Estimate the current resale value of your vehicle based on industry depreciation curves.
Standard Sedan (Average Depreciation)
SUV / Pickup Truck (Holds Value Better)
Luxury Vehicle (Faster Depreciation)
Electric Vehicle (Variable Depreciation)
How Car Depreciation Works
Depreciation is the difference between the amount you paid for your car and what you can sell it for later. It is typically the single largest cost of owning a new vehicle, often exceeding fuel, insurance, or maintenance costs.
A new car typically loses about 20% of its value in the first year and roughly 10% to 15% each year thereafter. However, the specific rate depends heavily on the brand reputation, reliability, and market demand for the specific category.
Realistic Example:
If you buy a new SUV for $45,000, it might lose $9,000 (20%) the moment you drive it off the lot. By year three, assuming a 12% annual depreciation rate for SUVs, your vehicle would be worth approximately $27,800. That is a total loss of $17,200 over 36 months.
Factors Influencing Your Car's Resale Value
Mileage: Higher than average mileage (typically 12,000–15,000 miles/year) accelerates value loss.
Condition: Mechanical health and exterior/interior cleanliness play a major role in trade-in appraisals.
Fuel Efficiency: When gas prices rise, fuel-efficient cars and hybrids tend to depreciate slower.
Brand Reliability: Brands like Toyota and Honda historically have lower depreciation rates compared to European luxury brands.
How to Minimize Depreciation
To reduce the financial impact of depreciation, consider purchasing a "certified pre-owned" vehicle that is 2-3 years old. This allows the first owner to absorb the steepest part of the depreciation curve. Additionally, keeping meticulous service records can help you command a higher price when it's time to sell.
function calculateCarDepreciation() {
var price = parseFloat(document.getElementById('purchasePrice').value);
var age = parseFloat(document.getElementById('vehicleAge').value);
var type = document.getElementById('vehicleType').value;
var resultDiv = document.getElementById('depreciationResult');
if (isNaN(price) || price <= 0) {
alert("Please enter a valid purchase price.");
return;
}
if (isNaN(age) || age < 0) {
alert("Please enter a valid vehicle age.");
return;
}
// Set annual depreciation rates based on vehicle category
// These rates represent the decline after the initial year 1 hit.
var annualRate;
if (type === 'suv') {
annualRate = 0.12; // SUVs and Trucks often hold value better
} else if (type === 'luxury') {
annualRate = 0.18; // Luxury cars drop value quickly
} else if (type === 'electric') {
annualRate = 0.16; // EVs have historically higher depreciation due to tech cycles
} else {
annualRate = 0.14; // Default sedan rate
}
var currentVal;
if (age === 0) {
currentVal = price;
} else {
// Year 1 usually sees a 20% drop immediately
var valueAfterYearOne = price * 0.80;
if (age <= 1) {
// Linear interpolation for months within the first year
currentVal = price – ((price – valueAfterYearOne) * age);
} else {
// Compound depreciation for subsequent years
currentVal = valueAfterYearOne * Math.pow((1 – annualRate), (age – 1));
}
}
// Ensure value doesn't drop below 5% of original (scrap value)
if (currentVal < (price * 0.05)) {
currentVal = price * 0.05;
}
var totalLost = price – currentVal;
var percentLost = (totalLost / price) * 100;
resultDiv.style.display = 'block';
resultDiv.innerHTML = '
' +
'Total Value Lost: $' + totalLost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " +
'Depreciation Percentage: ' + percentLost.toFixed(1) + '%' +
'Note: This is an estimate. Local market conditions, mileage, and vehicle condition will affect actual trade-in or private party value.';
}