Verified This car depreciation calculator is a handy tool that will help you estimate the value of your car once it's been used. You probably know that the value of a vehicle drops dramatically just after you buy it, and it depreciates with each year. You can use this calculator to either find out how much your car is worth or check whether the price for a used car you were offered is fair. It also helps you estimate the most significant component of the true cost of owning a car – the true yearly cost of car acquisition. If you want to learn:
...keep reading this article! Meanwhile, are you interested in motorization? Check out also our lease mileage calculator and car loan EMI calculator! If you're looking to finance the purchase of a new recreational vehicle (RV), our RV loan calculator makes it simple to work out what the best deal will be for you. In our portal, we also have a lot of technical calculators related to motorization. You may be particularly interested in the car crash calculator and velocity calculator. If you are rather environment-friendly, then maybe you have wondered what would be the effect of you swapping the car for a bike for, let's say, five years? Or how much additional lifespan would you get when giving up a car? How much CO₂ emission would you prevent? Try our car vs. bike calculator to answer all of these questions.
In the simplest terms, depreciation is the decrease in value. Imagine that you bought a car for $20,000. After a few years, the vehicle is not what it used to be in the beginning. You will probably agree that selling it for $20,000 again would not be especially fair – you have some sort of a gut feeling that it is worth much less now. Economists would say that your car has depreciated over the last few years. They would also add that the basic concept of depreciation reflects the reduction in value of a vehicle over time.
You might be surprised, but the value of your car decreases to 91% of the initial market value the minute you purchase it. Why? Well, it's all in the perception of the next prospective buyer. At the moment you buy it, the car's state moves from "new car" to "used car", and even though it's been used for just one minute, its value drops significantly. Then, the car value continues to drop year after year. Our car depreciation calculator uses the following values ( ):
Our car depreciation calculator assumes that after approximately 10.5 years, your car will have zero value. Of course, you will still be able to sell it to individual buyers, but its market value will be extremely low. In reality, each brand and model of a car loses its value at a slightly different rate; formally, we say, it has its car depreciation rate. Still, you can use this calculator to show you what the value will be more or less after a specific time has elapsed.
You can use this calculator in two ways:
The depreciation rates of various models of cars differ significantly. Some vehicles lose their value much faster than others. Did you know that the difference in the five-year depreciation rate between two cars can be as high as 40 percent? The experts from an automotive research firm, iSeeCars, performed an to determine the depreciation rate of different vehicles. At first, they analyzed 3.6 million purchases of new cars in 2013. Then, they compared the results with more than 750 thousand transactions in which five-year-old used vehicles were sold in 2018. To make the calculations more accurate, iSeeCars adjusted used car prices from 2018 by 7 percent to 2013 dollars (inflation). Based on that data, they could compute the average five-year car depreciation rate of different models.According to this particular study, the average five-year depreciation rate of vehicles in the U.S. is around 50.2 percent of their initial value. However, some models depreciate significantly faster than others. In the table below, you can see which cars depreciate the least. At the top of the list are two unquestioned kings of value manufactured by Jeep: Wrangler Unlimited and Wrangler. Both models are known for their durability and performance. They also have enduring popularity among Americans. In addition to the two Jeeps on the list, you can find mainly pickup trucks (Toyota Tacoma, Toyota Tundra, Nissan Frontier, Toyota 4Runner, Chevrolet Silverado 1500, and GMC Sierra 1500) which belong to the continually growing market segment.
The research prepared by iSeeCars enables you also to find cars that depreciate the most. On the top of the list of the vehicles that lose their value the fastest, you will find mainly alternative-fuel cars: Nissan Leaf, Chevrolet Volt, and Ford Fusion Energy. Another group of the fastest depreciating cars is luxury sedans (BMW 7 Series, BMW 6 Series, Mercedes-Benz S Class, and Mercedes-Benz E Class, Jaguar XJL). The reasons why alternative-fuel vehicles lose their value relatively quickly are twofold. Firstly, the government incentives apply only to their purchasing price, and thus their resale value is lower. Secondly, electric and hybrid vehicles' technology changes rapidly, making technologies outdated relatively quickly. The table below contains the list of ten cars that depreciate the most.
Everybody knows buying a car is a significant expense – in 2018, the industry-wide estimated average cost of a brand-new car was around $36,000. Thus it is not a surprise that for many American families, a motor vehicle is the second most valuable asset (after the house). This is also a reason why many people take loans to buy a car or decide to lease them. No matter how you finance the purchase of a car, it is crucial to realize that apart from the cost of acquisition, using a car is also associated with additional costs. The most important among them are:
Remember that a kind of a specific, indirect cost of owning a car is also the depreciation of your vehicle.
To find the actual cost of owning a car, let's look for some numbers. According to the report ( ) released by the U.S. Department of Labor (Bureau of Labor Statistics), the average cost of owning and operating a motor vehicle is $9,576 per year. This value is composed of $4,054 for the acquisition of the car (averaged yearly costs of depreciation, leasing payments, etc.), $1,968 spent yearly on gasoline and motor oil, and $3,554 in other expenses related to owning and using the vehicle.Another statistic from the says that the average yearly cost of owning a car is $8,849. It includes gasoline, maintenance, insurance, license and registration, loan finance charges, and depreciation costs. This number, however, does not cover the cost of parking.
The amount a car will depreciate by after an accident depends on the amount of damage done. There is a lot of difference between losing a wing mirror and being in a car totaling accident. You can expect only some depreciation for the former, while the latter will be substantial, even if fully repaired.
No, hybrid cars depreciate slower than petrol cars. Although this wasn't the case when hybrid cars first hit the market, a study conducted in 2017 found that the reverse was now true. So, if you want your vehicle to retain its value for longer, consider buying a hybrid.
There is no rule of thumb for car depreciation per mile, it varies massively from car to car. Your best bet is to go online and see how the cost of your car changes with the number of miles done – keeping as many other variables the same. |