1. What is Car Depreciation?

Car depreciation refers to the decrease in a vehicle's value over time due to age, wear and tear, and market factors. In India, cars typically depreciate at about 15% per year.

2. How Does Depreciation Work in India?

The standard depreciation formula for cars in India:

Where:

• Original Price — Purchase price of the car (INR)
• 0.15 — Standard 15% annual depreciation rate
• years — Number of years since purchase

Explanation: The value decreases by 15% each year, compounding on the previous year's value.

3. Importance of Depreciation Calculation

Details: Knowing your car's depreciated value helps with insurance claims, resale negotiations, tax calculations, and financial planning.

4. Using the Calculator

Tips: Enter the original purchase price in INR and the number of years you've owned the vehicle. The calculator will show the current estimated value.

5. Frequently Asked Questions (FAQ)

Q1: Is 15% depreciation standard for all cars?
A: While 15% is typical, luxury cars and certain models may depreciate faster (20-25%), while some popular models depreciate slower (10-12%).

Q2: How does mileage affect depreciation?
A: High mileage can increase depreciation beyond the standard rate. Typically, 10,000-15,000 km per year is considered normal.

Q3: When is depreciation highest?
A: The first year usually sees the highest depreciation (often 20-25%), then it stabilizes around 15% in subsequent years.

Q4: Can maintenance reduce depreciation?
A: Proper maintenance and service records can help maintain higher resale value, but doesn't eliminate standard depreciation.

Q5: How is depreciation used for insurance?
A: Insurers use depreciation to calculate IDV (Insured Declared Value) which determines your maximum claim amount.