Car Depreciation Calculator

How to calculate Car depreciation calculator?

Apply the annual depreciation rate each year to the remaining value; this models percentage loss compounding year over year.

Key formula: value_after_n_years = purchase_price × (1 - annual_rate_decimal)^years

Using the Car depreciation calculator calculator: an example

Example values — Purchase price: $30,000; Annual depreciation: 15%; Period: 3 years.

Step-by-step calculation:

1. Convert the rate: 15% → 0.15.
2. Compute the yearly factor: (1 − 0.15)^3 = 0.85^3 ≈ 0.614.
3. Calculate depreciated value: $30,000 × 0.614 ≈ $18,423.75.
4. Compute value lost: $30,000 − $18,423.75 ≈ $11,576.25.

Frequently Asked Questions

What depreciation method does this calculator use?

It uses a declining-balance (compound percentage) method where the annual rate reduces the remaining value each year.

Can I use a depreciation rate above 50% or below 0%?

Negative rates imply value growth and are uncommon; very high rates rapidly reduce value—use realistic rates, typically between 5% and 30% for cars.

Does this account for repairs, mileage, or market demand?

No. This tool models mathematical depreciation only. Adjust the rate to approximate additional factors or apply separate adjustments for condition and mileage.