Understanding Car Depreciation: How Much Is Your Car Worth?
Car depreciation is the difference between what you paid for your vehicle and its current market value. It is often the single largest expense of car ownership, yet it is frequently overlooked because it isn't a monthly bill you pay out of pocket.
How Does This Calculator Work?
Our Car Depreciation Calculator uses industry-standard algorithms to estimate how much your vehicle has lost value over time. It considers several critical factors:
Age: Most new cars lose 20% of their value in the first year and roughly 15% each year thereafter.
Mileage: The average driver covers 12,000 to 15,000 miles per year. Exceeding this "normal" range accelerates depreciation significantly.
Condition: A well-maintained car with a clean service history retains value better than one with mechanical issues or cosmetic damage.
Realistic Example:
Imagine you bought a brand new SUV for $40,000. After 3 years of driving 15,000 miles per year (higher than average) and keeping it in Good condition, the math looks like this:
Year 1 Drop (20%): $32,000
Year 2 Drop (15%): $27,200
Year 3 Drop (15%): $23,120
Mileage Penalty adjustment: Approx. -$800
Final Estimated Value: ~$22,320
5 Tips to Minimize Vehicle Depreciation
Limit Your Mileage: Every mile on the odometer reduces resale value. If possible, use public transport or carpool for long commutes.
Keep Detailed Service Records: Buyers pay a premium for cars with a documented history of regular oil changes and maintenance.
Choose Popular Colors: While you might love neon green, neutral colors like white, black, and silver have much higher resale demand.
Protect the Interior: Use floor mats and avoid smoking or eating inside the vehicle. Stains and odors are major value killers.
Park in a Garage: Protecting your car from UV rays and harsh weather prevents paint fading and rubber seal cracking.
Why Should You Track Depreciation?
Knowing your car's value is essential for several reasons. First, it helps you determine the right time to sell or trade in before a major value "cliff" (like the end of a powertrain warranty). Second, it ensures you aren't overpaying for car insurance; if your car is worth $5,000 but you're paying for a premium intended for a $20,000 car, you might be wasting money.
function calculateDepreciation() {
var price = parseFloat(document.getElementById("purchasePrice").value);
var age = parseFloat(document.getElementById("carAge").value);
var mileage = parseFloat(document.getElementById("annualMileage").value);
var conditionMultiplier = parseFloat(document.getElementById("carCondition").value);
if (isNaN(price) || isNaN(age) || isNaN(mileage)) {
alert("Please enter valid numbers in all fields.");
return;
}
var currentValue = price;
// Apply standard age-based depreciation
// Year 1: ~20%
// Year 2+: ~15% per year
for (var i = 1; i expectedMileage) {
var excess = (totalMileage – expectedMileage) / 1000;
var mileagePenalty = 1 – (excess * 0.005);
if (mileagePenalty < 0.7) mileagePenalty = 0.7; // Cap penalty
currentValue = currentValue * mileagePenalty;
} else if (totalMileage 0) {
// Bonus for low mileage
var savings = (expectedMileage – totalMileage) / 1000;
var mileageBonus = 1 + (savings * 0.003);
if (mileageBonus > 1.15) mileageBonus = 1.15; // Cap bonus
currentValue = currentValue * mileageBonus;
}
// Condition Adjustment
// Multiplier applied to the total depreciation amount
var totalDepreciationBeforeCondition = price – currentValue;
var adjustedDepreciation = totalDepreciationBeforeCondition * conditionMultiplier;
currentValue = price – adjustedDepreciation;
// Ensure value doesn't go below 5% of purchase (scrap value)
if (currentValue < (price * 0.05)) {
currentValue = price * 0.05;
}
var totalLost = price – currentValue;
var percentage = (totalLost / price) * 100;
// Display Results
document.getElementById("currentValue").innerText = "$" + currentValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalDepreciation").innerText = "$" + totalLost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("percentLost").innerText = percentage.toFixed(1) + "%";
document.getElementById("result-box").style.display = "block";
}