1. What is Car Depreciation?

Car depreciation refers to the decrease in a vehicle's value over time. It's the difference between what you paid for the car and what it's worth when you sell it, spread over the years you owned it.

2. How Does the Calculator Work?

The calculator uses the straight-line depreciation formula:

Where:

• Purchase Price — Original cost of the vehicle
• Resale Value — Expected selling price at end of ownership
• Years of Ownership — Time you plan to keep the vehicle

Explanation: This simple formula calculates the average annual loss in value of your vehicle.

3. Importance of Depreciation Calculation

Details: Understanding depreciation helps with financial planning, insurance decisions, and evaluating the true cost of vehicle ownership.

4. Using the Calculator

Tips: Enter the original purchase price, estimated resale value, and years you plan to own the vehicle. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the average car depreciation rate?
A: New cars typically lose 20-30% of their value in the first year and about 15-18% per year after that.

Q2: Do all cars depreciate at the same rate?
A: No, luxury cars typically depreciate faster while some collectible or in-demand models may hold value better.

Q3: How can I minimize car depreciation?
A: Choose models with good resale value, maintain the vehicle well, keep mileage reasonable, and avoid excessive modifications.

Q4: Is this the only depreciation method?
A: No, this is straight-line depreciation. Other methods like declining balance may show different patterns.

Q5: Should I consider depreciation when buying a car?
A: Yes, understanding depreciation helps make smarter purchasing decisions and financial planning.