Car Depreciation Calculator — Formule
## How Car Depreciation Works
Vehicles lose value each year following a declining balance pattern. The largest loss occurs in the first year.
### Formula
**Value = Purchase Price x (1 - Depreciation Rate)^Years**
The average car depreciates 15-20% per year, with new cars losing about 20% in the first year alone.
Vehicles lose value each year following a declining balance pattern. The largest loss occurs in the first year.
### Formula
**Value = Purchase Price x (1 - Depreciation Rate)^Years**
The average car depreciates 15-20% per year, with new cars losing about 20% in the first year alone.
Exemple Résolu
$35,000 car depreciating at 15% per year for 5 years.
- Year 1 value = $35,000 x 0.85 = $29,750
- Year 2 value = $29,750 x 0.85 = $25,288
- Year 5 value = $35,000 x 0.85^5 = $15,536
- Total depreciation = $35,000 - $15,536 = $19,464
- Average annual loss = $19,464 / 5 = $3,893/year