Depreciation Cost
Free Depreciation Cost calculator with clear step-by-step results.
About Depreciation Cost
Depreciation is usually the single largest cost of owning a vehicle and the one that never appears on a receipt. It is simply what you paid minus what you get back, spread over the time you own the asset. Expressing it monthly makes it comparable with a lease payment, and per kilometre makes it comparable with fuel — on a typical car it is often two to three times the fuel cost per kilometre.
Formulas
Total loss in value
Total depreciation = purchase price − expected resale value
Rates
Per year = total ÷ years; per km = per year ÷ annual distance
Worked example
With the default values below, Depreciation Cost returns Depreciation per Year of $4,000.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Purchase priceminimum 0 $
- 32,000 $
- Expected resale valueminimum 0 $
- 12,000 $
- Years of ownershipminimum 1
- 5
- Distance driven per yearminimum 1 km
- 15,000 km
Results
- Depreciation per Year
- $4,000.00
- Value Lost Over the Period
- $20,000.00
- Depreciation per Month
- $333.33
- Depreciation per km
- $0.267
Step by step
- 1Values used
- 2Total loss in value
- 3Rates
- 4Depreciation per Year= $4,000.00
- 5Value Lost Over the Period= $20,000.00
- 6Depreciation per Month= $333.33
- 7Depreciation per km= $0.267
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or fees or charges into account.
- Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- Resale values depend on model, condition, mileage and market timing. Tax depreciation follows statutory rules that differ from this economic estimate — consult a tax professional for any tax or accounting purpose.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Resale values depend on model, condition, mileage and market timing. Tax depreciation follows statutory rules that differ from this economic estimate — consult a tax professional for any tax or accounting purpose.
Frequently Asked Questions
Why use straight-line rather than a declining percentage?
Straight line spreads the loss evenly and is the right basis for budgeting a known holding period. Real cars lose value fastest in the first two to three years, so if you plan to sell early, use a shorter period and a lower resale figure rather than a different curve.
How do I estimate the resale value?
Look up current asking prices for the same model at the age and mileage you expect to sell at. That observed figure is far more reliable than a percentage rule of thumb.
Is this the same as tax depreciation?
No. Tax depreciation follows prescribed rates, classes and caps set by your tax authority, and often differs substantially from economic loss in value.