Everyone knows that as soon as you take a car off the lot, it’s worth much less. Each time you drive it, the value keeps going down. Then, your car depreciates for every year you own it. That’s the price you pay for car ownership.

A car depreciation calculator can offer insight into how much that value changes. Do you want to know the value before you sell it? Do you want to know how much your car is worth? A car depreciation calculator can offer a reasonable figure. 

This tool offers depreciation calculations and insight into the cars that devalue the most. Find out what the actual cost of car ownership is.

The car depreciation calculator is also one of many others in the realm of automobiles. A lease mileage calculator can establish how much your holiday vehicle will cost. A car crash calculator or velocity calculator may also please your curiosities. 

Then, what about the environmental impact of your car? You can even use a vehicle vs. bike calculator to establish your CO₂ emission output once you make the switch. There is a lot to learn with calculators in the automotive realm.

What is the Definition of Depreciation?

You can define depreciation as the process of something decreasing in value. Let’s say you paid $10,000 for a car from a car yard. You drove it around for two years, added miles to it, and wore out the interior. You couldn’t sell it for $10,000. You may only get $5,000 for it. 

That would mean your car’s value has depreciated. They would also say the depreciation is reflective of the reduction in its value over time. Depreciation is merely calculating an asset’s cost over its lifespan.

How Fast Will My Car’s Value Decrease?

If you drive a new car off the lot, it will surprise you to know that you instantly decreased its value by nine percent. In a few short miles, your car went from brand new to used. It now fits into a different market – one that doesn’t want to pay “new” pricing. 

Once you drive it around for a year, it’s 81 percent of its initial value. After two years, it’s worth 69 percent of what you paid. After five years, you have shaved 40 percent off the value from the day you purchased it. You know what’s coming next. In around ten-and-a-half years, your car will not be worth anything. You can still sell it, but for mere crumbs compared to your purchase price.

The rate of depreciation can differ depending on your vehicle’s make and model. You can never get an exact depreciation rate, but you can get an average.

How Do You Calculate Vehicle Depreciation?

There are two ways to use a car depreciation calculator.

    1.	Input your car’s new sale price. The calculator will display the value of it in different periods. 
    2.	Estimate the car’s value. For example, you want to buy a five-year-old car for $10,000. 

Put five years into the ‘car age’ and ‘car value after five years’ boxes. The initial value would come up as $25,000. Does that sound right? Was that car that value when it was brand new? If it was higher, you’re getting a bargain. If it was lower than that, you might be overpaying.

Which Vehicle Models Depreciate the Least?

The depreciation rate for various vehicle models can differ a lot. Some cars you buy may lose their value quicker than others. In five years, the difference between the two new vehicles can be as much as 40 percent. As you can see, not all vehicle depreciation rates are the same. 

The automotive outfit iSeeCars conducted studies involving 3.6 million new cars in 2013. They compared the price tags of 750,000 used cars in 2018. With this data, they discovered the average five-year depreciation rate for different models.

In the United States, cars will be worth a little over 50 percent of their ‘new’ price in five years. Some are better or worse than others. Standout vehicles that depreciate the least include those that are durable and reliable. Much of the leading pack includes pickup trucks. The top ten cars suffering the least amount of depreciation are below. 

Top 10 Cars that Depreciate the Least




Rank
Model
Average 5-Year Depreciation Rate


1
Jeep Wrangler Unlimited
27.3%


2
Jeep Wrangler
27.3%


3
Toyota Tacoma
29.5%


4
Toyota Tundra
37.1%


5
Nissan Frontier
37.8%


6
Toyota 4Runner
38.1%


7
Chevrolet Silverado 1500
39.7%


8
GMC Sierra 1500
39.9%


9
Subaru Impreza
42.3%


10
Ram Pickup 1500
42.7%


Average for All Vehicles
50.2%



Source: iSeeCars.com

Which Vehicles Depreciate the Most?

The list above may be surprising, but the vehicles that depreciate the most could be even more shocking. Many cars that lose value fast have alternate fuel sources. The Chevrolet Volt and Nissan Leaf are in that league. Luxury sedan values also drop like a brick. Often, changing technology and government incentives are to blame.

Top 10 Cars that Depreciate the Most




Rank
Model
Average 5-Year Depreciation Rate


1
Nissan Leaf
71.7%


2
Chevrolet Volt
71.2%


3
BMW 7 Series
71.1%


4
Mercedes-Benz S-Class
69.9%


5
Ford Fusion Energi
69.4%


6
BMW 6 Series
68.3%


7
BMW 5 Series
67.3%


8
Mercedes-Benz E-Class
67.2%


9
Jaguar XJL
66.4%


10
Chevrolet Impala
66.2%


Average for All Vehicles
50.2%



Source: iSeeCars.com

The True Cost of Owning a Vehicle

Depreciation is not the only cost you have to bear as a vehicle owner. Once you spend, on average, $36,000 for a new car, that’s not the end. You have to factor in registration, insurance, tax, fuel, maintenance, and parking. 

It’s no surprise that after the family home, an American’s most valuable asset is their vehicle. That’s often the reason why many people get out loans to buy vehicles. Before you buy a car, ensure you can afford the purchase price and the ongoing costs.

The Yearly Cost of Owning a Vehicle

Before you buy a new car, do the math. A car depreciation calculator can only help you with some of it. The Bureau of Labor Statistics says it costs an average of $9,576 to own a car in 2017. This figure factors in many things. It includes leasing, depreciation, $1,968 for oil and fuel, and over $3,500 for associated costs.