Car Depreciation & Resale Value Calculator
Estimated Valuation
Understanding Car Depreciation: How Much Is Your Vehicle Worth?
Every new vehicle begins losing value the moment it leaves the dealership lot. This phenomenon, known as car depreciation, is the single largest expense for vehicle owners—often exceeding the costs of fuel, insurance, and maintenance combined. Our Car Depreciation Calculator helps you estimate the current market value of your vehicle based on its age, purchase price, and condition.
How Car Depreciation is Calculated
Automobiles typically depreciate using a "declining balance" method. While a brand-new car might lose 20% of its value in the first year, subsequent years usually see a more stable decline of 10% to 15%. The formula used in our tool is:
Current Value = Purchase Price × (1 – Depreciation Rate) ^ Years
Key Factors Affecting Resale Value
- Mileage: The more miles on the odometer, the lower the value. High-mileage vehicles face higher maintenance risks, driving the price down.
- Vehicle Condition: Cars with a clean service history, no accidents, and a pristine interior/exterior retain value significantly better than those with damage.
- Brand Reputation: Certain brands (like Toyota and Honda) historically depreciate slower than luxury European brands or high-end electric vehicles.
- Market Demand: Trends shift. For example, SUVs and trucks often hold their value better than sedans in the current North American market.
Example Calculation
Imagine you purchased a new SUV for $40,000. If the vehicle is 3 years old and maintained in average condition (15% annual depreciation):
- Year 1: $40,000 – 15% = $34,000
- Year 2: $34,000 – 15% = $28,900
- Year 3: $28,900 – 15% = $24,565
After three years, your vehicle has lost approximately $15,435 in value, retaining roughly 61% of its original purchase price.