This car depreciation calculator estimates the first year and overall depreciation of a car by 3 different scenarios (optimistic, realistic and pessimistic) for the period it is hold. There is in depth information on this topic below the form.


Car price when bought:*
$
Current car age:
Remaining car usage time:*

How does this car depreciation calculator work?

This is a financial tool designed to help you simulate the depreciation of your car by 3 different approaches. It takes account of the initial car price when bought (CPC), current car age (CCA) and the estimated time you plan to use it (TET) further.

The algorithm behind this car depreciation calculator applies the formulas given below:

  • Car age (current + time expected to use) in years (A) = CCA + TET

  • Optimistic scenario with low rate of depreciation:

- First year depreciation (B) = CPB * 10.75%

- Total car depreciation for the time it is used (C) = sum of the depreciation year per year for the given TET considering that the annual depreciation for year “n” is 10.75% from the value of the car from year “n-1”

  • Realistic scenario with low rate of depreciation:

- First year depreciation (D) = CPB * 14.5%

- Total car depreciation for the time it is used (E) = sum of the depreciation year per year for the given TET taking into account that the annual depreciation for year “n” is 14. 5% from the value of the car from year “n-1”

  • Pessimistic scenario with low rate of depreciation:

- First year depreciation (F) = CPB * 19.5%

- Total car depreciation for the time it is used (G) = sum of the depreciation year per year for the given TET considering that the annual depreciation for year “n” is 10.75% from the value of the car from year “n-1”

What statistics say about car depreciation?

Unfortunately statistics show that in average a car starts to depreciate right after is bought. Financial experts affirm that in average a car depreciates its value with 15 up to 20% per year during its expected life.

Thus, new cars tend to depreciate quicker than second hand cars as the value of the 2nd category is lower, which means depending on the market conditions and insurance costs sometimes buying an used vehicle may prove much more efficient from financial point of view.

Example of a calculation

Assuming that a car is bought  at a price of $20,000, then after the 1 year of usage the owner wants to see how the value of the car changed while planning to use it for another 10 years.

Car age (current + time expected to use): 11 years

Optimistic scenario with low rate of depreciation:

- First year depreciation: $2,150.00

- Total car depreciation for the time it is used: $14,275.73

- Car worth after depreciation: $5,724.27

Realistic scenario with low rate of depreciation:

- First year depreciation: $2,900.00

- Total car depreciation for the time it is used: $16,430.09

- Car worth after depreciation: $3,569.91

Pessimistic scenario with high rate of depreciation:

- First year depreciation: $3,900.00

- Total car depreciation for the time it is used: $18,160.14

- Car worth after depreciation: $1,839.86

05 Mar, 2015 | 0 comments

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