Using a car depreciation calculator to figure out the amount of depreciation you can expect from your vehicle is pretty simple. A quick Internet search will bring up a number of different depreciation calculators. Simply plug in a few numbers and it will tell you what your vehicle will be worth at a certain point in the future. It is important to understand what deprecation is and how it can affect your vehicle value. Below is a quick primer on depreciation and how a depreciation calculator works.
- Depreciation - A new car starts depreciating as soon as you drive it off the dealers lot. This is the most common type of deprecation. The rate of depreciation will vary depending on the vehicle make and model. A car that is highly sought after as a used vehicle will depreciate more slowly than one that has a limited resell market. Another type of depreciation occurs due to accidents or vehicle damage. A car that has been in an accident or has flood damage will be worth less then a car that has not suffered any damage.
- Other factors - There are additional economic factors that can affect car depreciation rates. As gas prices rise, vehicles with big engines and poor gas mileage will depreciate more, while a gas-sipping hybrid will hold its value and depreciate much less over the same time period.
- Depreciation Calculators - Doing a Google search for car depreciation calculator will bring up a long list of results. Here are a few sites that offer depreciation information as well as a calculator. Carprice.com and 1-auto-car loans. These calculators are easy to use. Simply enter the amount paid for the vehicle, the number of years old the car was when purchased (enter 0 if it was new), and in the final box enter the number of years old the car will be when you would like the value of it. As an example, if you paid $25,000 for the car, enter $25,000 in the first box. If the car was 3 years old when you bought it, enter a 3 in the second box. If you are curious what the car will be worth when it is 10 years old, put a 10 in the third box and hit calculate. The calculator will spit out a figure. This is roughly what your vehicle will be worth at that point in time.
- Rates Vary - Remember that these numbers are only supposed to give you a general idea of what you can expect your car to be worth. Often depreciation calculators use a different car depreciation formula, so you may get different figures depending on which one you use. There are numerous factors that go into calculating a resale value for a car. A well taken care of car will always command a better price then one driven into the ground. Certain makes and models tend to hold their value better, due to a reputation of quality and durability. While not completely accurate, these calculators can give you a realistic ballpark figure.
Cars depreciate. This is a fact of life. But using a depreciation calculator can give you a good idea of what your car will be worth a few years down the road.