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Residual Value Calculator

Work out residual value instantly with clear inputs, formula shown and shareable results.

About Residual Value Calculator

Residual value is normally modelled as geometric decay: a constant percentage of remaining value is lost each year, which matches observed second-hand markets far better than straight-line. A condition adjustment then reflects mileage, hours run, service history and specification.

Formulas

Geometric residual

Residual = Cost x (1 - Annual loss rate)^Age

Adjusted residual

Adjusted = Residual x (1 + Condition adjustment %)

Worked example

With the default values below, Residual Value Calculator returns Estimated residual value of $21,362.75. Change any input above and every figure here is recalculated in your browser.

Inputs used

Original cost
45,000
Annual value loss rate
18
Age at valuation
4 years
Condition adjustmentaccepts -40–40
5

Results

Estimated residual value
$21,362.75
Value before condition adjustment
$20,345.48
Share of original cost retained
47.47%
Total value lost
$23,637.25

Step by step

  1. 1Values used
  2. 2Geometric residual
  3. 3Adjusted residual
  4. 4Estimated residual value= 21,362.75
  5. 5Value before condition adjustment= 20,345.48
  6. 6Share of original cost retained= 47.47
  7. 7Total value lost= 23,637.25

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 or tax into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

What loss rate should I use?

Cars typically lose 15-20% a year, IT hardware 30-40%, industrial plant 8-12%. Use observed auction or trade data for your asset class.

Is residual value the same as salvage value?

Loosely, yes, though salvage often means scrap or parts value at the very end of life, while residual value assumes a working asset with remaining life.

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