Depreciation is the difference between what you paid for your vehicle and what you can sell it for later. Most new cars lose roughly 15% to 20% of their value in the very first year. By the end of year five, a typical vehicle has lost approximately 60% of its initial value.
Key Factors Influencing Your Car's Value
The Brand & Model: Luxury vehicles and high-end SUVs often depreciate faster than reliable economy commuters like Toyotas or Hondas.
Mileage: High mileage is a direct indicator of wear and tear on the engine and suspension, significantly lowering resale price.
Service History: A documented history of oil changes and maintenance suggests the car has been well-maintained.
Market Demand: If fuel prices rise, fuel-efficient hybrids may depreciate slower than gas-guzzling trucks.
Realistic Example:
If you buy a car for $40,000 and keep it for 3 years in "Good" condition with average mileage, the estimated value would be approximately $23,328. This represents a total depreciation of $16,672 over 36 months.
How to Minimize Depreciation
While you cannot stop depreciation entirely, you can slow it down. Keeping mileage low, parking in a garage to protect the paint, and performing scheduled maintenance are the best ways to preserve value. Additionally, choosing popular exterior colors like white, black, or silver can make the car easier to sell later compared to niche colors like bright green or orange.
function calculateDepreciation() {
var price = parseFloat(document.getElementById("purchasePrice").value);
var age = parseFloat(document.getElementById("vehicleAge").value);
var mileageFactor = parseFloat(document.getElementById("annualMileage").value);
var conditionFactor = parseFloat(document.getElementById("carCondition").value);
var resultBox = document.getElementById("result-box");
var resultDiv = document.getElementById("resaleResult");
if (isNaN(price) || price <= 0) {
alert("Please enter a valid purchase price.");
return;
}
if (isNaN(age) || age 0) {
// First year hit
currentValue = currentValue * 0.80;
// Subsequent years
for (var i = 1; i < age; i++) {
currentValue = currentValue * 0.85;
}
}
// Adjust for mileage and condition
// High mileage factor (1.05) means more depreciation, so we divide or subtract
// Here we use multipliers: Condition 1.1 = +10% value, Mileage 0.95 = -5% additional depreciation
// Adjusting for Mileage (higher value = worse)
if (mileageFactor == 1.05) {
currentValue = currentValue * 0.90; // High mileage penalty
} else if (mileageFactor == 0.95) {
currentValue = currentValue * 1.05; // Low mileage bonus
}
// Adjusting for Condition
currentValue = currentValue * conditionFactor;
// Floor the value at 10% of purchase price (scrap value)
if (currentValue < (price * 0.1)) {
currentValue = price * 0.1;
}
var totalLost = price – currentValue;
var percentLost = (totalLost / price) * 100;
resultBox.style.display = "block";
resultDiv.innerHTML = "
Estimated Resale Value:
" +
"$" + currentValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Your vehicle has depreciated by approximately " + percentLost.toFixed(1) + "% from its original price." +
"Total Value Lost: $" + totalLost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "";
}