Car Value Depreciation Curve

That s just a fact of life and the infographic below gives.

Car value depreciation curve. This calculator is a useful decision making tool when considering purchasing a car. The average car. Hyundai santa fe suv. Where a is the value of the car after n years d is the depreciation amount p is the purchase amount r is the percentage rate of depreciation per annum n is the number of years after the purchase.

By the end of the first three years with the average of around 30 000 on the clock the typical car will have lost around 60 of the initial price. Of course the above is only an estimate as the actual depreciation varies depending on which vehicle you buy how many miles per year you drive the vehicle and how well you take care of the vehicle. Before showing how the hack works here s a crash course on depreciation. Educated decisions in the vehicle buying process.

Using the first three years depreciation curve we can estimate the future value of the car and create a full table showing each month of ownership and the subsequent depreciation and new value of the car. First because depreciation is the price you pay for using your vehicle you can soften the blow by using your vehicle less. The car depreciation calculator uses the following formulae. Try our other vehicle finance calculators too.

And here is a car depreciation curve showing how the value of the vehicle continues to decline over time. A word about depreciation. But this can vary a lot and can be as little as 10 if you choose wisely. The bad news and some good news about depreciation.

A p 1 r 100 n. There are a few basic guidelines that will help your car hold its value. 5 year drop in value. Car depreciation over the first 12 months from new will typically be between 30 40 of the initial value.

According to edmunds data the first year is the most devastating for the value of most new cars. The very minute that you drive a new car off a dealer s lot it loses value. After two years your car s value decreases to 69 of the initial value. Moreover we strive to highlight that it is residual value and cost of ownership where consumers should be most focused and not just the initial purchase price.

D p a. Any more and routine wear and tear begin to really take their toll on a vehicle. Our car depreciation calculator uses the following values. Then the car value continues to drop year after year.

After a year your car s value decreases to 81 of the initial value. True cost to own including taxes fuel insurance and other costs.