-15% each year thereafter. However, several factors can accelerate or slow this process.
Key Factors Influencing Your Car's Value:
Mileage: The average car travels 12,000 to 15,000 miles per year. Exceeding this significantly lowers the resale value because it implies more wear on the engine and drivetrain.
Condition: A "Good" condition car is the benchmark. "Excellent" cars command a premium, while "Fair" or "Poor" cars require deductions for pending repairs or cosmetic flaws.
Brand Reputation: Certain brands (like Toyota or Honda) typically depreciate slower than luxury brands (like BMW or Mercedes-Benz) due to perceived long-term reliability and maintenance costs.
Market Demand: The shift toward SUVs and Trucks has slowed their depreciation compared to traditional sedans.
Realistic Example:
Imagine you bought a SUV for $40,000. After 3 years of driving 12,000 miles per year and keeping it in Good condition:
Year 1: Value drops to ~$32,000 (20% loss)
Year 2: Value drops to ~$27,200 (15% loss)
Year 3: Value drops to ~$23,120 (15% loss)
Your total depreciation after 3 years would be approximately $16,880.
How to Minimize Depreciation
While you cannot stop depreciation, you can slow it down. First, maintain a consistent service history; a stamped service book or digital records prove the car was cared for. Second, keep the mileage low—consider using a different vehicle for long commutes if possible. Finally, choose popular colors and trims; "neutral" colors like silver, white, and black are often easier to sell than bright, niche colors.
function calculateCarDepreciation() {
var price = parseFloat(document.getElementById('purchasePrice').value);
var age = parseFloat(document.getElementById('carAge').value);
var mileage = parseFloat(document.getElementById('annualMileage').value);
var conditionMultiplier = parseFloat(document.getElementById('carCondition').value);
if (isNaN(price) || isNaN(age) || isNaN(mileage) || price 12000) {
var excessMileage = mileage – 12000;
annualRate += (excessMileage / 2000) * 0.005;
} else if (mileage < 8000) {
// Benefit for very low mileage
annualRate -= 0.02;
}
// Calculate value using declining balance formula: V = P * (1 – r)^t
// We adjust the first year specifically for the "off-the-lot" drop
var firstYearRate = 0.20 + (annualRate – 0.15);
var currentValue = 0;
if (age <= 1) {
currentValue = price * (1 – (firstYearRate * age));
} else {
var valueAfterYear1 = price * (1 – firstYearRate);
currentValue = valueAfterYear1 * Math.pow((1 – annualRate), (age – 1));
}
// Apply condition multiplier at the end
// Excellent (0.85 of base loss = less loss), Good (0.80), Fair (0.70), Poor (0.50)
// Actually, let's treat the multiplier as a final adjustment to the market value
// If Excellent, add 5% to calculated value. If Poor, subtract 20%.
if (conditionMultiplier == 0.85) currentValue *= 1.05;
if (conditionMultiplier == 0.70) currentValue *= 0.85;
if (conditionMultiplier == 0.50) currentValue *= 0.65;
// Floor the value at 10% of purchase price (scrap/minimum value)
if (currentValue < (price * 0.1)) {
currentValue = price * 0.1;
}
var totalDepreciation = price – currentValue;
var percentageRetained = (currentValue / price) * 100;
// Display Results
document.getElementById('currentVal').innerText = "$" + currentValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalDeprec').innerText = "$" + totalDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('percentRetained').innerText = percentageRetained.toFixed(1) + "%";
document.getElementById('resultsArea').style.display = 'block';
}